What is PAYE
PAYE stands for Pay As You Earn. The PAYE system enables employers to calculate and deduct taxes from their employees. Any employer who has persons earning more than $481.00 weekly or $2083.00 monthly is required to register as an employer and file PAYE returns.
PAYE Deductions: How does it work?
As an employer, PAYE is a monthly function of your payroll, which allows the Barbados Revenue Authority to efficiently collect income tax. As an employee you are to complete an Employee Declaration Form, A74:001, claiming the personal allowances to which you are entitled. You may be eligible for tax credits which reduces the amount of taxes you pay. Based on your allowances, employers will determine the appropriate tax code under which you will be taxed and deduct the requisite taxes for each pay period (weekly or monthly). Each pay period is treated separately, for example, February’s salary will only be taxed in that period. Your employer is required to file a monthly PAYE return by the 15th of each month for their employees, using the PAYE Tax Deduction Remittance Form, A47:004. Your employer is obligated to pay to Barbados Revenue Authority all taxes deducted from employees. Your PAYE return will show your basic information and a breakdown of your earnings (your TIN, name, total remuneration before deductions, your basic monthly salary, total income tax deducted and allowances such as travelling). Only TAMIS issued TINs can be used. Monthly PAYE returns can be filed using the e-filing web form option or the Bulk E-filing option on the TAMIS website http://tamis.bra.gov.bb.
Please Note: When Bulk E-Filing you are required to use the official Excel template on the website, for monthly PAYE or XML Schema here.
Any tax still owing to BRA will be reflected when completing your yearly tax return. Any additional taxes that are due should be paid by April 30th of the following year.
PAYE Guidelines and the PAYE calculator are available (here) to assist with your filing.