Registration

An employer is any person (sole trader, business, partnership, company or other legal entity that hires an individual person to perform duties for a salary, wage or fee.

Once a person becomes an employer, registration as an Employer with the FRCA must be done within 30 days.

This applies even if the individual is to be employed on a casual or seasonal basis.

The responsibilities of an Employer are covered under Section 81 of the Income Tax Act, and the Income Tax (Employments) Regulations.

The Employer Details section of the Taxpayer Registration form(s) either
(IRS001 or IRS003) must be completed.

Copies of the Regulations may be obtained from the FRCA upon request.

When should an Employer register?

For income tax purposes, employers must register within 30 days of the commencement of any trade, business, profession or vocation; if the person will be required to pay Provisional tax (Section 83) and/or will have employees (Paragraph 3 (1), Section 81 – Income Tax (Employment) Regulations).

What are the Employer Details in the Application Form?

This section must be completed only for applications by sole traders who employ at least one person.

You must complete all items. If an item is not applicable write “N/A” in the box.

Write your postal address in the box provided. FRCA will send you forms and correspondence in relation to your PAYE matters. If this address is the same as the mailing/tax agent’s address in the personal details section, write “As above”.

Write your estimated monthly wages payment, and the number of employees who will have tax deducted from their wages, in the boxes provided.

If you wish to make separate PAYE payments for different branches of your business, complete the branch names and address in the boxes provided. If you have more than 2 branches attach a list to the application.

 

PAYE Process Procedures

PAYE tax is collected through source deductions from salaries, wages and other remuneration receivable from employment.

The tax is calculated on chargeable income after the deduction of allowances.

Employers are responsible for the deduction and remittance of PAYE tax to the Fiji Revenue & Customs Authority.  They are also required to comply with other regulations and instructions that may be issued from time to time.

The features for these regulations are contained in Sections 80, 81 and 82 of the Income Tax Act.

PAYE Employee Declaration (IRS458)

An employee may file a declaration stating the PAYE allowance to which he/she may be entitled.  This will enable the employer to determine the correct amount of tax to be deducted in each pay period.

Allowances

PAYE allowances that may be claimed as a deduction are:

• Marital status.
• Dependent child.
• FNPF/Insurance.
• Elderly Dependent

The employer is required to ascertain the amount of total annual allowance applicable to each pay period:

• weekly – divide total allowance by 52
• fortnightly  – divide total allowance by 26
• bi-monthly  – divide total allowance by 24
• monthly -  divide total allowance by 12

and enter the amount in the appropriate part of the PAYE declaration form.
This amount is referred to as the “Tax Free Emoluments”.

Overtime Payments

Overtime payments are to be included as part of the regular emoluments and PAYE tax is to be calculated on this total.

 

Tax deductions on extra ordinary payments (Legal Notice 69)

If an employer makes a payment in respect of bonus, gratuity or other additional earnings or retrospective increase in emoluments the following basis for tax deduction should be made based on a reasonable estimate of what that employees total emolument will be from the present employer for that calendar year including the payments that is being made.

(Effective from 1 January, 2012)

Chargeable Income (FJ$)	Tax Payable (FJ$)	Social Responsibility Levy
0-15600	Nil
15,601 – 22,000	7% of excess over $15,600
22,001 – 50,000	448 + 18% of excess over $22,000
50,001 – 270,000	5,488 + 20% of excess over $50,000
270,001 – 300,000	49,488 + 20% of excess over $270,000	23%
300,001 – 350,000	55,487 + 20% of excess over $300,000	24%
350,001 – 400,000	65,487 + 20% of excess over $350,000	25%
400,001 – 450,000	75,487 + 20% of excess over $400,000	26%
450,001 – 500,000	85,487 + 20% of excess over $450,000	27%
500,001 – 1,000,000	95,487 + 20% of excess over $500,000	28%
1,000,001 +	195,488 + 20% of excess over $1,000,000	29%

 

Casual or seasonal employees

The Chief Executive Officer may advise employers of the amount of tax to be deducted if the emoluments are of a nature that deduction of tax (by reference to the tax tables) would constitute undue hardship.

In the case of persons hired under a “contract for service”, the payer is not required to deduct tax if a valid “certificate of exemption” is produced.

Death of an employee

Deductions are to be made in accordance with the provisions of the regulation unless the Commissioner of Inland Revenue directs otherwise.

Exemptions from tax deductions

Tax shall not be deducted in the following cases:

• emoluments exempted from the payment of tax (e.g. pension).
• where total income or chargeable income falls below the tax threshold.
• payments in respect of domestic services.

