General tax information that will help you to understand the way taxation works in Jamaica.
Students have a part to play in our tax system, get all the information here.
What is Tax?
It is money charged by the Government to earn revenue for operating the country for example:
- Individual Income Tax or PAYE (Pay As You Earn )
- Company Income Tax
- GCT (General Consumption Tax
- Customs Duties and others.
The Tax collected is used to pay for services such as:
What is Income Tax?
It is money collected as tax from
- Profit or gain at the rate specified for each year of assessment.
What income is taxable?
The most common forms are:
- Pay and other earnings from work including bonuses, commissions and overtime.
- Profits from a business or trade.
- Interest from savings and investment.
- Dividends from shares in companies.
Do people pay taxes on all they earn?
No. All residents are entitled to an income tax threshold (i.e. a tax free amount) which can vary from year to year. Only income above this amount is taxable at a rate of 25%.
Please note that Companies do not receive a threshold and are taxed at a rate of 33⅓%.
How soon after a person starts working do they pay Income Tax?
Income Tax will be deducted from salary/income if it exceeds the threshold on a weekly, fortnightly or monthly basis whenever once a person starts earning an income.
How does someone know that they have paid the right amount of tax?
It is quite simple for person to check their own tax payment by subtracting:
- Other allowable deductions (e.g. ESOP and/or approved pension) and
- The income tax threshold from your gross pay,the balance will be taxed at a rate of 25%.
What can someone do if they had overpaid their taxes?
As an employee:
- Complete and submit a return (IT05)form and a P24 form(from your employer)
- Apply for a refund.
As a self-employed person:
- Prepare profit and loss statement
- Complete the IT01 return form
- Submit the form to Tax Administration Jamaica - Refunds Unit, 116 East Street or any tax office.
NB. If you have under-paid, you should file are turn showing the additional amount of tax due otherwise an additional assessment will be raised by Tax Administration Jamaica (TAJ).
I am attending university full time will I have to pay tax on my holiday earnings?
This depends on your total taxable income for the tax year. If this is likely to be less than the income tax threshold, then apply to the Tax Administration Jamaica (TAJ) through your employer for an exemption (P01 form) or refund (IT05) form along with the P45.
Any student grant or scholarship you receive is not treated as taxable income.
Remember that in order to transact business with any revenue department (e.g. to obtain a Driver’s Licence or a student loan etc.) you will need to obtain a Taxpayer Registration Number (TRN). You may apply for a TRN at any Revenue Service Centre, Tax Office or at the Taxpayer Registration Centre.
Are employees expected to file a tax return?
No. An employer is responsible for deducting the tax from emoluments(salary, wages, fees, bonus, etc.), and paying it over. However, if employees have additional income, they are required to file an Income Tax Return every year by March 15.
If a person starts their own business are they responsible for filing returns?
Yes. All self-employed persons, companies and partnerships are responsible for filing their statutory returns; that is NIS, NHT, Education Tax, Income tax and HEART; on their due dates each year,and making quarterly payments.