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As an employer in Jamaica, you're required to deduct statutory contributions from your employees' salaries and remit them to the relevant authorities. This guide explains each deduction, the 2026 rates, and how to calculate them correctly.
Jamaica Statutory Deductions (2026):
- PAYE (Pay As You Earn) - Income Tax (25%)
- NIS (National Insurance Scheme) - 3% employee / 3% employer
- NHT (National Housing Trust) - 2% employee / 3% employer
- Education Tax - 2.25% employee / 3.5% employer
PAYE (Pay As You Earn) - Income Tax
PAYE is Jamaica's income tax system where employers deduct tax from employees' wages before paying them. The tax is calculated on income above the annual tax-free threshold.
| Annual Tax-Free Threshold | J$1,500,096 |
| Monthly Tax-Free Amount | J$125,008 |
| Tax Rate (on income above threshold) | 25% |
PAYE Calculation Example
Employee earns J$200,000/month gross salary:
| Monthly Gross Salary | J$200,000 |
| Less: Monthly Tax-Free Threshold | - J$125,008 |
| Taxable Income | J$74,992 |
| PAYE (25% of taxable income) | J$18,748 |
NIS (National Insurance Scheme)
NIS provides social security benefits including retirement pension, employment injury, and health benefits. Both employer and employee contribute.
| Employee Contribution | 3% |
| Employer Contribution | 3% |
| Maximum Insurable Earnings (Weekly) | J$5,000,000/year |
NIS Calculation Example
Employee earns J$200,000/month:
- Employee NIS: J$200,000 x 3% = J$6,000
- Employer NIS: J$200,000 x 3% = J$6,000
NHT (National Housing Trust)
NHT helps Jamaicans own homes through low-interest mortgages and housing grants. Contributions are mandatory for all employed persons.
| Employee Contribution | 2% |
| Employer Contribution | 3% |
NHT Calculation Example
Employee earns J$200,000/month:
- Employee NHT: J$200,000 x 2% = J$4,000
- Employer NHT: J$200,000 x 3% = J$6,000
Education Tax
Education Tax funds Jamaica's education system. It's calculated on total emoluments (salary + benefits).
| Employee Contribution | 2.25% |
| Employer Contribution | 3.5% |
Education Tax Calculation Example
Employee earns J$200,000/month:
- Employee Ed Tax: J$200,000 x 2.25% = J$4,500
- Employer Ed Tax: J$200,000 x 3.5% = J$7,000
Complete Payroll Example
Let's calculate a full payslip for an employee earning J$200,000/month:
| Employee Payslip - J$200,000 Gross | |
|---|---|
| Gross Salary | J$200,000 |
| Deductions | |
| PAYE (Income Tax) | - J$18,748 |
| NIS (3%) | - J$6,000 |
| NHT (2%) | - J$4,000 |
| Education Tax (2.25%) | - J$4,500 |
| Total Deductions | J$33,248 |
| Net Pay (Take Home) | J$166,752 |
Beyond the J$200,000 salary, the employer pays:
- NIS (3%): J$6,000
- NHT (3%): J$6,000
- Education Tax (3.5%): J$7,000
- Total Employer Cost: J$219,000
Filing Requirements
Employers must remit deductions to TAJ by the 14th of the following month. You'll need to file:
- SO1 Form: Monthly Employer's Statutory Deduction Return
- SO2 Form: Annual Return of Employee Earnings (by March 1st)
Late filing attracts penalties and interest charges.
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Every instance runs standard Odoo Community with Invoicing included. You can install the other standard Odoo Community apps, such as CRM, Sales, Inventory and Website, from your instance's Apps menu.
- Create and email professional invoices with your logo
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Full accounting, payroll and Caribbean tax filing are not part of VEDTECH. Talk to us about what your business needs.
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