At the end of each calendar year, employers are required to give to each employee and the Inland Revenue Board (IRB) a statement (Form CP8A/EA) showing the total remuneration paid for the year and the amount of tax deductions made.

Although a schedule is provided by the IRB, the system uses a pre-determined formula that reflects the schedule.

• Category 1 (Single persons and married women)

• Category 2 (Married men with non-working wives)

• Category 3 (Married men with working wives and divorced women with dependants).

• For this purpose, dependant means:

• an unmarried dependant legitimate child, step-child or child adopted in accordance with any law and who is under 18 years of age

• if the child is more than 18 years of age, the child must be in full-time education
• a physically or mentally disabled child (for whom there is no age limit)

• Where an employee is a divorcee, a widow, or a widower, and pays for the maintenance of the children, Category 3 of the schedule applies.

• Where that employee has no children, Category 1 applies.

The processing steps for determining tax deductions are:

• All the earnings which are taxable are cumulated to form the the gross taxable amount.

• The net taxable amount is determined after deducting any of the folowing tax reliefs:

• Marriage allowance

• Spouse relief

• Wife rebate

• Single allowance

• Dependant allowance

• Self rebate

• The amount of deduction for tax is determined based on the Schedule of Monthly Tax Deductions provided by the IRB.

The result of this process is the amount of tax payable.