Introduction to Payroll in Jamaica
If you’re planning on forming a remote team in Jamaica, you need to carefully consider compliance with local labor laws and ensure that your payroll payments are accurate and timely. Labor laws can be complex and are subject to change at any time, so without in-country legal experts, you may have a hard time keeping up with changes and the complexity of laws and regulations.
With in-country legal expertise and support, Skuad, a Jamaica payroll company, can keep track of:
- Your remote team’s compensation and benefits
- Contributions to social security, on behalf of you and your employees
- Holiday leave and other types of leave
- Payroll and taxes
If you are building a remote team in Jamaica, you can get help from Skuad to stay fully compliant with local labor laws and tax legislation, including compliance with the laws of your country.
Payroll Process in Jamaica
The payroll process in Jamaica includes three main phases: pre-payroll, payroll calculations, and post-payroll.
In the pre-payroll phase, you will collect documentation, set policies, and prepare to pay employees while staying compliant with all laws.
Setting up the organization
Set leave policies, let employees know about pay frequency, and set attendance policies as well. Make sure all of your employees understand your policies.
Make sure your company has a registered business number. That registration number will be used to send out pay slips and tax forms.
You may have remote team members all across Jamaica. If so, policies may differ regionally.
Clearly communicate your leave policies. Certain leave is due to employees by law, such as maternity leave and sick leave. Set up a policy for requesting time off and scheduling annual vacation leave, staying careful to comply with statutory rules such as minimum annual vacation time per employee, depending on how long they’ve worked at the company.
Record all requested time off, including personal vacation time or sick leave with doctor’s notes. Document attendance timesheets. There are Biometric devices which can help keep track of time worked.
Account for all payroll components which you need to pay or provide by Jamaican law and standards, such as a minimum number of days off per year. A payroll provider in Jamaica such as Skuad can make sure your payroll complies with Jamaica’s labor laws.
Earnings, deductions, allowances, flexible benefits plans, and reimbursements are all salary components. According to your company’s policy, design salary components with diverse structures as necessary.
The payroll frequency in Jamaica is monthly, usually paid on the last day of the month. Make sure employees know their payday so they can plan their finances appropriately.
Employee information such as department names and job titles should be collected.
Payroll Calculation Phase
The main component of the process is the Jamaica payroll calculation phase. Data from the pre-payroll phase is input into a system to calculate each employee's paycheck, resulting in the salary paid after deductions, withholding, and taxes. Partnering with a payroll provider in Jamaica with an automated system can make this process easier.
The post-payroll phase is when employees are paid. After all payroll calculations are made and are complete, send your bank advice to your corporate bank for salary disbursements.
Payroll is a large expense for your company. Ensure salaries are recorded, and the accounts are balanced. Keep track of total payroll funds spent after payments have been sent out.
Payroll reporting and compliance
Deductions such as employer and employee contributions to social security are deducted at the time of payroll processing. They are then remitted to government agencies by their due dates. Any return forms can be filed after the remittance. To ensure full compliance with laws and that your payroll is taken care of, get a Skuad demo today.
Payroll Processing in Jamaica
Payroll is easier with a payroll processing company like Skuad. Your employees’ work hours will be recorded, taxes will be withheld and remitted, any necessary deductions will be taken from the pay, and payments are sent out to employees. You can be certain all of your remote employees are paid on time and have been given their benefits entitled to them by law. To outsource payroll in Jamaica, contact Skuad.
Payroll Processing Company in Jamaica
Skuad makes it easy to process payroll in Jamaica, giving you more time to focus on growing your business. Without worrying about payroll, you can spend more energy and effort on expanding your business. Contact us today to see a demo.
Payroll Management in Jamaica
Payroll management means maintaining accurate financial records for payroll, paying employees, generating payslips, and obeying statutory payroll and labor laws. That includes the gross and net salary of employees, incentives, and generating payslips for any given timeline. A payroll provider in Jamaica like Skuad can automate payroll for timely payments to your employees.
Payroll Compliance in Jamaica
Compliance with labor and benefits laws, such as taxes, leave entitlements, and other legislation is an important part of managing payroll. Labor laws can be complex and can change at any moment. Without local legal experts, you may have a hard time keeping up with complexities and changes to the labor laws. If you work with a payroll provider in Jamaica like Skuad, you can rest assured you will be in compliance with Jamaican labor laws.
Payroll Components in Jamaica
All of the following components will be handled by one of the Jamaica payroll providers if you partner with payroll outsourcing in Jamaica:
Minimum wage for workers who are not security guards is 9,000 Jamaican dollars (JMD) per week. For private security guards, the minimum wage is JMD 10,500. Payroll frequency is either monthly or semi-monthly. As of May 2022, the current currency exchange rate is 1 Jamaican dollar to US $0.0065.
The working week in Jamaica is 40 hours and the working day is eight hours.
Any hour worked above 40 hours is considered overtime. Any hours worked beyond the normal working week of 40 hours must be paid at least 150% of the regular salary, or the rate that is in the contractual agreement. Work done on Sundays and public holidays must be paid 200%.
Employers and employees must make a contribution of 2.5% based on the monthly payroll for health insurance under the National Insurance Scheme.
Permanent employees who have worked for a company for at least a year are entitled to two weeks of paid sick time off per year. Employees who have worked under a year but at least 110 days should get one sick day for every 22 days worked. A non-permanent, or casual employee, should get 10 days of sick leave per year.
Twelve weeks of maternity leave is granted for female employees, with notice given, who have worked at least 52 weeks of continuous employment at the company to receive this benefit. Eight of those weeks are paid at full salary. There is no leave for paternity or other parental leave.
There are 10 public holidays in a year in Jamaica for which employees must be given paid time off. When a holiday lands on a Sunday, the following Monday is given as paid time off. If an employee must work on a holiday, they are to be paid double pay. Employees who have worked under ten consecutive years at a company are granted two weeks of paid vacation leave per year. Employees who have worked for ten or more years are entitled to three weeks of paid vacation time.
Public holidays in Jamaica:
- New Year's Day
- Ash Wednesday
- Good Friday
- Easter Monday
- Labor Day
- Emancipation Day
- Independence Day
- National Heroes Day
- Christmas Day
- Boxing Day
Payroll Taxes in Jamaica
Taxes are a big part of payroll costs in Jamaica. The Jamaica corporate tax rate is a flat tax rate of 25%.
Employers must also pay:
- 3% for the National Housing Trust
- 3% for education tax
- 3% for Human Employment and Resource Trust
- 2.5% for social security
For employees, the income tax rate in Jamaica is a flat rate of 25% for income under 6,000,000 JMD, and 30% for incomes over that amount.
Within a probation period, employers can terminate an employment contract without paying severance or providing notice. A probation period must be mentioned in the employment contract and cannot exceed three months. An employer can terminate an employee with a written statement witnessed by a credible witness.
The amount of notice is dependent on the length of service an employee has with a company:
- Two weeks’ notice for an employee with up to five years of service.
- Four weeks’ notice for five to ten years of service.
- Six weeks’ notice for 10 to 15 years of service.
- Eight weeks’ notice for 15 to 20 years of service.
- 12 weeks notice for over 20 years of service.
Using a payroll company in Jamaica can help you with all of these payroll components.
Paying independent contractors and employees in Jamaica can be easy with the right management system. If you are ready to hire remote workers and pay them with one-click payroll services in Jamaica, stay compliant, and save time and money, contact Skuad and ask for a demo today.