Social Security Board – New Threshold for Levy Deductions from November 2014
The Social Security Board wishes to update you on new developments in relation to the Housing and Social Development Levy.
There are a few changes emanating from the recent passage of the Housing and Social Development Levy (Amendment) Act 2014, No. 16 of 2014 in the National Assembly; and which are effective from 1st November 2014.
Please note that there has been a change in the threshold below which employees are exempt. Accordingly, this change impacts persons falling within the first payment tier only; which is comprised of the said persons who are exempted from levy deductions. There is no other change in the tiers established for the payment of the levy.
The periodic payment stipulations are now as follows:
Persons up to the new Annual Threshold of $18,720.00 per annum):
- For persons who are weekly paid no Levy will be deductible from wages up to and including $360.00.
- For persons who are paid every 2 weeks, no Levy will be deductible from wages up to and including $720.00
- For persons receiving wages twice per month or every half month, no Levy will be deductible from wages up to and including $780.00
- For persons being paid on a monthly basis, no Levy will be deductible from wages up to and including $1,560.00
All other stipulations pertaining to the other tiers remain as before.
For Tier Two (persons crossing the threshold and earning up to and including $6,500.00 per month), Levy will be deductible at the continuing rate of 3.5% of total earnings.
For Tier Three (persons earning between $6,500.01 and $8,000.00 per month) Levy will be deductible at the continuing rate of 3.5% from earnings up to $6,500.00 and 10% from that portion of earnings between $6,500.01 and $8,000.00 per month.
For Tier Four (persons earning from $8,000.01 upwards per month) Levy will be deductible at the continuing rate of 3.5% from earnings up to $6,500.00; 10% from that portion of earnings between
$6,500.01 and $8,000.00; and 12% from that portion of earnings from $8,000.01 onwards per month.
It is important to repeat that your contribution on behalf of each employee is not affected by these changes. The employer’s portion of the Levy remains at 3% and is payable in respect of all wages paid.
If you are using a version of the Statement of Wages and Contributions (C3) form which contains the outdated information, please be guided by the new updated details outlined above. This changes the details of Note 9 (located at the back of the form) relating to rates of deductions; including the Housing and Social Development Levy Exemption Guide shown as part of Note 9.
If your Statement of Wages and Contribution is prepared using a payroll package, please contact your service provider to solicit an upgrade to the application. However, our upgraded downloadable C3 Wizard will be available from our website www.socialsecurity.kn towards the end of January 2015.
Please do not hesitate to ask for guidance from a Social Security Inspector if you need further clarification.
Head Office: Bay Road, Basseterre, St. Kitts Phone: 465 2535
Branch Office: Chapel Street, Charlestown, Nevis Phone: 469 5245