Payment of PAYE deducted

The employer is to remit to FRCA on or before the end of the month following the month in which the tax was deducted on remittance advice IRS350.

Upon cessation of business, the PAYE payment is to be paid within 7 days of the day in which business ceased to operate.

PAYE Employee Certificate

The employer is required to furnish to the employee on or before the last day of February each year a PAYE Employee Certificate (IRS452) in duplicate, showing the following details:

• name and address.
• tax identification number/employment number.
• gross emoluments.
• value of benefits.
• total tax deducted.
• total personal allowances claimed.
• period of employment.

Two (2) further copies:

• triplicate to the Chief Executive Officer.
• quadruplicate retained by employer for record purposes.

Other instances for certificate to be furnished to employees:

• cessation of business – not later than 1 month after business ceases(PAYE Employee Certificate (IRS452)
• cessation of employment – not later than 7 days (Employer’s Certificate of salary or wages paid (IRS460)
• death of an employee – not later than 30th of the following month to the legal representative or next of kin.

Salary/Wages advice slip

An employer is to furnish an employee particulars of payment including the gross emoluments and amount of tax deducted in the appropriate form.

Records to be kept

• wages record/payroll
• summary of emoluments (PAYE Annual Summary)

Annual return of total emoluments (P4 Annual Summary)paid and taxes deducted for each employee is due by the end of February each year following the year in which tax was deducted.  This should be submitted to the Commissioner in duplicate showing the following particulars:

• name and address of employer.
• gross amount of emoluments paid to all employees.
• total tax deducted from all employees.
• total value of cash and non-cash benefits paid to all employees

Inspection  

All wages sheets and other records relating to the calculation or payment of emoluments must be produced for inspection whenever required by the Commissioner.

Books of Account

Every employer is required to keep adequate books of accounts for tax purposes. Every book of account and documents which are essential to explain any entry is to be preserved for a period of not less seven (7) years.

Electronic Reporting Requirements

Employers must provide details of payments to employees in electronic together with the hard copies.

Electronic reporting is required by the following employers:

• all those in the public and the private sector.
• employers with 50 employees and above

What to do with the completed form

You may either post the form to us or bring it into any of our Customer Service Centers.

Fringe Benefits Tax

All employers providing non-cash fringe benefits to employees are obliged to register for fringe benefits tax.

Where can I get the information on value of fringe benefits provided to employees by employers?

The fringe benefits tax brochure and Practise Statement will provide you with a more detailed information on the value of fringe benefits.

PAYE Tax Table

Employers are required to use the prescribed tax tables that are available on the FRCA website.

 

Tax deductions on extra ordinary payments (Legal Notice 69)

Instructions for the deduction of tax from extra ordinary payments are also given on the 1^st page of the tax tables.

Extra ordinary payments include:

• tax arrears.
• bonus.
• overtime.
• gratuity.
• lump sum payments.

When making deductions of tax from extra-ordinary payments, the employer must add that payment to the employee’s total estimated income for the year and apply the rate of tax under which the total estimated income falls.

If an employer makes a payment in respect of bonus, gratuity or other additional earnings or retrospective increase in emoluments the following basis for tax deduction should be made based on a reasonable estimate of what that employees total emolument will be from the present employer for that calendar year including the payments that is being made:

Tax rates

(Effective from 1 January, 2012)

Chargeable Income (FJ$)	Tax Payable (FJ$)	Social Responsibility Levy
0-15600	Nil
15,601 – 22,000	7% of excess over $15,600
22,001 – 50,000	448 + 18% of excess over $22,000
50,001 – 270,000	5,488 + 20% of excess over $50,000
270,001 – 300,000	49,488 + 20% of excess over $270,000	23%
300,001 – 350,000	55,487 + 20% of excess over $300,000	24%
350,001 – 400,000	65,487 + 20% of excess over $350,000	25%
400,001 – 450,000	75,487 + 20% of excess over $400,000	26%
450,001 – 500,000	85,487 + 20% of excess over $450,000	27%
500,001 – 1,000,000	95,487 + 20% of excess over $500,000	28%
1,000,001 +	195,488 + 20% of excess over $1,000,000	29%

 

Normal tax is levied on Chargeable income (i.e. total income less allowances).

There are separate rates of normal tax for resident and non-resident sole-traders:

• 2001-2012 Resident tax rates
• 2001-2012 Non-resident tax rates

Further information:

For further assistance on the exemptions and deductions, you may send an email request to

tepu@frca.org.fj, cectaxquerysuv@frca.org.fj or info@frca.org.fj

 

 

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