"Revenue from the community
for the community"
PAYE

PAYE (Pay As You Earn) refers to the tax withheld from employment income.

It is the obligation of the employer to withhold PAYE (if any) and remit to the Ministry’s office. Payment must be accompanied by the appropriate form which is Form 7. As an employer you must make the correct PAYE deductions from your employees' earnings including any benefits you provide, meet your filing and payment obligations with regard to PAYE.

If you do not lodge proper PAYE returns and pay tax due (if any), any salary and wage claim in your income tax return will not be allowed.

Rates

Annual Salary/Wage

Tax Rate

$0 - $7,400

Nil

$7,401 - $30,000

10%

$30,001 and over

20%

 

 

Schedule of Deduction

DAILY WAGE

WEEKLY SALARY

TWO WEEKLY SALARY (26 PAYS)

HALF MONTHLY SALARY (24 PAYS)

MONTHLY SALARY

Amount

Tax

Amount

Tax

Amount

Tax

Amount

Tax

Amount

Tax

$1 to

$20

Nil

$1 to $142

NIL

$1 to

$284

NIL

$1 to

$308

NIL

$1 to

$617

NIL

$21

$0.07

$143

$0.07

$285

$0.04

$309

$0.07

$618

$0.13

$21 to

$82

 

$0.07 plus for each $ above $21 add $0.10

$143 to $577

$0.07 plus for each $1

above $143 add $0.10

$285 to $1154

$0.04 plus for each $1

above $285 add $0.10

$309 to $1250

$0.07 plus for each $1

above $309 add $0.10

$618 to $2500

$0.13 plus for each $1

above $618 add $0.10

$82 and above

 

$6.17 plus for each $ above $82 add $0.20

$577 and above

$43.47 plus for each $ above $577 add $0.20

$1154 and above

$86.94 plus for each $1 above $1154 add $0.20

$1250 and above

$94.17 plus for each $1 above $1250 add $0.20

$2500 and above

 

$188.33 plus for each $1above $2500 add $0.20

For employers we have a PAYE worksheet to work out your employees’ rate of tax.

 

Forms

As an employer are obliged to complete certain PAYE related forms.

  • Monthly Tax Withholding Returns (PAYE form)

 

You must complete Form 7 and lodge it to the Ministry office. This form should list all your employees and their gross wage details for the relevant month and PAYE (if any).

  • Withholding Tax Certificate

 

Within 14 days after the end of the financial year, you must provide each of your employees with a tax withholding certificate which is Form 4. This form should show the gross salary or wage earned by the employee in the year less the amount of tax deducted.

  • Annual Tax Withholding Reconciliation (PAYE reconciliation)

 

This is the reconciliation of all the monthly PAYE returns lodged during the financial year which is lodged using Form 8. A complete PAYE reconciliation must have the form 8 together with a copy of the Form 4 of each employee you have. If you have 10 employees, you must lodge one Form 8 and ten Form 4s (one for each of your 10 employees).

Improving the lives of Tongans through effective & efficient tax & customs administration