Employers must withhold income tax and social security contributions. Employers also must pay their share of social security contributions. These taxes are deductible by an employer for Argentine income tax purposes.
Employers must withhold federal income tax from wages paid to employees. Employers also must pay Fringe Benefits Tax and Payroll Tax where applicable.
Austrian wage tax is a withholding tax which has to be paid by the employer but is also partly borne by the employee. Along with this wage tax, the employer also has to pay social insurance contributions and other taxes. As a general, but very rough rule approximately 50% of the salary costs for an employee are taxes and social security contributions.
Employers must withhold federal income tax on the salaries paid to their employees. Employers must also pay social security contributions on such salaries. Such social security contributions are tax deductible in the hands of the employers.
Employers must withhold income tax and social security tax. Employers also must pay their share of social security tax, unemployment tax and other payroll charges in respect of compensation paid to employees. These social and payroll taxes are deductible by an employer for Brazilian corporate income tax purposes.
Employers must withhold federal income tax, Canada Pension Plan (CPP) (or Quebec Pension Plan (QPP)) contributions and Employment Insurance (EI) premiums. Employers must also pay the employer's portion of the CPP (or QPP) contribution and the employer's portion of the EI premium in respect of compensation paid to employees. These taxes are generally deductible by an employer for Canadian income tax purposes. Other withholding obligations and taxes may apply at the provincial level.
Employers must withhold Individual Income Tax when paying salaries and wages to employees. Contributions of mandatory social insurance and housing fund are deductible for Individual Income Tax purposes.
Employees in Colombia must be enrolled in the social security system (for pension, health and labor risks) and employers have the obligation to make the relevant monthly contributions.
If foreign employees are enrolled to a pension system abroad, they are not obligated to be enrolled or pay contributions to the Colombian pension system.
Social security contributions correspond to the following percentage over the employee's salary
Employers in Colombia must make contributions to SENA, ICBF and Family Compensation Fund, known as payroll taxes, that shall be calculated based on the ordinary monthly salary earned by the employee, including any vacation. In the case of employees earning integral salary, 70 percent of salary will be the basis for this contribution. Non-salary payments are excluded from payroll taxes. Payroll taxes do not have any cap.
For employees earning an ordinary salary lower than 10 MMLW, employers are exempted for making contributions to SENA, ICBF and to the healthcare system.
Finnish employers are liable to PAYE withholding obligations on salary paid to the Finnish employees. The tax base covers cash salary, benefits as valued by tax administration and share based employee benefits. The tax rate on salaries is progressive up to 57%.
In addition, Finnish employers are required to withhold the employee’s share of the social security contributions (some 7%) from the salaries. In addition, the Finnish employers are liable to pay their share of the social security payments (some 30%) based on their paid total salaries.
Employees and employers must pay contributions for health insurance, unemployment insurance and the national pension scheme. These contributions are deducted at source from salary payments. Starting from 2019, income tax will have to be withheld at source by employing companies.
Employers must withhold wage taxes (ie, withholding tax on income from employment) and 50% of the wage-related social security contributions for pension, health, nursing care and unemployment insurance.
Hong Kong, SAR
Regardless of whether the employees are residents in Hong Kong, employers are not required to withhold tax for employees. The only exception applies if the employee intends to leave Hong Kong for over 1 month following the cessation of employment; the employer is required to give IRD a notification of such impending departure and must temporarily withhold all payment due to the employee until IRD issues a "letter of release."
Employers are required to:
- Withhold 5% of their employees' relevant income (capped) as the employees' contributions, and
- Pay an additional 5% as their own contributions (capped), to the Mandatory Provident Fund (MPF) scheme
Currently, the maximum mandatory contributions for such MPF scheme is HK$ 1,500 (approximately US$200) for employees with a monthly relevant income exceeding HK$30,000 (approximately US$3,870). If the employee's monthly relevant income falls under HK$7,100 (approximately US$915), their monthly contributions to MPF are not required but the employer's contributions remain the same.
Employers must withhold income tax at the applicable rates. Employers must also withhold and pay social security tax in respect of compensation paid to employees. These taxes are deductible by an employer for Indian income tax purposes. Professional taxes may be payable in some states of India.
