No income tax on salaries up to R8,555.50 |04 July 2016
Seychellois employees including those working on casual or part-time basis, earning a total salary (the combined total of all salaries earned) up to R8,555.50 will not be liable to any income tax as of July 1, 2016.
The Seychelles Revenue Commission (SRC) has said that to ensure fairness for employees earning above R8,555.50 up to R10,065.29, a new formula to calculate the tax rate will be applicable.
The new formula is as follows:
Tax rate = 0.15 – {8,555.50 – (Total Salary x 0.85)}
Total Salary
For example, if an employee earns R9,500, his or her new tax calculation is as follows:
Tax rate = 0.15 – {8,555.50 – (9,500 x 0.85)} = 0.0995 (x100)
9,500
This means that a rate of 9.95% will be applicable on his or her gross salary and he or she will have to remit the following to the SRC: 9.95% x R9,500 = R945.25.
The SCR is making available on its website www.src.gov.sc an income tax calculator using the formula above. This way, employees can type in their salary details and the amount of tax to be paid will be automatically calculated.
Meanwhile, the SRC has said the normal rate of 15% is applicable on the total salary for all other employees including part time and casual workers where the total salary is above R10,065.29.
Employers will have to continue to submit their payroll even if there is no income tax applicable on the salary of their employees.
Also all expatriates will continue paying 15% income tax.
The SRC has also said there will be future changes to the income tax regime and all employers and employees are advised to regularly visit the SRC website for future messages.
At the end of April this year, workers on minimum wage started taking home R1,000 more and this followed the increase in minimum salary for a 35-hour week, from R4,050 to R5,050 monthly.
The new minimum wage rates are as follows:
For workers on continuous employment, the rate increased from R26.70 per hour to R33.30 per hour, and for casual workers it increased from R30.78 per hour to R38.38 per hour.
To calculate their salary to see if it is according to the minimum wage, workers have to take the number of hours worked per week and multiply it by the minimum wage rate per hour, multiply by 52 (weeks in a year) and divide by 12 (months in a year).
For example: If you work 40 hours per week and you are in continuous employment, the calculations will be: 40 hours x R33.30 x 52 /12 = your salary should not be lower than R5,772.00 and this should be case as from April 2016.
If you work 40 hours per week and you are working casual (should not be more than 3 months with the same employer), the calculations will be: 40 hours x R38.38 x 52 /12 = your salary should not be lower than R6,652.53 as from April 2016.
Employers should not deduct income tax on a salary of R5,050.00 or lower.
Employers who pay a salary that is lower than the minimum wage or deduct tax on a salary when it should not is committing an offence and may face prosecution.
It was President James Michel who announced the increase in the minimum wage in his State of the nation address in February.
Mr Michel said the increase in minimum wage is one of the measures his government is taking to address the disparity in the standard of living which exists in our society.
“My government will continue to do even more. Because we’ve always had the interest of all Seychellois at heart. And it is never our intention to leave anyone behind,” said President Michel as he introduced a series of measures which, he said, will contribute to even greater improvement in the standard of living of a significant number of Seychellois families.