Its better to be a high earner in Jamaica
It?s better to be a high earner in Jamaica
Global accounting network UHY Interna-tional has released its latest taxation study, which shows that high earners in Jamaica ? those who are paid US$1.5 million or more ? pay much less tax than in most other jurisdictions.
The research reveals that the average net take-home pay on annual earnings of US$1.5 million globally is US$897,970 with tax at 40 per cent, but that Jamaicans in this income bracket manage to keep nearly 70 per cent of their income after taxes. That amounts to just over US$1 million on average as take-home pay.
UHY studied tax data in 25 countries across its international network, which includes UHY Dawgen in Jamaica.
The study captured the ?take-home pay? for low-, middle- and high-income workers, taking into account personal taxes and social security contributions
The calculations are based on a single, unmarried taxpayer with no children, UHY said. In Jamaica, US$1.5 million is the equivalent of about J$170 million at current foreign exchange rates.
UHY Dawgen said it had no estimate of the number of US$1.5m earners in Jamaica. The Jamaica Employers? Federation also told the Financial Gleaner that earnings at that level are more likely to be CEO pay, which is not captured in its compensation surveys.
Jamaica falls in the same category as Slovakia and the Czech Republic, where those who earn US$1.5 million and more keep more than 70 per cent of pay.
UHY said that Eastern European and emerging economies continue to offer the most generous tax regimes to higher earners.
In Dubai, all taxpayers take home 100 of pay, while Russians retain 87 per cent of earnings after tax.
Overall, the study released on November 3 notes that Western European economies ? France, United Kingdom, Italy, Austria, Spain, Ireland, the Netherlands, Denmark and Belgium ? hit their highest earners with 25 per cent more tax than the global average. High earners essentially pay US$152,406 more in taxes on average in those countries.
The take-home pay for high earners in Western Europe averages US$745,563 after a 50 per cent tax bill, which is below the global average of US$897,970 pay and a tax rate of 40 per cent.
UHY points out that the highest earning taxpayers in Western Europe also face a far bigger tax bill than peers in other developed nations such as Canada, the United States, Japan, New Zealand and Australia, who retain 57 per cent of income.
Dawkins Brown, managing partner of UHY Dawgen, told the Financial Gleaner that while top earners retain more of their pay than some of the big economies, the lower income bands don?t fare as well.
Brown said that on income of US$25,000, for example, Jamaica deducts taxes of 26 per cent compared to 17.74 per cent in the US.