Under the pay as you earn or PAYE system, employers must deduct any income tax, PRSI (pay related social insurance) and USC (universal social charge) due each time a payment of wages, salary and other benefits in kind etc. is made to an employee. Employers also make a contribution to PRSI.
Income tax is levied at 20% and a higher threshold of 40% applies to income over a certain threshold (which depends on the marital status of the employee). The Universal Social Charge applies to employees taxed under the PAYE system at a rate of 0.5%, 2%, 4.5% or 8% of gross income depending on the level of income earned. Self-employed persons earning over €100,000 may be subject to the Universal Social Charge at a rate of up to 11%.
Employers must withhold income tax from employees' salary according to their individual tax rate, of up to 50%.
Employers must also withhold national insurance and health care tax at the aggregate rate of up to 19.6%. The burden of such taxes is divided between the employer and the employee and is subject to a cap.
Employers must withhold an advance payment of individual income tax on salaries paid to employees. Employers also must pay social security contributions in respect of compensation paid to employees. These taxes are deductible by an employer for IRES and for IRAP but only if related to open ended working relationship.
An employer must withhold certain amounts on salary payments to employees. Under the withholding tax system, an employee does not pay the income tax directly to the tax authority. Instead, the employer is required to withhold a certain amount of money and pay that amount to the tax authority on behalf of the employee. Most Japanese employees do not file a tax return because their income tax has already been paid by withholding from their salary income. It is possible to get a tax refund by filing a tax return if the amount of income withheld exceeds the income tax that should have been imposed. The tax return made by employees is relatively rare because employers frequently adjust withholding tax in the later months of the year to account for their employees’ deductible expenses.
Social security contributions apply to wages and salaries and are due from both the employer (rates approximately: 12/15%) and the employee (circa 12%). Contributions for both employers and employees are computed on a capped basis and must be withheld by the employer. Self-employed individuals must register for social security purposes and pay approximately the same rates as the combined rates for an employer and an employee.
Employees must be registered with the Mexican Institute of Social Security (ie Instituto Mexicano de Seguro Social, IMSS), as well as the National Housing Fund (ie Fondo Nacional para la Vivienda de los Trabajadores, INFONAVIT).
This is relevant becauseMexican employers are required to make contributions to the IMSS and INFONAVIT, based on the salaries of their employees. These contributions are subject to daily salary caps that are determined based on a multiple of the minimum daily salary in the area in which the work is performed.
In this regard, an employee must pay approximately 2.755% of his or her salary to the IMSS (payment to the IMSS includes all social security dues), while an employer must pay a total of 36.69% of the employee's salary. Contributions to INFONAVIT are approximately 5%, and contributions to a Mandatory Pension Plan are approximately 2% of employees compensation.
These contributions are subject to daily salary caps that are determined based on a multiple of the minimum daily salary in the area in which the work is performed.
The contribution percentages are generally applied to an employee’s total integrated salary. However, in some cases, the percentage is broken down and applied to only a portion of the salary. There are maximum contributions that are capped for high salaries.
In addition, most states impose a payroll tax of approximately 2% of a company's total payroll. There are no caps for the state payroll tax.
Mexican companies are required, under the Federal Constitution and labor laws, to make mandatory profit sharing payments to employees equal to 10% of the adjusted taxable income of the company. In general terms, the same overall rules are applied in determining the adjusted taxable income for profit sharing as for income tax purposes. Most significantly, profit sharing rules do not provide for inflationary adjustments or net operating loss carryforwards. Furthermore, exchange gains and losses are recognized as realized rather than an accrual basis. Mexican companies are not required to make profit sharing payments for the first year of existence.
The profit sharing is allowed as a deduction for income tax purposes. The deduction is allowed as a reduction of taxable income once certain calculations are made, not as one of the deductible expenses. However, since profit sharing is not a tax per se, it is not creditable for foreign tax credit purposes, representing a cost to most foreign investors.
Employers must withhold wage taxes and contributions for pension, health and unemployment insurance.
Under certain conditions, employers may provide incoming employees 30% of their wage tax-free. Incoming employees must be recruited or seconded from another country to work in the Netherlands, and have specific expertise with no or little availability in the Dutch employment market.
