Several amendments have recently been made to the Wage Tax Act, affecting the tax treatment of bonuses, vacation allowance, and overtime compensation.
Adjustment to the treatment of vacation allowance and bonuses
With retroactive effect from January 1, 2025, the amount that is exempt from wage tax for vacation allowance and for bonuses/gratuities has been increased. An exemption of SRD 19,500 (approximately USD 530) now applies to both vacation allowance and bonuses/gratuities. Previously, the maximum exemption per category was SRD 10,016 (approximately USD 270).
Revision of the tax brackets for overtime compensation
With retroactive effect from July 1, 2025, the designated tax rates for overtime payments have been revised. The new monthly tax brackets for overtime compensation are as follows:
- Up to and including SRD 2,500: 5%
- From SRD 2,501 to SRD 7,500: 15%
- More than SRD 7,500: 25%
If you would like to know more about these changes or their impact on your payroll, please feel free to contact us at info@rootz.tax.
August 2025