Jamaica

Company Registration

Registering a company in the Jamaica involves several steps. Here’s a summary of the process:

• Choose a Company Type:
  • Sole Proprietorship
  • Partnership
  • Limited Liability Company (LLC)
  • Public Limited Company (PLC)
  • Co-operative
• Register the Business Name:
  • Check the availability of your desired business name and register it with the Companies Office of Jamaica
• Obtain a Taxpayer Registration Number (TRN):
  • Apply for a TRN from the Tax Administration Jamaica (TAJ)
• Register with the National Insurance Scheme (NIS):
  • Obtain an NIS reference number for social security purposes
• Prepare and Submit Incorporation Documents:
  • Submit the required documents, including the Articles of Incorporation, to the Companies Office of Jamaica
• Pay the Registration Fees:
  • Pay the applicable registration fees, which vary depending on the type of company
• Obtain Necessary Licenses and Permits:
  • Depending on your business activity, you may need additional licenses or permits
• Open a Corporate Bank Account:
  • Open a bank account in the company’s name to manage financial transactions
• Register for General Consumption Tax (GCT):
  • If applicable, register for GCT with the Tax Administration Jamaica
• Final Registration:
  • Complete the final registration with the Companies Office of Jamaica and receive your Certificate of Incorporation
• Register for Social Security:
  • Register the company with the Social Security Treasury (TSS) to ensure compliance with labor laws
• Obtain Necessary Permits and Licenses:
  • Depending on the business activity, obtain any additional permits or licenses required
• Publish the Company’s Incorporation:
  • Publish the company’s incorporation in a local newspaper

Banking

It is not mandatory to make payments to employees and authorities from an in-country bank account.

Standard Banking Hours

• Monday to Thursday: 9:00 AM to 3:00 PM
• Friday: 9:00 AM to 5:00 PM

Additional Services

• ATMs: Available 24/7 for cash withdrawals and other basic transactions
• Online and Mobile Banking: Accessible anytime, allowing you to manage your finances on the go

Working Week

The standard working week in the Jamaica is typically from Monday to Friday

Standard Working Hours

• Weekly Hours: The standard workweek is 40 hours.
• Daily Hours: Typically, this translates to 8 hours per day over a 5-day workweek.

Employment Law

Employment law in Jamaica covers various aspects of the employer-employee relationship. Here are some key points:

• Employment (Termination and Redundancy Payments) Act: This act outlines the procedures for termination and redundancy, including notice periods and severance payments
• Labour Relations and Industrial Disputes Act (LRIDA): This act governs the resolution of industrial disputes and the rights of workers to join trade unions
• Minimum Wage Act: Establishes the minimum wage rates for different categories of workers
• Maternity Leave Act: Provides for maternity leave entitlements and protections for pregnant employees
• Equal Pay for Men and Women Act: Ensures that men and women receive equal pay for equal work
• Holidays with Pay Act: Regulates paid holidays and leave entitlements for employees

Tax Year 

Individual Income Tax (Taxes on Employment Income)

Tax Residency:

• Residents and domiciled individuals are taxed on their worldwide income.
• Non-residents are taxed only on Jamaican-sourced income

Tax Rates:

• 25% on chargeable income up to JMD 6 million per annum.
• 30% on chargeable income exceeding JMD 6 million per annum

Tax-Free Threshold:

• An annual tax-free threshold of JMD 1,700,088 is available to Jamaican tax-resident individuals.

Local Income Taxes:

• Income tax is imposed at the national level, with no separate local income taxes

Social Security Contributions

In Jamaica, social security contributions are managed through the National Insurance Scheme (NIS).

