Computation - Income Tax

In keeping with the new budget measures announced for 2019, the following amendments and changes as they relate to the “rate of tax” and “statutory deductions” or “free pay” for Pay as You Earn (PAYE) employees and self-employed individuals becamen effective January 1, 2019 (Year of Assessment 2020).

  1. The amendment as it relates to Section 20 the Income Tax Act Chapter 81:01, now states that, “... in ascertaining the chargeable income of an individual for any year of assessment there shall be allowed a deduction of seven hundred and eighty thousand dollars or one third of the individual’s income (per annum) whichever is greater.”
  2. The amendment as it relates to Section 36 of the Income Tax Act Chapter 81:01, states that, “The tax upon the chargeable income of every person, other than a company, shall be at the rate of twenty-eight percent of the chargeable income for every person less than one million five hundred and sixty thousand dollars per annum.”
  3. The inclusion of Section 36A of the Income Tax Act, Chapter 81:01 states that, “The tax on the chargeable income of every person, other than a company, in excess of one million five hundred and sixty thousand dollars shall be taxed at the rate of forty percent.”
  4. Additionally, Section 16(1)(k) allows for the deduction of National Insurance contributions by Employees in ascertaining the chargeable income of the Employee.

 

Year of Income

(YI)

Year of Assessment

(YA)

Amount of Deduction

Threshold Rates on

Chargeable Income

2007

 

2008

$336,000

33 1/3 %

2008

2009

$420,000

33 1/3 %

2009

2010

$420,000

33 1/3 %

2010

2011

$420,000

33 1/3 %

2011

2012

$480,000

33 1/3 %

2012

2013

$600,000

33 1/3%

2013 - 2014

2014 - 2015

$600,000

30%

2015

2016

$600,000 +5.6% (Gross less than $200,000 w.e.f. October   2015)

30%

2016

2017

$660,000 + 5.6% (Gross less than $200,000 w.e.f October   2015)

30%

2017

2018 (Income $180,000 and under$720,000 + 5.6% Gross income28%
 2018 (Income $180,000 and Over)1/3 of Gross Income + 5.6% NIS of Gross Income (less than or equal to $220,000)First $1,440,000 @ 28% balance @ 40%

2018

2019 (Income $180,000 and under

$720,000+ 5.6% Gross income

28%

 

2019 (Income $180,001 and Over)

1/3 of Gross Income + 5.6% Gross Income (less than or equal to $240,000)

First $1,440,000 @ 28% balance @ 40%

2019

2020

(Income $195,000 and under)

$780,000 + 5.6% Gross income

28%

 

2020

(Income $195,001 and Over)

1/3 of Gross Income + 5.6% Gross Income equal to or less than $240,000)

First $1,560,000 @ 28% balance @ 40%

Note: NIS IS NOT A DEDUCTABLE FOR SELF EMPLOYED INDIVIDUALS.

 

PAYE INDIVIDUALS INCOME $195,000 AND UNDER

 WeeklyFortnightlyMonthlyYearlyRate of tax

$2,137 + 5.6% Gross Income

$15,000 + 5.6% Gross Income

$30,000 + 5.6% Gross Income

$65,000 + 5.6% Gross Income

$780,000 + 5.6% Gross income

Free

Balance @28%Balance @28%Balance @28%Balance @28%Balance @28%Balance @28%

$6,411

$45,000

$90,000

$195,000

$2,340,000

INCOME BASE

 

PAYE INDIVIDUALS INCOME $195,001 AND OVER

DailyWeeklyFortnightlyMonthlyYearlyRate of Tax

1/3 of Income + 5.6% Gross income( less than or equal to $240,000)

1/3 of Income + 5.6% Gross income( less than or equal to $240,000 )

1/3 of Income + 5.6% Gross income( less than or equal to $240,000)

1/3 of Income + 5.6% Gross income( less than or equal to $240,000 )

1/3 of Income + 5.6% Gross income( less than or equal to $240,000)

Free

$4,274

$30,000

$60,000

$130,000

$1,560,000

28%

Balance @40%

Balance @40%

Balance @40%

Balance @40%

Balance @40%

40%

$6,411

$45,000

$90,000

$195,000

$2,340,000

INCOME BASE

Year