Employers are obliged to pay employer's contributions of the total salary. The rate is differentiated regionally, and ranges between 0% and 14.1%.
Employers are further obliged to make tax deductions from the salary payments made to the employees.
Employers must withhold personal income tax from the employees' gross remuneration. Employers also must pay social security contributions in respect of compensation paid to employees. These taxes are deductible by an employer for corporate income tax purposes.
Employers must withhold income tax and social security contributions.
Employers must withhold income tax, the social security contribution (pension contribution) and health fund contribution from the gross salary received by each employee. Salary tax incentives are applicable for the IT and R&D sectors. Employers also must pay a labor insurance contribution on top of the gross salary costs, which is deductible for Romanian corporate income tax purposes at the level of the employer.
Employers must withhold personal income tax from income earned by their employees and make mandatory social insurance contributions which are tax deductible expenses at the level of the paying entity.
An employer is required to file tax clearance for its foreign employees (ie, non-Singapore citizens including Singapore permanent residents) who:
- cease employment
- start an overseas posting or
- leave Singapore for more than 3 months
In particular, the employer must file the relevant form at least one month before the last date of employment, or the departure date, to report the employee's taxable remuneration. The employer must also withhold all monies due to the employee for 30 days unless otherwise notified by the IRAS.
Employers are required to deduct PAYE on all remuneration paid to employees, including directors, unless a tax deduction directive is issued by SARS. Fringe benefits are included in remuneration.
Employers may also be required to deduct and pay unemployment fund contributions and skills development levies.
Employers must withhold wage income tax. Employers also must pay 4 compulsory social insurances which are pension, health, unemployment and industrial accident in respect of compensation paid to employees. These taxes are deductible by an employer for corporate income tax purposes.
Employers must withhold income tax. Employers also must pay social security contributions. Social security contributions are deductible by the employer for Spanish income tax purposes.
Employers are obliged to pay employer’s contributions at a rate of 31.42% of the total salary. Employers are also obliged to make tax deductions from the salary payments made to the employees.
All B-permit holders and foreign employees with no residence in Switzerland are taxed at source and the employers must withhold the income tax. All other individuals have to fill in a tax return and are subject to tax on their worldwide income if they have their permanent or temporary residence in Switzerland.
An employer must withhold income tax from its payment of salaries to its employees. Also, an employer is required to make partial payments of premiums for national health insurance for its employees, which include regular premium plus supplementary premium based on salaries and other payments to the employees.
Employers are obliged to withhold income tax at progressive income tax rates on salaries. The applicable rate is applied between 15% to 35%.
The general rate for the employers' social security contribution is 20.5% while the social security contribution rate applicable for the employees is 14%. Employers and employees are also subject to unemployment benefit plan contributions based on the gross salary. Applicable rates for such contribution are 2% for employers and 1% for employees.
Employers act as tax agents in relation to their employees and pay the following taxes:
- 18% of personal income tax is withheld from paid income
- 1.5% of military duty is withheld from paid income
- 22% of unified social contribution is paid on top of income at the cost of employer (subject to minimum and maximum caps)
United Arab Emirates
Social security is only applicable to UAE and other GCC nationals (UAE and GCC passport holders).
End of service benefits
According to the UAE labor law, all employees who complete a period of continuous service that is longer than one year are entitled to a gratuity computed and accrued by employers according to either Emirate or Free Zone specific regulations.
Employers must withhold income tax (ie, pay as you earn or PAYE) and a social security tax (ie, primary national insurance contributions). Employers must also pay secondary national insurance contributions. Secondary contributions are deductible by an employer for UK corporation tax purposes, but it is not generally permitted to recover them from the employee. There are no withholding obligations at a local level in the UK.
Employers must withhold federal income tax. Employers also must pay social security tax, unemployment tax and Medicare tax in respect of compensation paid to employees. These taxes are deductible by an employer for US income tax purposes. Other withholding obligations and taxes may apply at the state or local level.
Employers are obliged to withhold employment tax from their employees' income according to a tax table of graduated tax rates. The tax is known as Pay – As – You – Earn (PAYE). The tax rate ranges from 0 to 45 percent depending on employment income earned by the individual.
In addition to PAYE, employers are also obliged to withhold a three percent AIDS levy from their employees' employment income.