Income Tax Amendment (Self- Employed Persons)

Increase in Income Tax Threshold and Change in Income Tax Rate (Continued)

Self-Employed Individuals Earning Up to $180,000 monthly or $2,160,000 annually

Self-employed individuals, earning $180,000 and below per month or $2,160,000 annually will be taxed at the rate of 28% on their chargeable income after allowing for a deduction of $60,000 per month or $720,000 annually. The National Insurance Scheme contribution that self-employed individuals pay is not allowed as part of their deduction in ascertaining their chargeable income.

Pay PeriodDailyWeeklyFortnightlyMonthlyYearly
Statutory
Deduction
$ 1,973$13,846$ 27,692$ 60,000$ 720,000
Rate of TaxBalance @28%Balance @28%Balance @28%Balance @28%Balance @28%
Net Income/Profit lower than or
equal to
$5,918$ 41,538$83,077$180,000$2,160,000

Self-Employed Individuals Earning in excess of $180,000 monthly or $2,160,000 annually
Self-Employed individuals earning in excess of $180,000 per month or $2,160,000 annually will be taxed at the rate of 28% on the rst $120,000 monthly or $1,440,000  annually of their chargeable income and 40% on the excess thereafter, after allowing for a deduction of 1/3 of their gross income.

Pay PeriodDailyWeeklyFortnightlyMonthlyYearly
Statutory
Deduction
1/3 of Income1/3 of Income1/3 of Income1/3 of Income1/3 of Income
First $120,000 @28%$ 3,945$ 27,692$ 55,385$120,000$ 1,440,000
Remainder@40%Balance @
40%
Balance @
40%
Balance @
40%
Balance @
40%
Balance @
40%
Net Income/Profit lower
than or equal to
$5,919$41,539$83,078$180,001$2,160,012

SELF- EMPLOYED INDIVIDUALS Whose Yearly NET Income is up to $2,160,000

(A)
Yearly Net Income /Net
Profit
$
Statutory
Deduction
(B)
Total
Deduction
(C)
(A – B)
Chargeable
Income (CI)
$

(D)

C@28%

Total
Tax
Payable
$1,500,000$720,000$720,000$780,000$780,000*.28
= $218,400
$218,400
      
$2,160,000$720,000$720,000$1,440,000$1,440,000*.28
= $403,200
$403,200

SELF-EMPLOYED INDIVIDUALS Whose Yearly Earnings is in Excess of $2,160,000

(A)
Yearly Net Income /Net
Profit
$
Statutory
Deduction
1/3 of A
(B)
Total
Deduction
(C)
(A – B)
Chargeable
Income
(CI) $
( D)
FIRST
$120,000 @
28%
(E)
Remainder
@40%
(F)
(D + E)
Total Tax
Payable
$2,500,000$833,333$833,333$1,666,667$1,440,000 *.28
= $403,200
$226,667 *40%
= $90,667
$493,867
       
$5,000,000$1,666,667$1,666,667$3,333,333$1,440,000 *.28
= $403,200
$1,893,333*.40
=$757,333
$1,160,533