Income Tax Frequently Asked Questions

 

Gross Salary less National Insurance Contributions (NIS), approved superannuation contribution and the tax-free income (threshold) for the period of payment multiplied by 25%.

The tax-free income is outlined as follows: If you are paid: weekly- $8,484, fortnightly $16,968 and monthly $36,764.

PAYE (Income Tax) -25%. Education Tax 2% employees, 3% employers NHT- 2% employees, 3% employer NIS - 2½% employees, employer 2½% (salary ceiling - $1,000,000). 

Click on the forms link from the homepage.

*If tax has been overpaid *If the employee was off on scholarship and tax was deducted *if the person becomes unemployed and did not utilize the full tax free income for the year *If a person qualifies for exemptions and this was not applied in calculating the tax.

12½% initial and 12½% annual allowances. Note that this is calculated on the straight line basis and the annual allowance is pro-rated in the year of purchase.

For employment of 3-years or more- use the formula 2 ¼ times Average Annual Pay for last 3 years times the number of years of service, divided by 33 1/3 years.

All persons at the rate or rates specified by the Income Tax Act. 

If the payment is made from the consolidated fund .If the payment is made under an approved Tourism gratuity scheme.  If the redundancy payment qualifies for the tax free exemptions.

At any Tax Office island wide or by using our E-Services atwww.jamaicatax-online.gov.jm

This is used as a tax credit in the year of assessment in which it was paid. It cannot be refunded nor carried forward to future years.

Effective January 1, 2010 gratuity payment up to $29,104 is tax free, however, if a person earns income in excess of $500,000 he will not qualify for this tax free gratuity.

No tax free income should be given; rather the full emoluments should be taxed at 25%.

Effective August 1, 2009:  Where cash payments are made by the employer, whether to Landlord or to the employee, the total amount paid for the allowance is subject to PAYE and all other statutory deductions.

N.B  for further information please see Technical Bulletins: The Treatment of Certain Allowances effective August 1, 2009

Yes, however, if a refund is due it will be given after your return has been examined.

Uniform $5,739, laundry $3,395 pa. In cases where the employer provides uniform for an employee in the exempt category, subtract the exempt amount from the cost of the uniforms/laundry and tax the  difference which is subject to PAYE and all other statutory deductions.

No. Capital allowance is given on cost.

No, you are not allowed to use tax threshold to increase loss.

Company - 33 1/3% (with the exception of building societies which pay 30%) Individuals - 25%.

No. If the persons are employees, i.e. they cannot decide when and where the work is performed, the hours during which the work is carried out, they do not provide their own tools, equipment and materials and they are subject to supervision and control then they should be added to the payroll and taxed accordingly.

Yes. Once the pay has exceeded the tax free income.

He completes an application form in duplicate that he gets at a RADA parish office. The forms are sent to the Ministry of Agriculture, which recommends suitable applicants to the Minister of Finance, which the Ministry of Finance approves. The approved farm and farmer are gazetted in the Jamaica Gazette and approved for a 10-year period.

Once your emoluments or statutory income exceeds the tax-free income and any qualified exemptions.

Yes, at 25%.

Yes, 6 years.

Yes. However, only the portion that relates to the business is allowable.

June 1, 2000 - March 31, 2001 = 20%
April 1, 2001 - March 31, 2002 = 10%
April 1, 2002 - December 31, 2008 = 0% (This relates to companies listed on the Jamaica Stock Exchange).
Effective January 1, 2009 Dividends paid to Jamaican resident by Jamaican resident companies = 0%
 
N.B. for further information please see Technical Bulletins: Amendment to the Income Tax Act - Taxation on Dividend Income.

Yes. However, permission must be requested in writing to the Commissioner General of Tax Administration Jamaica.

The profit or loss must be shared between the partners as agreed and each partner must return his/her share of the profit using the IT01 form.

No. However, if qualified then they are entitled to both Golden age and pension exemption. 

No.

PAYE (Income Tax) -25%. Education Tax 2% employees, 3% employers. NHT- 2% employees, 3% employer. NIS - 2½% employees, employer 2½% (salary ceiling - $1,000,000)

For employment of 3-years or more- use the formula 2 ¼ times Average Annual Pay for last 3 years times the number of years of service, divided by 33 1/3 years.

Yes. However, permission must be requested in writing to the Commissioner General of Tax Administration Jamaica.  Inland Revenue Department.

Yes. Provided that all the necessary conditions outlined by Tax Administration Jamaica have been met.

At any Tax Office Collectorate or Revenue Service Centre Islandwide.

Yes. If the total income exceeds the tax free amount plus exemption(s), then tax will be payable on the excess. The threshold and exemption(s) are outlined as follows: Tax threshold $557,232 (as at January 1, 2015). Pension exemption $80,000 and Golden Age relief (65 yrs. & over) exemption - $80,000.

The person is exempted under Section12 (y) (i) of the Income Tax Act - -person suffering from a disabling permanent physical handicap resulting from illness, injury… however, the person must be certified by the Minister responsible for Social Security on the advice of Chief Medical Officer.

No. It applies to specific industries - in particular manufacturing, agriculture etc.

Yes. If he/she is regarded as self-employed.

Yes, the return should still be filed although you have made a loss.

An approved farmer is one who is approved under Section 36D of the Income Tax Act for engaging in a prescribed agricultural activity. He must keep separate books of accounts for his framing activity.

The full payment is taxable at 25%.

Yes. 25%

Yes, once the person is earning income exceeding the tax threshold.

No, only "approved" farmers. 

 

 

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