Payroll Tax

If you have employees you must withhold and pay wage tax and premiums AOV/AWW, AVBZ and Health Insurance premiums.

Who has to pay wage tax and premiums AOV/AWW, AVBZ?
The wage tax and premiums AOV/AWW, AVBZ must be calculated and paid by you as employer (the withholding agent). You pay the wage tax and AVBZ to the tax authorities. The wage tax and AOV/AWW, AVBZ are levied by withholding from the wage. The withholding takes place the moment wages are paid to the employee.

When are you subject to withholding of wage tax and premiums?
As employer, you are obliged to withhold the wage tax and the premiums AOV/AWW, AVBZ from the employee’s wages.

Who is an employee?
An employee is the person who is employed by you – the so-called present employment. An employee is also considered to be a person who receives income from a previous employment of him/herself or another. This therefore includes both the pensioner or the widow and children of the former worker who is in receipt of a pension or other benefit.

What is salary/wage?
Wages come in two forms: wages in money and wages in kind. The best-known form of wage is the wage in money. For example the monthly salary you receive from your employer, bonuses or holiday allowance. Wages that are not received in money are part of the wages in kind, such as a free lunch at work, a holiday trip, a company car, a free service home. Wages are therefore all that is enjoyed from employment.

When do you have to file and pay wage tax and premiums AOV/AWW, AVBZ?
The declaration of wage tax and premiums AOV/AWW, AVBZ must be made on paper via the counter of the Tax Administration or via the online Portal (onlineservices.sintmaartengov.org). The wage tax return and premiums AOV/AWW, AVBZ must be submitted every month. Both the declaration and the payment must be made within 15 days of the end of each month. If the 15th of the month falls on a public holiday, on weekends or on another day off, the declaration and payment may be made no later than the first working day after the 15th.

What are the consequences for not submitting the wage tax return and premiums AOV/AWW, AVBZ or not submitting it on time?
If the employer has not paid the payroll tax or has not paid it on time, the Inspector shall impose an additional assessment with, in the event of a:

  • First omission: a fine of 5% of the amount of the additional tax assessment with a minimum of ANG. 50,- and a maximum of ANG. 2.500.
  • Second omission: a fine of 10% of the amount of the additional tax assessment with a minimum of ANG. 100,- and a maximum of ANG. 5.000.
  • Third or more omission(s): a fine of 15% of the amount of the additional tax assessment with a minimum of ANG. 150 and a maximum of ANG. 10.000.

If the employer has not or(entirely) paid the wage tax due  on the return, because too little has been declared, a default penalty of 15% of the amount of the additional tax assessment with a minimum of ANG. 25,- and a maximum of ANG. 10.000 will be imposed.

Reduction of payroll tax
The payroll tax is an advance levy on income tax. Wage tax is deducted from your salary, benefit or pension. The employer or benefit agency only takes basic discounts and basic allowances and a fixed amount for professional expenses, any contributions to a pension scheme, and the employee share of contributions   into account. After the end of the calendar year, the final settlement of the wage tax takes place with the income tax assessment. This assessment is imposed after the income tax return has been filed.

Important forms
For wage tax and premiums AOV/AWW, and AVBZ, the following forms are important for the tax authorities:

Declaration form
The declaration form contains the wage tax and premiums AOV/AWW, AVBZ that the withholding agent must, withhold, file and pay to the Tax Administration every month.

The submission of the wage tax return and premiums AOV/AWW, AVBZ  takes place at the counter of the Tax Administration or via the online Portal. This requires a user account.

Summary wage statements
A summary wage statement is an overview of the annual wage data per employee. This must be submitted to the Tax Administration annually in the month of January.

Expat arrangement

For expats, working on Sint Maarten, the payroll tax may be calculated on the basis of net rather than gross salary.

Certain conditions apply:

  • You haven’t lived on Sint Maarten for the past 5 years. 
  • You bring specific expertise that is not available on Sint Maarten. Your specific expertise is at scientific or HBO level and you have  a minimum 3 years of work experience, or you have 5 years of relevant work experience on a scientific of HBO level and you earn a minimum of ANG. 100.000 per year.
  • You have to request the application of the expat status from the Tax Inspector together with your employer.