PAYE (Barbados), in plain English.

The Barbados Revenue Authority does not send a year-end bill. PAYE means the tax is already gone, deducted at source each cycle before the employee sees what landed. That is the design. The calculation, the band split, the monthly remittance: all of it is the employer's obligation to get right.

What PAYE is.

Pay As You Earn is Barbados's employer-operated income tax withholding regime, administered by the Barbados Revenue Authority (BRA). Two marginal bands apply to taxable income. The first covers income between BBD 25,001 and BBD 75,000, taxed at 11.5 percent. Everything above BBD 75,000 is taxed at 27.5 percent.

Both rates are marginal, not flat. An employee earning BBD 100,000 does not owe 27.5 percent on the full amount. Only the portion above BBD 75,000 hits that rate. The slice between BBD 25,001 and BBD 75,000 stays at 11.5 percent regardless of what the employee earns above it.

Employers withhold at source. Monthly remittance goes to the BRA.

A worked calculation.

Take an employee with BBD 100,000 in annual taxable income.

The first band covers BBD 50,000 of that figure, from BBD 25,001 to BBD 75,000. At 11.5 percent, the tax on that slice is BBD 5,750. The second band covers the remaining BBD 25,000 above the BBD 75,000 threshold. At 27.5 percent, that adds BBD 6,875. Total annual PAYE: BBD 12,625. Spread across 12 pay cycles, the employer withholds approximately BBD 1,052 per month and remits that amount to the Barbados Revenue Authority.

Getting the split right is the whole task. The arithmetic is not the problem. Running it without a slip, for every employee, every cycle, is where manual processes tend to diverge from the actual figure.

Filing and remittance.

PAYE in Barbados is a monthly obligation. Employers calculate withholding for each employee in the pay period, total it across the workforce, and remit to the BRA on a monthly cycle. There is no annual lump sum that replaces monthly payments. Each period stands on its own.

Where audits find errors.

• Applying a flat rate instead of splitting the bands. An employee above BBD 75,000 does not pay 27.5 percent on everything. Missing the band split results in over-deduction at lower earnings or under-deduction at higher ones.
• Misreading which income counts toward the BBD 25,001 threshold. The bands apply to taxable income, not gross pay. How allowances and pay components are classified affects where an employee lands in the bands.
• Missing the monthly cycle. PAYE remittance in Barbados is monthly. Not quarterly, not annual. Late remittance is a compliance failure with the Barbados Revenue Authority, not a rounding error to clean up next year.

How Workzoom handles it.

Workzoom Payroll for Barbados is built to handle PAYE in the correct deduction order, applying the 11.5 percent band to income between BBD 25,001 and BBD 75,000, and the 27.5 percent rate to income above that threshold. The engine calculates the withholding for each employee. The employer reviews the run, approves the figures, and remits to the Barbados Revenue Authority through their usual channel. Workzoom does not remit on anyone's behalf.

Workzoom builds Caribbean payroll natively, local statutory rules encoded directly into the engine rather than retrofitted onto a system designed for another market; contact us about Barbados payroll and your timelines.