How can an Umbrella Company Help with Contracting in Jamaica?
Most freelance workers aren’t superheroes who successfully tackle these issues all on their own. There are companies who specialise in helping workers make the most out of their contracts.
They’re called Umbrella Companies (or, contractor management companies).
Basically, an Umbrella Company acts as your full-time employer, even though you maintain your independence as a contractor. They collect and filter payments from your clients, filtering out the necessary social security and fees. You send them your timesheets, and they send you payments.
Because they act as your “employer,’ they can sponsor you and provide a single work permit for multiple contracts in Jamaica. Even better, most are experts in Jamaica and expat tax law, meaning they’ll also help you optimise your earnings in Jamaica.
Although the Umbrella Company is technically your “employer,” you’re essentially freeing yourself to work even more independently. You still dictate your contracts, your hours, your schedule. The Umbrella Company simply filters out the time-consuming admin and immigration issues, allowing you to focus on your new contract.
Can I Organise My Taxes and Work Permit Myself?
Generally, you need to have an employer sponsor in order to secure the appropriate work permit and work visa for Jamaica.
If you’re working independently, it can be difficult to find clients willing to sponsor you. Moreover, even if your client can do this, you’ll need a new sponsor each time you decide to take on a new contract. Of course, every new sponsor will mean more paperwork.
Also, are you familiar with the intricacies of the tax system in Jamaica, as well as your own country’s laws on overseas earnings? If so, good on you!
However, if you’re like the rest of us, figuring out (much less reducing) your tax liability in Jamaica and your home country can seem like full-time work in itself.
A Contractor’s Guide to Taxes in Jamaica
One of the most consistently challenging aspects of contracting in Jamaica is complying with the country’s tax system. As well as paying tax in Jamaica, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.
How do I calculate my taxable income in Jamaica
If you’re working in Jamaica under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Jamaica for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Jamaica, but contractors may not be offered this service because of their short stay with each employer.
Anybody who can’t pay their tax in Jamaica through PAYE is left with the prospect of doing everything themselves.
Do you know much about Jamaican Tax Law? Does Jamaica have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Jamaica can range from 25 to 30 percent, and you need to be sure you are placed in the correct tax brackets.
Tax Filing as a Contractor in Jamaica
| When Do You Need to Lodge Your Tax Return? | The tax year in Jamaica is the calendar year (December 31). Tax returns may be filed following the tax year. |
| Tax Filing Deadline | March 15 |
| Can you file it online? | Yes, tax returns may be filed through their online portal. |
How to File Taxes in Jamaica as a Contractor
The process for filing taxes in Jamaica involves:
Step 1: Ensure that you have a valid TRN. Create a login for the Jamaican tax portal here(link is external).
Step 2: Register to use the online tax system by filing out an “Electronic Filing Account Registration Form (EF02)”. You can download it online(link is external) or complete it at your local tax office. Submit the form alone with your TFN to the local tax office. Upon satisfactory submission of the documents, a confirmation email will be sent to you.
Step 3: Log into the tax portal(link is external).
Step 4: Select the period for which you want to file the return, then select “file return”.
- You will be required to have the P24 form (Certificates of Pay and Tax Deducted).
Step 5: Select the form that you will file. Common forms include:
- Form IT05: Return of income and tax payable – individuals (PAYE). This form is used by any persons taxed under the PAYE scheme whose source of income is from salaries, wages, pensions, dividends, interest and investment interest.
- Form IT01: Return of income and tax payable – individuals (self-employed). You will also be required to file this return if you are receiving income from other sources.
Step 6: Enter relevant data into the form and upload any attachments as required. Complete the declaration and submit the return.
Step 7: If you have any outstanding taxes due, select “Make a payment”. Enter the payment information and contact information.
- A valid credit card will be required.
Step 8: Select “Enter payment now” to add your credit card details. Print/write the reference number for your records.
Additional Information
- List of income tax forms: https://www.jamaicatax.gov.jm/income-tax1(link is external)
- Digital copy of the 2018 (link is external)Form IT05(link is external).
Tax Figures in Jamaica
| Currency | Jamaican Dollar (JMD) | ||||||
| Tax-free Threshold in Jamaica | None | ||||||
| Income Tax Rates |
|
|---|
Tax Residency in Jamaica
When do you become a tax resident in Jamaica
You become a tax resident in Jamaica when:
You become a tax resident in Jamaica if you stay there for 6 months or longer. Other factors that may be considered include whether you (or your spouse) have a place of abode available for use in Jamaica, and if you habitually visit Jamaica for substantial periods. The tax authorities regard periods totalling 3 months as substantial and visits as habitual if you are present in Jamaica for approximately 3 months annually for 4 consecutive years.
Does the 183 day rule apply in Jamaica
Yes
Am I taxed on my global income in Jamaica
Individuals who are resident and domiciled in Jamaica are taxed on their global income.
Individuals who are resident but not domiciled in Jamaica are taxed on their Jamaican-source income and on foreign-source income that is remitted to Jamaica.
Non-residents are taxed only on Jamaican-source income and one remittances of foreign income to Jamaica.
Can you set up your own Limited Company in Jamaica?
| How long does it take to set up | 3 days |
| How much does it cost | JMD 28,000 |
| Is it easy? | Starting a Business Rank: 5 https://www.doingbusiness.org/data/exploreeconomies/jamaica |
Tax Calculator in Jamaica
If you are a contractor and want a calculation on your tax and net retention in Jamaica, we can supply it to you free of charge.
Using an Umbrella Company for Income Tax in Jamaica
Contractors in Jamaica are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Jamaican umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).
The companies are experts in Jamaican taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Jamaican tax office or tax department directly including processing your tax refund if you are eligible.
How We Can Help You with Tax in Jamaica
We work with numerous umbrella companies in Jamaica, many of whom are experts in tax and immigration laws. If you have any questions about tax in Jamaica, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Jamaican work permit.
Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Jamaica but without the overhead of directly dealing with the Jamaican tax authorities. Get in touch with us today for some reliable advice on tax in Jamaica!
A Contractor’s Guide to Work Permits in Jamaica
Immigration is one of the primary concerns for any contractor hoping to start working in Jamaica. Permanent employees will find it easy to get their Jamaican work permit because they’ll receive “sponsorship” for their entire stay from their prospective employer.
The Jamaican work permit is dependent on this sponsorship because it confirms that you’ll be earning money during your stay in the country. Contracting in Jamaica is more difficult because the work permit is tied to one employer, so you have to change it to suit each new contract. Thankfully, umbrella companies provide a convenient and effective solution to this issue.
How Does an Umbrella Company Work?
Most people want to do their work, earn their money and enjoy their spare time without taking on loads of admin in a new country. That is why an umbrella company can help.
When you’re working through an Umbrella Company, you’ll essentially be outsourcing the admin and tax issues to specialists.
While the umbrella company will charge a fee, you’ll likely end up saving more money in the long run: you’ll be able to focus on your work, expertly reduce your tax liability, and comply with all laws and regulations in Jamaica (which means avoiding fees, fines, or even worse penalties).
How Can We Help You?
There’s a huge variety of Umbrella Companies with different specialities and advantages in Jamaica. How do you find the right one for your circumstances?
We work closely with Umbrella Companies all throughout Jamaica and match contractors with the right company for them. If you’ve already secured a contract in Jamaica, we can help you find your best match (for free). Or, we can simply give you feedback on your situation (for free).
