Employing staff and your responsibilities for paying tax and contributions

​​​​​​​​​​​​​Your employer’s responsibilities

When you start employing people you need to register as an employer.

As an employer you must:

• deduct tax and contributions from your employees’ wages
• submit your combined employer return, including manpower information
• pay the amount of ​tax and contributions deducted
• give your employees a written notice of the amounts deducted, tax rate applied and year-end summary
• keep a record of the wages paid and deductions made for 6 years

You have the right to withhold payment of wages until an employee shows you their registration card and photo ID.

Find more information on other employer’s obligations on the employing staff: step by step guide.

Deducting tax and contributions

You need to deduct tax for:

• full time employees
• part time employees
• contract employees
• Jersey resident directors who get paid a salary or fees
• labour only sub-contractors

You must deduct the correct amount on each pay day, according to that person's valid ITIS rate. The information is then sent to Revenue Jersey on a monthly return.

Tax is taken from the employee’s gross pay. Gross pay is their total salary including:

• overtime pay
• allowances
• commissions
• bonuses
• any other amounts before deductions are made

The tax you deduct from y​our employees’ salary becomes your liability which you must pay to Revenue Jersey.

​Compensation payments for redundancy

There is a tax exemption for the first £50,000 of redundancy or other termination payments. The exemption does not include payments that are remuneration or deferred pay.​

Don't deduct tax from compensation payments that are not more than £50,000. If the payment exceeds this sum, only deduct your employee's current effective rate percentage from the remaining balance in excess of the £50,000 exemption.  

Tax must be deducted from any other elements of the employee's pay.

Redundancy payments and tax

Contributions

As an employer you must pay Class 1 contributions for employees earning the minimum earnings threshold or more.

Class 1 contributions are made up of the primary and secondary contribution:

• primary contribution must be deducted from your employees’ wages before you pay them
• secondary contribution must be paid by the employer

Find more information on Class 1 contributions for employers.

Labour only sub-contractors

You don’t have to deduct tax from labour only sub-contractors in the building industry who have an exemption card or good compliance letter. However, they must be included in your combined employer return.

If they don’t have a card, letter or an effective rate, you’ll need to deduct the default rate.

Payment of wages on Jersey Advisory and Conciliation Service (JACS)

Labour only sub-contracting income and tax

Long-term care contributions (LTC)

This deduction is included in your employees' ITIS effective rates. You don’t need to do any additional administration to deduct, declare or pay LTC.

Employees’ ITIS effective rate

Your employee should provide their current Income Tax Instalment Scheme (ITIS) effective rate. This is the percentage of tax you’ll need to deduct from their salary.

If you don't have a rate, you must take the default rate of 22%.

We may also notify you if you don’t use the correct effective rate. This rate must then be used instead of the default rate.

Filing your combined employer returns

You must file your employees' tax, contributions and manpower information on the combined employer return.

You can use our employer return or your own payroll system.

Completing your combined employer return

Find more information on manpower returns.

What to include on the return

You must send us a return for all:

• employees, including part time and students
• office holders
• directors
• labour-only subcontractors

Your return must include:

• employee's full name
• employee's TIN (Tax Identification Number)
• employee's Social Security number
• employee's earnings (gross salary)
• amounts deducted from employee's earnings for approved superannuation schemes
• the amount of tax deducted and the effective rate applied
• the employment start date for the employee, if in the year
• the employment end date for the employee, if in the year
• exemption number, only for labour-only subcontractors
• social security gross pay
• amount deducted of Class 1 and Class 2 Social Security contributions
• manpower information

Paying your employees' deductions

You must pay the total amount of tax and contributions you deduct 15 days after the end of each month.

You’ll need to make 2 separate payments as tax are paid to the Treasurer of the States and contributions to Social Security.

Find more information on how to pay employers' ITIS and Class 1 contributions.

Deadlines, late filing and penalties

You must submit the combined employer return 15 days after the end of each month.

Benefits in kind need to be filed by the 15 January in the following year in which the benefit was provided.

Benefits in kind​

Late filing

If you don't file your returns on time we'll send you an estimated bill. This will be based on your previous returns or on the best available information.

You must pay the estimated bill immediately.

You have 15 days to appeal against this bill. To settle an appeal and replace the estimate with the correct sum, you must submit the relevant return and pay any amount due.

If you've already paid the balance on the estimate and the amount due on the return is lower, the difference will be held as a credit against the next return.

Penalties

You’ll have to pay a penalty if you don't file your return on time.

If you fail to file your return on time, or do not file your return, you can be taken to court and pay further penalties.​