Discover employer and employee tax responsibilities in Guam
In Guam, employers adhere to a "mirror code" tax system, mirroring US federal tax laws but with distinct rates and specifics.
Guam's income tax system mirrors the US federal system, meaning employers withhold income tax from employee wages based on a progressive tax rate structure and filing status. While the tax brackets and rates are adjusted annually, the general structure remains consistent. Employers are responsible for withholding the correct amount of income tax from each employee's paycheck and remitting it to the Department of Revenue and Taxation. For specific details on 2025 rates and brackets, consult official resources from the Department of Revenue and Taxation.
Employers in Guam are responsible for withholding and matching employee contributions for Social Security and Medicare taxes. As of 2025, the Social Security tax rate is 6.2% for both employers and employees, applied to a wage base limit of $176,100. The Medicare tax rate is 1.45% for both employers and employees, with no wage base limit. These amounts are subject to change, so it's important to stay updated with official information.
Guam imposes a corporate income tax. As of 2025, the corporate tax rate stands at 21%. This rate, while influenced by the US federal corporate tax rate, is established independently by Guam. Additional levies may apply to income exceeding specified thresholds. For the latest information on corporate tax rates and regulations, consult the Guam Department of Revenue and Taxation.
Employers in Guam are required to withhold income tax, Social Security tax, and Medicare tax from employee wages. They must also register with the Department of Revenue and Taxation and report and remit these taxes according to the prescribed deadlines. Additionally, employers need to furnish employees with Form W-2, Wage and Tax Statement, by the end of January each year, detailing wages paid and taxes withheld during the prior year.
Although specific details are not yet available for 2025, employers in Guam typically pay unemployment insurance tax to fund unemployment benefits for eligible workers. The rate and wage base are determined annually. Check with the Guam Department of Labor for updated information.
There might be other local taxes or fees applicable depending on the nature of the business or industry. For example, Guam imposes a Gross Receipts Tax (GRT), a general sales tax on most business transactions. While this is not a direct employer tax, businesses need to collect and remit the GRT. Always consult official resources or a tax professional for a comprehensive understanding of applicable taxes and regulations in Guam.
Guam's income tax system mirrors the federal system, but with its own rates and deductions.
Guam residents are taxed on all income, regardless of source. Non-US citizens or permanent residents are taxed only on Guam-source income. Gross income and deductions are determined using the same rules as the United States. Taxable income includes wages, salaries, commissions, fees, employer-paid expenses, and the fair market value of non-cash benefits like housing or vehicles. Guam's tax rates, similar to US rates, vary based on filing status (single, married filing jointly, head of household).
While Guam has its own income tax, residents also pay federal taxes like Social Security and Medicare.
Employers in Guam can offer a Section 125 Cafeteria Plan, allowing employees to pay for certain benefits with pre-tax dollars. These benefits include health insurance, dental insurance, supplemental health insurance, group life insurance (up to $50,000 coverage), health savings accounts, dependent care accounts, disability insurance, and flexible spending accounts.
Guam does not use a state withholding form. Employers withhold taxes based on the employee's W-4 form. Employees with multiple jobs should ensure accurate withholding by completing Steps 3 through 4(b) of Form W-4 for their highest-paying job to optimize withholding calculations. For 2025, the tax filing season begins on January 27, 2025. E-filing is available for simple returns. More complex returns, including those with itemized deductions (Schedule A) or business income (Schedule C), require manual filing.
It's important to remember that this information is current as of February 5, 2025, and tax laws and regulations are subject to change. Consulting a tax professional for personalized advice is always recommended.
Guam uses a Gross Receipts Tax (GRT) rather than a traditional Value Added Tax (VAT).
Guam's GRT is a tax on the gross revenue of businesses, similar to a sales tax, and is currently levied at a rate of 4%. This replaced the previous rate of 2% effective October 1, 2018. This tax applies to most goods and services sold on the island.
Businesses operating in Guam and generating gross receipts are generally required to register for the GRT with the Department of Revenue and Taxation. Specific thresholds for mandatory registration may exist, so it's advisable to consult the Department of Revenue and Taxation for up-to-date requirements.
GRT returns are generally filed and paid monthly. Electronic filing is mandatory for business privilege tax returns, and the deadline is typically the 20th of the following month.
Certain goods and services might be exempt from GRT, such as those related to public utilities or non-profit organizations. Details on specific exemptions are available from the Department of Revenue and Taxation.
The 2025 Tax Season in Guam began on Monday, January 27, 2025, and will conclude on Tuesday, April 15, 2025.
It's important to verify the latest regulations and requirements with the Department of Revenue and Taxation for any business operations in Guam, as tax laws can change. Information presented here is based on available details as of February 5, 2025, and might be subject to change.
Guam offers a range of tax incentives designed to stimulate economic activity and investment.
It's important to consult with tax professionals and the relevant Guam authorities for the most up-to-date information and specific requirements for each incentive program. Tax laws and regulations can change, and this information is current as of February 5, 2025.
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