Employment Cost Calculator for Aruba
Calculate your complete hiring costs for Aruba employees, including payroll taxes, social security contributions, employee benefits, and management fees. This salary calculator provides accurate employer cost estimates for informed hiring decisions.
Employer Tax Contributions
| Tax Type | Rate | Base |
|---|---|---|
| General Health Insurance (AZV) | 8.9% | Gross wage (up to Afl. 85,000 annual premium limit) |
| General Old Age Pension (AOV) & Widows' & Orphans' Pension (AWW) | 10.5% (combined) | Gross wage (up to Afl. 85,000 annual premium limit) |
| Sickness Insurance | 2.65% | Gross wage (up to Afl. 70,200 annual premium limit) |
| Accident Insurance | 0.25% - 2.5% | Employee's salary (up to Afl. 54,600 annual premium limit, rate based on risk) |
Filing & Compliance
- Monthly wage tax and social security declarations and payments are typically due by the 15th day of the month following the payroll period.
- Employers must submit an annual wage tax reconciliation report summarizing total wages paid and wage tax withheld for each employee, typically by January or February of the following year.
- Profit tax returns are due by June 2, with an extension to December 2 possible if a provisional return and payment are submitted by June 2.
In Aruba, employee tax deductions primarily consist of wage tax and social security contributions. Several deductions and allowances can reduce the taxable income, leading to tax savings for employees.
Wage Tax
As of January 1, 2025, Aruba implemented revised progressive income tax rates. A 0% tax rate applies to annual income up to Afl. 34,930, after which the rates are progressive, with the first bracket being taxed at 21%. The tax-free threshold of Afl. 30,000 remains in place. Thus any income up to Afl. 64.390 is either tax-free or taxed at 0% for 2025. However, social security contributions still apply to this income.
Social Security
Social security contributions are mandatory deductions covering AOV/AWW (General Old Age Insurance/Widow and Orphan Insurance) and AZV (General Health Insurance). These are deducted directly from the employee's wages and remitted by the employer.
Allowances and Deductions
Several allowances and deductions can reduce the taxable income:
- Expat Incentives: Employees who haven't worked in Aruba for at least five years and earn at least Afl. 150,000 annually are eligible for specific tax-free allowances. These include benefits in kind up to Afl. 15,000, school fees up to Afl. 25,000 per child, and housing allowances up to Afl. 2,500 per month.
- Other Allowances: Tax-free expense allowances can be provided under certain circumstances for expenses like telephone, travel, and car and representation costs.
- Deductible Donations: Donations to qualifying charities, churches, sports, cultural, scientific and public benefit organizations are deductible up to Afl. 50,000.
It's important to note that fringe benefits, including housing and tax reimbursements are generally taxable. As of January 1, 2023, the sale of shares in real estate companies and the transfer of economic ownership of real estate are subject to transfer tax. Also, as of January 1, 2023 the BBO/BAZV/BAVP tax system was initially planned to be replaced by a VAT regime, but the implementation has been postponed. The turnover tax rates were supposed to increase in 2023, with a likely VAT implementation date of January 1, 2025, or 2026. However, as of February 5, 2025, no further updates regarding these tax regimes have been officially announced. It is recommended to consult official government resources for the latest updates and regulations concerning Aruba's tax system.
