Employer Tax Contributions

Tax Type	Rate	Base
Income Tax Instalment Payments (ITIP)	10% (standard); 21% (higher)	Employee's gross earnings (PAYE system)
National Insurance (Employer's Class 1)	12.8%	All earnings above secondary threshold
National Insurance (Employee's Class 1)	11% (up to weekly limit); 1% (above weekly limit)	Employee's earnings above primary threshold

Filing & Compliance

• Notify Income Tax Division within 14 days of becoming an employer by submitting the relevant registration form (T30i, T30x, T30c, or T30p).
• Submit monthly T35 Remittance Card and payments for ITIP and National Insurance by the 19th of the month following the payment period.
• Submit T37 Employer's Annual Return and T14 Deduction Cards for each employee within 30 days of the end of the tax year (April 5) or cessation as an employer. The typical deadline is May 5, but can be extended if it falls on a non-working day.

In the Isle of Man, employee tax deductions encompass income tax, national insurance, and potentially superannuation contributions, impacting an employee's net pay.

Income Tax

Income tax is calculated based on an employee's taxable income after deducting allowances. As of the 2024/25 tax year, the personal allowance for a single person is £14,500. This allowance is reduced by £1 for every £2 earned over £100,000. For married couples or civil partners electing joint assessment, the combined allowance is £29,000, subject to the same reduction for income over £200,000. Additional allowances exist for single parents or co-habiting couples with children (£6,400) and blind or disabled persons (£2,900).

Tax rates for residents are 10% on income up to £6,500 and 22% on income above that threshold, after allowance deductions. Non-residents are taxed at a flat rate of 22%. Income tax is typically deducted through the Income Tax Instalment Payments (ITIP) system operated by employers.

National Insurance

National Insurance contributions fund benefits such as state pensions and healthcare. Both employers and employees contribute. Contributions are calculated based on earnings and categorized into different classes with specific thresholds and rates. The rates and bands for the 2024/2025 tax year are not defined in the available documentation.

Superannuation

Superannuation, similar to a pension, is not mandatory but common in the Isle of Man. Employees often contribute a percentage of their salary, and employers may also make contributions. Superannuation contributions are typically deducted from an employee's gross pay.

Other Deductions and Reliefs

Several other deductions and reliefs can reduce an employee's overall tax liability. These include:

• Charitable Donations: Relief is available at 10% for donations exceeding £100, up to a limit of £7,000 per year.
• Mortgage and Loan Interest: Relief is restricted to 10% on interest up to £5,000 annually.
• Private Medical Insurance and Nursing Expenses: Relief at 10%.
• Professional Subscriptions: For subscriptions required for employment.

Tax Administration and Deadlines

The tax year runs from April 6th to April 5th. Employers must file an annual return (Form T37) and a deduction card (Form T14) for each employee within 30 days of the tax year's end. Employees must file their individual tax returns by October 6th following the tax year's end. Any outstanding tax is due on January 6th.

General Information

• The Isle of Man has no Capital Gains Tax, Inheritance Tax, or Stamp Duty.
• A Key Employee Concession can limit tax liability for new residents during their first three years.
• A National Insurance Holiday Scheme offers a potential refund for certain new residents or returning students during their first year.
• High-net-worth individuals can elect to pay a fixed annual tax amount under certain conditions.

This information is current as of February 5th, 2025, and may be subject to change. It is important to consult official Isle of Man government resources for the most up-to-date information.