Trinidad & Tobago
Trinidad and Tobago offers a robust investment climate, underpinned by its status as Latin America's largest exporter of liquefied natural gas (LNG) and a significant producer of petrochemicals. The government actively promotes foreign investment through incentives such as tax exemptions, research and development grants, and benefits within Special Economic Zones. Key sectors attracting investment include energy, manufacturing, tourism, and information and communications technology (ICT).
Discover payroll, tax & employment law insights for Trinidad and Tobago. Access expert guidance for business success in this dynamic Caribbean economy.
1. Introduction to Trinidad & Tobago
2. Setting Up a Business
3. Employment Practices
4. Taxation & Social Security
5. Payroll Operations
6. Hiring & Termination
7. Compensation & Benefits
8. Visas & Work Permits
9. Location-Specific Considerations
1. Introduction to Trinidad & Tobago
Doing Business in Trinidad and Tobago
After over 140 years of success in oil and gas, Trinidad and Tobago has a well-established economy with gas-based production exceeding oil production. The twin-island republic has one of the most diversified economies in the English-speaking Caribbean from energy and manufacturing to services and eco-tourism. The Government of Trinidad and Tobago has embarked on a thrust to further diversify the economy by inviting both local and foreign investors to take advantage of available investment opportunities within the country’s non-energy sectors.
Basic Facts about Trinidad and Tobago
| Population: | 1.369 million (World Bank, 2017) |
| Capital: | Port of Spain |
| Major Languages: | English |
| Monetary Unit: | Trinidad and Tobago dollar |
| Main Industries: | Petroleum and petroleum products, natural gas, chemicals |
| Internet Domain: | .tt |
| International Dialing Code: | +1868 |
2. Setting Up a Business
Registrations and Establishing an Entity
A local entity must be established in order to process a payroll. The company must:
- Register as a legal entity with the company’s registrar
- Register with the Board of Inland Revenue (BIR) to obtain a BIR number and a PAYE number. This process can take approximately two months.
- Companies are legally obligated to register for a Board of Inland Revenue (BIR) file number to be used in payment of taxes and filing of returns.
- All companies who hire employees must also obtain a Pay as you Earn (PAYE) number from the BIR.
- Employers are required by law to register as an employer for national Insurance within 14 days of hiring their first employee.
- The registrations process can take on average 10 to 15 working days.
Banking
Employees can be paid using domestic bank transfers (ACH) or via cheque payment. The authorities must be paid via cheque. There is an online payment option for NIS, which is in its initial implementation stage; it is not available for public use yet. Banks are open Monday to Thursday from 8am to 2pm and Fridays from 8am to 1pm and then 3pm to 5pm. Some mall branches are open Monday to Friday from 10am to 5pm. Royal Bank of Canada Trinidad & Tobago Limited opens in certain malls on a Saturday.
3. Employment Practices
Working Week
The regular working week in Trinidad and Tobago is Monday to Friday 8am - 4pm.
Holiday Accrual / Calculations
Employees are legally entitled to 10 days of paid vacation leave at the employee’s basic wage rate for each continuous year of service. Depending on the nature of the employment contract, national holidays may be granted as paid or unpaid leave. If an employee is requested to work on a holiday, they are entitled to double pay. Standard payroll calculations will apply for any payment that is made.
Maternity Leave
Female employees are entitled to 13 weeks maternity leave. 6 of the 13 weeks are usually taken prior to the birth of the child and the remaining 7 are to be taken after the birth. The allocation is not mandatory. The female employee must have been continuously employed by the employer for a period of not less than 12 months to be eligible for the maternity benefit. The employee is entitled to receive 1 month’s leave with full pay and a further 2 months with half pay. Standard payroll calculations will apply for any payment made.
Paternity Leave
By law, paternity leave is not mandatory in Trinidad and Tobago.
Sickness
Employees are legally entitled to sick leave; however, there is no stipulation in the law as to how much sick leave they can take or whether or not the employee should be paid. It is common practice to allow employees 14 days sick leave, but whether or not it is paid is dependent on the employer’s policies/practices. The employee is expected to claim through the NIB if unpaid by the employer.
National Service
There is no National Service applicable in Trinidad and Tobago.
