When you employ staff, there are employer obligations for tax you need to meet:
- as an employer or building contractor you are required to make deductions from your employees' or labour only subcontractors' wages. This is known as ITIS (Income Tax Instalment Scheme)
- you must submit a return for your employees or labour only sub-contractors every month
- you must pay over the combined tax and LTC deductions to the Government of Jersey
- you must keep full and accurate wage records
Register as an employer
When you start employing people you need to register with Revenue Jersey.
Register as an employer
Deducting tax and long-term care contributions (LTC)
The requirement to deduct tax and LTC applies to:
- full time employees
- part time employees
- contract employees
- Jersey resident directors who get paid a salary or fees
- labour only sub-contractors
On each pay day, you must deduct the correct amount according to that person's valid effective rate notice. The information is then sent to Revenue Jersey on a monthly return.
Tax and LTC is taken from the gross pay. Gross pay is the total of remuneration including allowances, overtime pay, commissions, bonuses and any other amounts before any deductions (like social security contributions) are made.
Tax and LTC are not deducted from incapacity benefit paid under the Social Security (Jersey) Law.
The combined tax and LTC you deduct from your employees and labour only subcontractors becomes your liability which you must pay to the Government of Jersey.
Long-term care contributions (LTC)
This deduction is included in your employees' effective rates so no additional administration is required.
If the person does not have a valid effective rate notice you must apply the default rate of 22%.
Individuals under the school leaving age
A person who is under the school leaving age in the year does not require an effective rate notice. You don't deduct tax and don't include them on your return.
Labour only sub-contractors
If a labour only sub-contractors has a valid exemption card or certificate you don't deduct any tax.
Labour only sub-contractors without an exemption card or a valid effective rate notice must have the default rate deducted.
All labour only sub-contractors must be included on your return.
Notification of rate by Revenue Jersey
If the correct effective rate is not being used, we may also notify you directly. This rate must then be used instead of the default rate.
Written notice to employees
Notice of tax deducted
When making a deduction of tax you must give your employee a written notice of the tax deducted and the effective rate applied to the deduction.
Year-end summary of tax deducted
You must give each person in your employment a written summary of the tax deductions for the year by the end of January in the following year.
Employees who cease employment
If the employee ceases employment before the end of the year a written summary of the deductions must be given when they leave for that year.
Age of employee when tax must be deducted
Tax must be deducted when an employee reaches school leaving age.
You are not required to deduct tax from employees who are under the school leaving age and these employees don't get included on your employer's return.
Calculating school leaving age
- take the individual's date of birth
- add 16 years to reach the date of the individual's 16th birthday
- add 4 months to adjust the date (the school year is offset by 4 months from the calendar year
- use the year from this date as the year the individual attained school-leaving age
Labour only sub-contractors in the building industry who hold a valid exemption card
You are not required to deduct tax from labour only sub-contractors in the building industry who can show you their valid exemption card or good compliance letter. They should still be included in your return of information regarding sub-contractors to Revenue Jersey.
Payment of wages (Jersey Advisory and Conciliation Service website)
Labour only sub-contracting income and tax
Paying your employees' deductions to Revenue Jersey
You are required, no later than 15 days after the end of each month, to remit to Revenue Jersey the total amount of tax that you have deducted from all your employees, sub-contractors or directors.
Methods of payment
Returns of information regarding employees and building sub-contractors
You are required, no later than 15 days after the end of each month, to send a return to Revenue Jersey for all:
- employees (including part time and students)
- office holders
- labour-only subcontractors
Your return must include the following information for all your employees or sub-contractors:
- employee's full name
- employee's tax reference
- employer's tax reference
- 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 for the employee
- the employment start date (if in the year) for the employee
- the employment end date (if in the year) for the employee
- exemption number (for labour-only subcontractors)
Annual ITIS filing for certain directors
If you're a director of a company, you might be able to file ITIS returns once a year, rather than every month. Annual filing of ITIS returns starts in 2019, so the first annual return will be due on 15 January 2020.
You can apply for annual ITIS filing if you meet all of the following requirements:
- are a director of a company
- own 25% or more of the ordinary share capital
- are required to deducts ITIS from payments made to you
If you qualify, you'll only be able to file annually for other company employees who meet this criteria.
How to apply
Applications for annual ITIS filing must be in writing and include the following details:
- your name and tax reference (or TIN in known)
- the name and TIN of the company or companies that will be filing annually
- the company's most recent shareholder register
If your application is successful, we'll write to you approving your request. If we don't think you're eligible, we'll tell you why.
The purpose of annual filing is to reduce the amount of paperwork needed to be completed by certain directors.
How to file employer returns
You can either use our employer return web application or by using your own payroll system.
How to file employer returns online
Late returns of information
If you don't submit your returns on time, we will send you an estimated bill. This will either be based on your previous returns or on the best available information.
You must pay the estimated notice immediately.
You have 15 days to appeal against the notice. In order to settle an appeal and replace the estimate with the correct sum, you must submit the relevant return and pay any amount that is due.
If you have 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.
Late filing penalties
If you don't file on time there are civil penalties that may be applied.
|Failure to deliver a true, complete and correct return by the due date||£100|
|If the return is still not delivered 3 months after the due date||£100 per month, up to a maximum of 9 months|
If you fail to submit your employee's information, it is also a criminal offence. If we prosecute you the court can force you to submit the data and can also apply a fine.
Failure to pay
If you don't remit your employees' tax on time it is a criminal offence. If we prosecute you the court can also apply a fine which you'll have to pay in addition to your employer's liability.