When you start expanding your company beyond your country’s borders, you need to think about how you’ll manage payroll. While this practice is vital to your company’s compliance, your employees will also expect their paychecks on time. When you work with Globalization Partners, your payroll management becomes our responsibility.
Taxation Rules in Fiji
As an employer, you are responsible for deducting income taxes from employee paychecks. Income tax percentages depend on the amount of money individuals make per year. Anything lower than FJ$30,000 doesn’t include any income tax. FJ$30,000 to FJ$50,000 is at an 18% tax bracket, but income tax can get as high as 20%.
Additional amounts get added to these payments as an individual makes more money. For example, at the FJ$270,000 to FJ$300,000 level, individuals start paying the Environment and Climate Adaptation Levy (ECAL) and Social Responsibility Tax (SRT). These taxes start at 10% and 13%, respectively. SRT can get as high as 19%.
Fiji Payroll Options for Companies
You can handle payroll in various ways. The method you choose is based on how many resources you have as a company and how much risk you’re willing to take. Your options include:
- Internal: If you have a subsidiary in the country and enough funds to hire a payroll department, you can manage payroll on your own. This setup is a realistic option for companies with financial resources, but it’s not the right choice for everyone, especially since it comes with liability concerns.
- Payroll processing company: Sometimes, businesses with subsidiaries will work with a separate payroll processing company in-country. However, if this processing company misses a regulation or law, the liability falls on your entity.
- Remote: Establishing a subsidiary can be a lengthy process. If you’re not interested in handling this complex process, you can manage your payroll from your home country. If you choose to process salaries in one place, you’ll need to follow separate regulations abroad to stay compliant.
- Global PEO: With Globalization Partners, we hire your employees under our subsidiary. Our payroll outsourcing services in Fiji mean we’re responsible for regulating payroll, and all liability falls on us.
How to Set Up a Payroll in Fiji
When you decide on your payroll handling method, you need to think about the system you’ll use to run it. If you establish a subsidiary within the country, you must go through a range of government clearances to gain that status. You’ll also need to register with the Revenue and Customs Service and open a bank account to manage all your company’s finances.
Whether you set up a subsidiary or manage the expansion from your home base, you’ll need to track employee information such as bank account details, pension and insurance requirements, and the necessary tax codes. If you’re managing payroll remotely, keeping these regulations separate from your country’s laws will help you stay compliant.
You should record all termination and entitlement terms in the employment contract. Upon termination, employees must receive at least 5/6 of their pay for every month they worked. If an employee has provided service for a year or longer, they should also receive payment for all unused vacation days.
These vacation day payments cannot be counted as part of the employee’s wages if any party provides notice for termination. If an employee leaves without warning, the employer can include these vacation days within the portion of wages as severance.
Payroll Processing Company in Fiji
As an international company, you have several options for managing your payroll. Working with Globalization Partners is the best way to mitigate risk and leave involved payroll planning to the experts. Contact us today to learn about our payroll outsourcing and other global PEO services.