Coverage:

• The social security system is a compulsory contributory scheme for all employed persons, including self-employed and voluntary contributors

Contribution Rates:

• NIS Employees contribute 3% of their gross salary with annual maximum insurance wage ceiling of JMD 5 million.
• NIS Employers also contribute 3% of the employee's gross salary with annual maximum insurance wage ceiling of JMD 5 million.
• NHT Employees contribute 2% of their gross salary.
• NHT Employers also contribute 3% of the employee's gross salary
• Education Tax Employees contribute 2.25% of their gross salary
• Education Tax Employers also contribute 3.5% of the employee's gross salary
• HEART Employers contribute 3% of gross emoluments paid to employees.

Benefits:

• The NIS provides financial protection against loss of income due to injury on the job, sickness, retirement, and death of the breadwinner

Registration:

• Employers must register their business and ensure their employees are registered with the NIS

Pension

In Jamaica, pensions are primarily managed through the Government of Jamaica Pension Scheme.

Eligibility:

• Government employees with at least 10 years of continuous service can retire and receive a pension.
• Retirement age is typically 60, but early retirement is possible at 55, or in special circumstances, at 50 with approval

Pension Calculation:

• Pensions are calculated at a rate of 1/540 of pensionable emoluments, multiplied by each complete month of pensionable service.
• The pensionable salary at the date of retirement is used to compute the pension

Reduced Pension and Gratuity:

• Retirees can opt for a reduced pension plus a gratuity. The reduced pension is 3/4 of the full pension, and the gratuity is 12.5 times one-fourth of the full pension.

Minimum Pension:

• Pensioners aged 55 and older with 10–19 years of service receive a minimum of JMD 15,000 per month.
• Those with 20 years or more of service receive a minimum of JMD 19,000 per month

Payroll Operations Payroll

• Salaries are paid monthly
• Employers must maintain payroll and accounting records for at least five years
• Online payslips are permitted

Reports

• Income tax, NIS, NHT, Education Tax, and HEART contributions are reported monthly to the relevant agencies

New Employees

• Must be registered with the NIS and other applicable authorities
• Contracts should include employment terms and be signed at or before the start of employment

Leavers

• Termination must comply with the Employment (Termination and Redundancy Payments) Act
• Employers must provide notice and any statutory benefits such as unused vacation and severance pay

Employee Benefits

• Benefits may include pension contributions, healthcare, and discretionary bonuses

Expenses

• The local legislation does not offer any other specific benefits beyond the statutory ones.
• All elements such as general expenses, car mileage and company cars will be incorporated based on the company policies and how companies normally choose to pay them.

Visa and Work Permits

In the Jamaica, obtaining a visa or work permit involves several steps and requirements:

Work Permits:

• Eligibility: Foreign nationals must obtain a work permit to work in Jamaica. This applies to both Commonwealth and non-Commonwealth citizens
• Application Process: The application must be submitted by the prospective employer to the Ministry of Labour. It includes proof that the job was advertised locally and no suitable Jamaican candidate was found
• Exemptions: Certain categories of individuals, such as spouses of Jamaican nationals, may be exempt from the work permit requirement

Visas:

• Work Visas: Issued based on a confirmed job offer and work permit approval. Applicants must present a valid passport, job offer letter, work permit approval, and a completed visa application form
• Application Process: Non-Commonwealth citizens must obtain a work permit before applying for a work visa. Commonwealth citizens can apply for a work permit after arriving in Jamaica
• Documentation: Required documents include a valid passport, job offer letter, work permit approval, and visa application form
• Processing: Work permits are issued at the discretion of the Ministry of Labour, and visas are issued by Jamaican consular officials

• Jamaica offers generous investment incentives
• Payroll systems must account for multiple statutory contributions
• Published incorporation is a unique requirement
• Employers must stay compliant with labor and tax regulations or face significant penalties

Further Information For more information, or assistance with Jamaica tax enquiries please contact: gi@activpayroll.com

About This Payroll and Tax Overview Please note that this document gives general guidance only and should not be regarded as an authoritative or complete statement of the law, regulations or tax position in any country. You should always seek specific advice for each specific situation. This document should not be relied upon as professional advice and activpayroll accepts no liability for reliance on its contents.