With effect from January 1, 2024, no deduction of Income Tax under the P.A.Y.E. System should be made from the remuneration of employees whose gross income per month is One Hundred Thousand Dollars ($100,000.00) or less.
In arriving at the chargeable income of every individual taxpayer, a deduction based on the Table set out below should be made from the gross income for the relevant pay period.
Table: Threshold as per pay period
| PARTICULARS |
DAILY |
WEEKLY |
FORTNIGHTLY |
MONTHLY |
YEARLY |
|---|---|---|---|---|---|
| Personal Allowance (Free Pay) | $3,288 | $23,077 | $46,154 | $100,000 | $1,200,000 |
| National Insurance Scheme (up to $280,000) | 5.6% of Gross Salary | 5.6% of Gross Salary | 5.6% of Gross Salary | 5.6% of Gross Salary | 5.6% of Gross Salary |
| Medical and Life Insurance Premium Deduction (on the amount of premium paid by individuals for medical and life insurance premiums, limited to ten percent (10%) of Gross Salary; or $600,000 annually whichever is less) | |||||
| Rate of Tax of 28% on Chargeable Income of $2,400,000 | 28% | 28% | 28% | 28% | 28% |
| Rate of Tax of 40% on Balance of Chargeable Income in Excess of $2,400,000 | Balance @40% | Balance @40% | Balance @40% | Balance @40% | Balance @40% |
| Salary | Net: Profit | Income Base per period | $9,863 | $69,231 | $138,462 | $300,000 | $3,600,000 |
When the gross income exceeds the threshold of the pay period as provided in the above table, the remainder of the chargeable income is taxed at 28%
Employers should note that every employee is now entitled to a statutory allowance (income free of tax) of One million, two hundred thousand dollars ($1,200,000) per annum.
For additional calculations, click here.
