As an employee it is important to understand your payroll. Here are some frequently asked Payroll questions that we received from guests at our latest webinar, Understanding Your Payroll
Should Benefits in kind (BIK) be incorporated in calculating monthly PAYE? Yes. The Income Tax Act states that where a company pays expenses on behalf of its directors/employees or grants allowances or benefits to any such director/employee, the amount paid or granted shall be treated as a perquisite (BIK) of the office/employment and included as income of the director/employee.
When are taxes due for an independent contractor? Also, what is the penalty for late payment? With regard to independent contractors or self-employed persons, taxes are payable quarterly on 31st March, 30th June, 30th September, 31st December and the remainder of the tax, if any, on or before 30th April the following year. For late payments 20% interest will be charged per annum
Are pension payments to persons over 60 taxable? Pensions from the government and the National Insurance Board are not taxable. Income from certain annuities and retirement accounts are taxable if drawn upon before age 65.
Are people over the age of 65 required to pay regular National Insurance contributions? Persons who have attained the age of 65 years and started receiving their Retirement Benefit and subsequently returned to work will not be required to pay NIS contributions. However, the employer pays Class Z contributions on their behalf.
As an independent contractor can I choose to pay NIS? If I must pay NIS, who pays the employer’s contribution? No. The NIS system in T&T still does not cover the independent contractors or self-employed persons.
Do you pay NIS or Health Surcharge during No pay leave? NIS and Health Surcharge is not deducted when a person is on No pay leave
Does PAYE come out from Maternity salary? If a person is in the taxable bracket PAYE is deducted from the Maternity pay
Does an independent contractor pay their own taxes? Yes an independent contractor is responsible for paying their own taxes once they are in the taxable bracket
With regard to NIS payments, can someone continue paying NIS to make up their full deductions if they are no longer employed? Voluntary Insurance is a provision which allows an insured person who is no longer employed, to maintain a contribution record during periods of unemployment. An Insured person who is unemployed and between the ages of sixteen (16) to sixty(60) may apply to contribute voluntarily.
When in receipt of a NIS benefit, e.g., maternity , sickness , etc. are NIS and Health Surcharge deductions made from your salary? NIS and Health Surcharge deductions are not made from a person’s salary when in receipt of a NIS benefit
Is NIS charged on the basic salary alone? For National Insurance purposes, earnings include more than the basic wage or salary. NIS is charged on your gross income – basic salary plus any additional allowances including overtime, commissions bonuses etc.
How do I get an approved TD1 form if I have an annuity plan? Approval must be obtained from the BIR for claims for Annuity deductions. The documents required are: (i) A statement of premiums paid in the previous year and projected payments for current year (ii) Copy of BIR Approval of policy
In calculating tax for weekly paid is it necessary to convert the salary to monthly in order to calculate? No it is not necessary. To calculate the PAYE, the weekly salary can be projected for the remainder of the year and any year to date earnings has to be added
When you complete an NI4 form for new employees, do you include all allowances as the salary? If the allowance forms part of their regular earnings it is included
At what age can I stop paying Health Surcharge and NIS contributions? Health Surcharge contributions will cease at the age of 60 and NIS deductions will cease at 65. A person who is working and has attained the age of 65 years or is in receipt of NIS retirement pension shall be as set out in Class Z and paid by the employer
If you are an employer and need assistance managing your staff payroll, please email us at firstname.lastname@example.org