Employer Tax Contributions

Tax Type	Rate	Base
Social Insurance (Employer)	18%	Gross earnings (subject to weekly min £30.45, max £53.55)
PAYE (Income Tax)	Progressive (e.g., 6% to 28% for GIBS over £25,000)	Employee's emoluments
Corporation Tax	12.5%	Company profits

Filing & Compliance

• Employers must deduct PAYE and Social Insurance from employee earnings.
• Employers must file monthly PAYE returns and an annual reconciliation.
• The tax year for individuals runs from July 1 to June 30.

Employee tax deductions in Gibraltar are determined by two systems: the Allowance Based System (ABS) and the Gross Income Based System (GIBS). Both systems feature a standard tax rate of 20% but differ in how allowances and deductions are applied. This information is current as of February 5, 2025, and might change.

Income Tax

• Standard Rate: 20% for both ABS and GIBS.
• Tax Year: July 1st to June 30th.
• Tax Return Deadline: November 30th following the end of the tax year.

Allowance Based System (ABS)

• Personal Allowance: £3,455 per year.
• Child Allowance: £1,190 per year.
• Additional Allowances: Available based on marital status, dependents, childcare costs, etc.
• Deductions: Mortgage interest, pension contributions, first-time home purchases, and medical insurance premiums.
• Residency Impact: Allowances are generally reduced proportionally for months not residing in Gibraltar.

Gross Income Based System (GIBS)

• Limited Deductions: Fewer deductions are available compared to ABS.
• Specific Deductions: Similar deductions to ABS may be present, including those for mortgages, pensions, and medical insurance. Consult current regulations for specific GIBS deductions.

Social Security Contributions

• Employee Contributions: 10% of gross earnings, subject to a minimum of £13.65 per week and a maximum of £37.00 per week.
• Employer Contributions: 18% of the employee's gross earnings, subject to a minimum of £30.45 per week and a maximum of £51.00 per week.
• Payment: Employers withhold both income tax and social security contributions and remit them to the Gibraltar Income Tax Office by the 15th of each month.

Other Deductions and Allowances

• Pension Contributions: Deduction of up to £1,500 per annum for employee contributions to approved pension schemes. Employer contributions are not taxable.
• Private Medical Insurance: Deduction of £3,000 per annum for premiums paid.
• Benefits in Kind: Taxable, but those under £250 per year are exempt. Employers can opt to pay the tax.
• Tax Credits: Available under specific circumstances, such as for individuals over 60 or full-time students.

Employer Reporting

Employers are required to submit annual returns for each employee and an aggregate report for all employees detailing emoluments, benefits, and deducted taxes.

Tax Rate Changes (2024-2025 Budget)

For individuals with gross assessable income:

• Less than £100,000: 1% reduction across all tax bands under both ABS and GIBS.
• More than £100,000: 2% reduction across all tax bands under both ABS and GIBS.

Additional Taxes

• No Capital Gains Tax: Profits from selling assets are not taxed.
• No Inheritance Tax: Transfer of assets upon death is not taxed.
• Import Duty: Varies depending on the goods.
• Stamp Duty: Applies to certain transactions. No details provided.