KINGSTON, Jamaica – Jamaican employees should see a slight increase in their net salary at the start of the new year, according to the Tax Administration of Jamaica (TAJ).

The TAJ said in a release today that a new income tax threshold of $592,800 per annum comes into effect on January 1, 2016, moving up from the current tax-free amount of $557,232.  

The increase in the threshold means that the corresponding tax-free portion to be used by employers, as of January 2016, in making periodic payments is as follows:

• $10,716 weekly

• $21,432 fortnightly

• $46, 436 monthly

• $139,308 quarterly

TAJ advised employers to make the necessary adjustments to their payroll system to reflect the increase in the threshold, so that all employees may benefit from the increase.  

In addition to employees, all individuals resident in Jamaica, whether self-employed or pensioners will also benefit from the increase in the income tax threshold, the release added.

With the increase in the threshold, the tax paid per annum by each individual will reduce by $8,892.00 (i.e. 592,800 – 557,232 = $35,568 x 25%), while the net effect for each individual per quarter will be a reduction in tax of $2,223.00 and $741.00 per month, TAJ explained.

The public is reminded that income in excess of the threshold will continue to be taxed at 25 per cent.