Payroll Glossary

This glossary explains the payroll-related acronyms and key terms used in the JM Salary Calculator, based on Jamaican statutory deductions and common payslip terminology.

• Allowances – Additional payments to employees for specific purposes (e.g., travel, meals, housing). These may be taxable depending on the allowance type.
• Annual – A yearly calculation period, usually January to December.
• Basic Salary – The fixed amount paid to an employee before allowances, bonuses, or deductions.
• Bonus – Extra pay given to employees, which may be taxable depending on its nature and how it is classified.
• EDTAX (Education Tax) – A 2.25% tax applied to gross salary (minus NIS and, if applicable, pension contributions).
• Emoluments – All forms of compensation, including salary, allowances, bonuses, and benefits in cash or kind, before deductions.
• Fortnightly – A pay period covering 14 consecutive days (two weeks).
• Gross Salary – The total earnings before any deductions such as taxes or insurance.
• Monthly – A pay period covering one calendar month.
• Net Pay – The amount an employee takes home after all deductions have been made from gross salary.
• NHT (National Housing Trust) – A statutory deduction at 2% of gross salary, used to fund housing projects in Jamaica.
• NIS (National Insurance Scheme) – A social security program funded by a 6% combined contribution (3% employee + 3% employer), capped at an annual insurable wage of $5,000,000.
• Overtime – Additional pay for hours worked beyond the normal work period, often calculated at a higher rate than regular hours.
• PAYE (Pay As You Earn) – The income tax deducted from an employee's salary based on Jamaican tax thresholds and rates.
• Payroll Period – The recurring schedule on which employees are paid (weekly, fortnightly, monthly, etc.).
• Pension – A retirement savings contribution deducted from salary, which can affect the calculation of other taxes.
• Self-Employed – Individuals who work for themselves and are responsible for paying their own statutory deductions.
• Statutory Deductions – Mandatory payroll deductions required by law, including PAYE, NIS, NHT, and Education Tax.
• TAJ (Tax Administration Jamaica) – The government agency responsible for administering and collecting taxes in Jamaica.
• Taxable Income – The portion of income on which PAYE and other taxes are calculated after allowable deductions.
• Threshold – The income amount below which no PAYE tax is charged. In Jamaica, this is currently $1,799,376 per year.
• Weekly – A pay period covering 7 consecutive days.