Employer Tax Contributions

Tax Type	Rate (Employer)	Base
National Insurance Scheme (NIS)	12.75%	Insurable earnings up to BBD 5,280 per month
Pay-As-You-Earn (PAYE)	Varies (deducted from employee)	Employee's taxable income (12.5% up to BBD 50,000; 28.5% above BBD 50,000)
Training Levy	1%	Payroll exceeding BBD 130,000 annually
Unemployment Benefit	0.5%	Insurable earnings

Filing & Compliance

• Remit NIS and PAYE contributions to the Barbados Revenue Authority by the 15th of the month following deduction.
• File annual PAYE summaries by February 28th.
• Maintain payroll and contribution records for at least 7 years.

In Barbados, employers deduct Pay As You Earn (PAYE) income tax and National Insurance Contributions (NIS) from employee salaries.

PAYE Income Tax Deductions

The PAYE system facilitates income tax collection by employers. Employees complete a declaration form (A74:001) to claim allowances, influencing their tax code. Employers use this code to deduct the correct tax amount each pay period.

• Tax Rates (2025): 12.5% on the first BBD 50,000 of taxable income, 28.5% on any amount exceeding BBD 50,000.
• Basic Allowance: All employees receive a basic personal allowance of BBD 25,000. Those over 60 receiving a pension have a BBD 45,000 allowance.
• Tax Credits: Employees may be eligible for tax credits reducing their tax liability. One such credit is the compensatory income credit for residents earning between BBD 25,000 and 35,000. There's also a foreign currency earnings allowance rebate for residents earning income from outside Barbados.
• Deductible Expenses: Employees can deduct unreimbursed travel and entertainment expenses incurred while performing their duties. They can also deduct annual bonuses converted into company shares (up to BBD 7,500 or 75% of the bonus, with a 5-year holding period), trade union/statutory association subscriptions (up to BBD 240 annually), and medical exam expenses for those 40 and over (up to BBD 750 yearly).

National Insurance Contributions (NIS)

NIS contributions are mandatory for both employers and employees. These fund social security benefits like pensions, sickness, and maternity benefits.

• Employee Contributions: NIS deductions are not tax-deductible for employees.
• Employer Contributions: Employers can deduct the NIS portion they pay on behalf of their employees.

Employer Responsibilities and Deadlines

• Registration: Employers with employees earning over BBD 481 weekly or BBD 2,083 monthly must register with the Barbados Revenue Authority.
• Monthly Returns: Employers must file PAYE returns (Form A47:004) and remit deducted taxes and NIS contributions by the 15th of the following month.
• TINs: Taxpayer Identification Numbers (TINs) are required for all employees and must be included on the PAYE returns.

Additional Information

• Welcome Stamp visa holders are exempt from income tax.
• Self-employed individuals have separate tax obligations and may deduct certain business expenses.

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Disclaimer: This information is for general guidance only and is current as of February 5, 2025. Consult with a tax professional for personalized advice.