Jamaica
The country profile includes data on the income taxes paid by workers, their social security contributions, the family benefits they receive in the form of cash transfers as well as the social security contributions and payroll taxes paid by the employers. Results reported include the average and marginal tax burdens for eight different family types.
It also describes the personal income tax systems, all compulsory social security contribution schemes and universal cash transfers as well as recent changes in the tax/benefit system.
The national currency is the Jamaican dollar. In 2013, the average exchange rate was JMD 98.28 to USD 1. In that year, the average worker earned JMD 358 993.22.
The Report includes estimates of the tax wedge throughout over the whole of the income distribution ordered by deciles of total labour income of formal wage earners derived from the household surveys.
1. Personal income tax system
The fiscal year for the income tax is the calendar year.
1.1. Central government income tax
The personal income tax is applied to any income for the individual arising from employment or self-employment, pensions, superannuation or other allowances, deferred pay and compensation for loss of office.
Income from employment includes all salaries, fees, wages, plus all provisions or payments in respect of living or other accommodation, entertainment and other benefits in kind.
1.1.1. Tax unit
Members of the family are taxed separately.
Individuals who are residents and domiciled in Jamaica are taxed on their world-wide income. Individuals not domiciled are taxed only on their Jamaican-source income and any other income that is remitted to Jamaica. Non-residents are taxed only on their Jamaican-source income and on remittances of foreign income to Jamaica. Individuals are considered as residents if they remain in Jamaica for six months of the tax year or more.
1.1.2. Tax allowances and tax credits
1.1.2.1. Standard tax allowances and tax credits
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A standard deduction of JMD 507 312.
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Social security contributions up to 10% of gross income.
1.1.2.2. Main non-standard tax allowances and tax credits
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The amounts of any donations not exceeding one twentieth of the statutory taxable income.
1.1.3. Tax schedule
A flat rate tax of 25% was applied to the taxable income in 2013.
1.2. State and local taxes
No state or local taxes are levied on wages.
2. Compulsory social security contribution to schemes operated within the government sector
2.1. Employee contributions
The employee contributions for the NIS and NHT programs are levied on gross wages. The education tax is levied on the statutory income which provides an allowance for the NIS contributions.
2.2. Employer contributions
Employers are required to contribute to the following public programs.
The employer contributions to the NIS and NHT programs are levied on the payroll. The HEART is also levied on the payroll, where total payroll costs exceed JMD 173 328 per year. The education tax is levied on the employees’ statutory income which provides an allowance for the employees’ NIS contributions.
3. Universal cash transfer
3.1. Amount for spouse and for dependent children
None.
4. Main changes in tax/benefit since 2013
The annual income tax allowance is adjusted each year. For 2015, the threshold was equal to JMD 557 232.
5. Memorandum items
5.1. Identification of an AW
The data refer to the earnings of workers within the formal sector. The average worker’s wage was calculated using microdata from the national household surveys.