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NHT is the National Housing Trust Act, in this Tax guide we look at the National Housing Trust Act (NHT) and how it affects your tax
In 1979 the National Housing Trust Act was introduced and subsequently supported by Act 23 of 2005. Commonly referred to as NHT, the Act was developed to collect money from the workforce. The collections are known as NHT contributions and are payable by anyone working in Jamaica, whether a Jamaican citizen or simply living and working in Jamaica. Anyone earning the minimum wage or above, aged between 18 years old and the retirement age (65 for men and a rolling scale from 60-65 for women, see table for details) is liable for the payments. Pensioners can also contribute to the NHT by registering as a Voluntary Contributor.
The NHT Act description of a Self-Employed person is; someone gainfully occupied in Jamaica who, in relation to that occupation, is not employed by someone (other than himself/herself) or some company (that he/she does not own).
Self-Employed persons fall in one of the following 7 categories:
Categories 1 - 4, contribute 3% of income. Categories 5 - 7 contribute 2% of income.
The NHT Act description of an Employer is; 'any person who has in his/her employment a person who is required to make contributions pursuant to the Act (other than as a Voluntary Contributor)'.
Employers contribute 5% of their total wage bill to the NHT. (total gross pay of all employees who are liable to contribute for that month. 2% of which is the employee contribution).
The NHT Act description of an Employee is 'someone at/over the age of 18 and under the age of retirement, gainfully occupied in employment and not earning less than the minimum wage'.
You are considered an Employee if you are:
The NHT Act description of Voluntary Contributor is 'someone who (on application) has been granted a certificate authorizing him/her to make voluntary contributions'.
Pensioners can also register as a Voluntary Contributor, if they wish to contribute to the NHT.
Self-Employed must register with the NHT by completing a 'Declaration of Income Form/Self-Employed Questionnaire', signed by a Justice of Peace or Notary Public. If you have registered your business with The Companies Office of Jamaica, you will first need to take and complete an Employer's Registration Form (R1), available from the nearest National Insurance Scheme (NIS) Office. When the NIS office have processed this form you will get a National Insurance Reference Number. After collecting all of the documents that you need - (NIS) card, (TRN) card, One passport size photograph, evidence of your estimated earnings, such as financial statements or cashbook, valid (not expired)up to date Photo ID (e.g. Voter ID, Drivers License, Passport) make an appointment with the NHT for an interview. A Compliance Officer will then assess the information and advise you of your required monthly contributions, along with any remedial payments (back payments that you owe).
Employers are required to register their business by completing an "Employer's Registration Form (R1)", available from the National Insurance Scheme (NIS) Office. It should be returned to the NIS Office for processing, after which the NIS will assign a reference number to the business. Employers must also register with the Tax Registration Centre to obtain an Employer TRN.
Employees who are required to contribute to the NHT must have valid TRN and NIS numbers, recorded and stored by the Employer, with the record of the employee's total earnings and deductions made for Income Tax, National Insurance and NHT (NHT deductions should include the number of weeks for which deductions have been made). Records are required to complete Monthly or Annual Returns, so must be accurate, full and well maintained.
Voluntary Contributors are required to complete a 'Voluntary Contributors Questionnaire and Declaration of Income Form' (different for overseas Contributors and local Contributors). This must be signed, stamped and dated by a Justice of Peace or Notary Public. They must register with the Tax Registration Centre to obtain a TRN. After collecting all of the documents make an appointment with the local NHT office for an interview. You must submit:
Self-Employed Categories 1 - 4, contribute 3% of income. Categories 5 - 7 contribute 2% of income. (listed above)
Employers contribute 5% of their total wage bill to the NHT. (total gross pay of all employees who are liable to contribute for that month - 2% of which is the employee contribution)
Employers and Self-Employed are required to pay monthly contributions, due the 14th day of the following month (ie if you earn in January, contribution must be paid by 14th February). Payments can be made by credit card online. Alternatively, you can pay by credit/debit card, cheque or cash at any NHT Branch Office (not Service Centres), accompanied by a Deposit Voucher identifying any of the following that apply:
Voluntary Contributors are required to pay monthly contributions, due the 14th day of the following month (ie if you earn in January, contribution must be paid by 14th February). Payments can be made by credit card online. Alternatively, you can pay by credit/debit card, cheque or cash at any NHT Branch Office. The rate is 3% of earnings which commences upon registration. Contributors who are assessed for periods worked in Jamaica prior to going overseas are liable for the outstanding amount, but will not be charged interest on 'contribution principal arrears' (contributions due since registration, but not yet paid). Income, due contributions and payments should be declared in the currency in which it is earned. Overseas Contributors can have a representative make the payment, but they must possess a letter of authorization signed, stamped and dated by a Notary Public or Justice of the Peace
If an NHT Mortgagor, any contribution arrears payments will be deducted from mortgage payments as per the mortgage deed.
Employers use the Annual Return to account for the statutory contributions paid by Employer and Employees. It identifies contributing employees by name, NIS Number, TRN and states total contributions paid by each employee for that year. The Annual Return Form must be completed and submitted after the end of each calendar year with a deadline of 31st March. (ie The Annual Return for 2014 is due no later than March 31, 2015).
Self-employed with no 'contribution liable' employees, should submit a "Nil Annual Return". Accurate and full information must be provided, here is the official guidance on filling out the Annual Return.
Employers and Self-Employed are subject to a current penalty charge of 20% per year for late submissions.
In addition to the above, a surcharge of 10% will be payable on the penalty and any arrears.
Employers withholding information from the NHT regarding contributions or Annual Returns can be fined $30,000 or 3 times the amount of the unpaid contributions, whichever is the greater.
Failure to make contribution payments make it ineligible to apply for either housing benefit loans or contribution refunds, for that person.
Applicable for Employers, employees and Self-Employed, the Clearance Letter document is issued by the NHT to a business or individual, verifying status of contribution payments, Annual Returns and any arrears. It is a pre-requisite for obtaining a Tax Compliance Certificate (TCC) from the Inland Revenue
The TCC document is issued by the Inland Revenue as proof that payments of tax liabilities and wage-related statutory deductions are up-to-date. It may be needed for obtaining licenses, citizenship, work permits, security firm registration, tendering contracts and for importation.
Employers, Employees and Self-Employed can obtain a Clearance Letter by speaking with a Compliance Officer at the NHT