21 July 2011
The States Assembly has agreed to increase Social Security contributions for employers of higher earners.
From 1 January 2012, additional Social Security contributions will be paid on the earnings of employees who have incomes above the current ceiling of £44,232 per year. The new 2% contributions will be paid by employers on their employees’ earnings above £44,232 and up to £150,000 per year.
Class 2 contributions
The change will also affect those who pay Class 2 contributions and have an income of more than £44,232 per year. Class 2 contributions are paid by the self-employed and by people without employment. They will also pay a 2% rate on income above the current ceiling.
The plans include a change to the system, which will allow the newly self-employed to base their contribution liability on the first 2 to 3 years of trading, using estimates of their current results, rather than previous years’ earnings. This will remove what is often cited as a disincentive for entrepreneurs considering their first step.
The Social Security Department will be communicating with businesses and their representatives to help them prepare for these changes and www.gov.je will be updated as new information is available.
gov.je