Understanding BVI Payroll Calculations – Employee
There are three statutory deductions each pay period
- National Health Insurance 3.75% *
- Social Security 4%
- Inland Revenue Tax 8% (Only if the employee have made more than $10,000 for the year)
*If an employee’s spouse is not employed, the employee has to pay an additional 3.75% to the National Health Insurance board.
Let’s imagine that this pay period, the employee made $1000 and their Year-To-Date (Total earnings for the year) is $7000
$1000 – [$40 (Social Security) + $37.50 (National Health Insurance)] = $922.50 (Net Pay)
Let’s imagine that this pay period the employee made $1000 and their YTD is $15,000
$1000 – [$40 (Social Security) + $37.50 (National Health Insurance) + $80 (Inland Revenue Tax)] = $842.50 (Net Pay)
*Payroll tax is included because the employee has already made more than $10,000 for the year.
That’s it! There are some exceptions but most employees will be paid using Scenario A or B. Try our free payroll calculator at https://vihrms.com/bvi-payroll-calculator/
The Employer also has to pay taxes and we will address employer taxes in a next article.
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