Employer Tax Contributions

Tax Type	Rate	Base
PAYE (Income Tax)	Progressive (0% - 30%)	Employee's taxable income
National Insurance Contribution (NIC) - Employer Share	6.5%	Employee's insurable earnings (max XCD 8,333.33/month)
National Insurance Contribution (NIC) - Employee Share	4.0%	Employee's insurable earnings (max XCD 8,333.33/month)

Filing & Compliance

• Monthly PAYE and NIC contributions due by the 15th day of the following month.
• Annual reconciliation statements for PAYE (P7 form) and NIC (P3 form) are required.
• Employers must deduct tax according to Inland Revenue Department tables and keep records.

In Saint Lucia, employee tax deductions primarily consist of National Insurance Contributions (NIC) and deductions for various allowances and expenses.

National Insurance Contributions (NIC)

Employees contribute 5% of their gross salary to the NIC, capped at a maximum contribution of XCD 250 per month (on earnings up to XCD 5,000 monthly). The employer matches this 5% contribution. The NIC funds benefits like retirement, sickness, and disability.

Income Tax

Saint Lucia does not impose income tax on employment income. However, income from other sources like self-employment, investments or other sources may be subject to income tax if combined income exceeds XCD 18,400 threshold annually. Such income tax is separate from PAYE and requires filing an annual tax return.

Allowances and Deductions

While not technically deductions in the sense of reducing tax withheld, several allowances and deductions can reduce an individual's taxable income if the XCD 18,400 income threshold is exceeded:

• Personal Allowance: XCD 25,000 (also for pensioners)
• Spouse Allowance: XCD 1,500 (reduced if spouse's income exceeds XCD 1,500)
• Child Allowances: XCD 1,000 to XCD 2,000 per child
• Higher Education Deduction: XCD 5,000
• Life Insurance/Retirement Benefits: Up to XCD 8,000 for premiums paid in Saint Lucia, XCD 3,000 for premiums paid outside (with further limitations)
• Housekeeper Allowance: XCD 200
• Dependent Relative Allowance: XCD 350
• Owner-Occupied Property Expenses: Mortgage interest, property taxes, insurance premiums (actual amounts), upkeep/maintenance (up to XCD 10,000), and solar water heating system installation (up to XCD 6,500). Additional deduction up to XCD 25,000 is available between 2023-2025 for solar photovoltaic system.
• Charitable Donations: Actual amount (under a deed of covenant for at least three years)
• Medical Expenses: Actual amount (or a standard deduction of XCD 400 if no actual expenses)
• Other Deductions: Shares in building/cooperative societies (up to XCD 5,000), Registered Home Ownership Plan investments (up to XCD 6,000), student loan interest (actual amount), and new shares in resident public companies (up to XCD 5,000).

Important Note: The total allowances and deductions (excluding personal allowance and medical expenses) are subject to limitations. Please consult with us or a tax professional to check your status.

Filing Requirements and Deadlines

Employees must complete a TD Form (AU-1) and submit it to the Inland Revenue Department within 14 days of starting employment. The employer uses this form and the official tax deduction tables to calculate the correct NIC deductions. Annual income tax returns are due by March 31st of the following year. Late filing penalties apply.

Other Statutory Deductions

Beyond NICs, employers must also manage statutory deductions for:

• Vacation Leave, Sick leave and Maternity leave

It is crucial for employers to remain updated on current regulations and ensure accurate deductions and contributions to maintain compliance with Saint Lucian employment laws.