4. Taxation & Social Security
Income Tax
The Pay-As-You-Earn System (PAYE) is applicable in Trinidad and Tobago and was introduced in 1958. The employer has the responsibility to deduct taxes from the emoluments (salary, wages, etc.) of their employees in accordance with the PAYE regulations each time a payroll is processed and paid. The employer should ensure that they receive a TD1 Form from the employee to accurately determine the amount of tax to be deducted. An individual under 60 years, who is non-resident in Trinidad & Tobago and is in receipt of emolument income arising in Trinidad & Tobago, is subject to tax under the PAYE system.
The total amount of income earned in Trinidad and Tobago is taxable whether or not it is received here. Taxpayers are entitled to an annual Personal Allowance of TT$90,000.00 (effective January 1, 2023), plus 70% of NIS employees contributions and a taxpayer’s annuities approved by the BIR, up to a maximum of total pension contribution of TT$30,000.00 annually. Any annuity premiums above this amount are not tax deductible. Income tax is not payable on the first TT$90,000.00 of income; therefore, no income tax is due if earnings are less than this amount. The excess of the personal allowance, 70% NIS contribution and annuities approved by the BIR is taxed at a rate of 25% if the chargeable amount is less than TT$1 million annually. Effective January 1, 2017, chargeable income exceeding TT$1 million attracts a PAYE tax rate of 30%.
PAYE must be paid by the 15th of the following month. If the 15th falls on a weekend or holiday then taxes are due on the first working day thereafter. You can reduce the amount of tax to pay by declaring tax-deductible expenses. There are certain tax allowances and credits that may apply. If taxes are not paid on time then a penalty of 25% of the tax payable will apply and interest at a rate of 20% on the combined tax and penalty.
Health Surcharge
Health Surcharge is a tax charged on employment. It is charged and payable by every employed person who pays or is liable to pay contributions under the National Insurance Act and individuals other than employed persons who are liable to furnish a return of income. Exemptions include those under the age of 16 and over 60 years.
Health Surcharge is payable at two rates:
- Weekly income more than TT$109: TT$8.25
- Weekly income less than TT$109: TT$4.80
Employers must deduct this from salaries at each pay period and pay to the board by the 15th of the month following the month in which the deduction was made. Health Surcharge must be accompanied with the PAYE/Health Surcharge Monthly Return. Penalties include a 25% penalty and interest at 20% on both the outstanding amount and penalty.
Social Security
Earnings include basic wage/salary, allowances, overtime, commissions, bonuses, and more. Contributions are structured into 16 earnings classes. Effective September 5th 2016, contribution rates are 13.2% of insurable earnings. The income ceiling is $13,600.00 per month. The employer is responsible for remitting the total contribution. Late payments are subject to a 25% penalty and 15% interest. Specific exemptions and international assignments are noted.
5. Payroll Operations
Reporting
- Monthly: Employers must submit PAYE/Health Surcharge Monthly Return and NI187 Statement of Contributions with payments by the 15th. NI184 Statement must also be filed.
- Yearly: TD4 and Annual Return of Remuneration Paid, Income Tax and Health Surcharge Deducted and Remitted must be submitted by end of February. Multiple copies must be included.
Reports
Payroll reports should be kept for 10 years.
6. Hiring & Termination
New Employees
Must be registered with the National Insurance Board (NIB) within the first 7 days of employment. Employees must register with the BIR and submit TD1 form. This applies to both expat and local employees.
Leavers
Final payment timeline is not specified in legislation. A Termination Certificate must be submitted to the NIB. Severance payment requires BIR approval.
7. Compensation & Benefits
Employee Benefits
There are no specific, non-standard local benefits. Many companies provide private health and pension plan contributions. Workmen’s compensation insurance is mandatory. Company cars are considered a taxable fringe benefit.
Expenses
Where companies pay expenses on behalf of employees or grant allowances, these are treated as perquisites and taxable income.
8. Visas & Work Permits
Visa Requirements
Entry visa required unless exempt (e.g. Commonwealth, EU, USA, CARICOM). Conditions apply for citizens of Venezuela and Suriname among others.
Work Permits
Work permits are required for foreign nationals working more than 30 days. Permits are occupation- and employer-specific. The employer or representative must submit applications. Documentation includes police certificate, passport copy, and application form. The Work Permits Advisory Committee will review and notify of a decision within 4–6 weeks.
9. Location-Specific Considerations
Minimum Wage (2025)
Effective January 01, 2024: TT$20.50 per hour.
https://www.labour.gov.tt/minimum-wage-increase
Further Information
For more information, or assistance with Trinidad and Tobago 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.
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