Samoa Payroll
When your company does business on a global scale, you must follow the laws and regulations of each country in which you operate. In Samoa, various standards affect how employers manage their payroll.
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When your company does business on a global scale, you must follow the laws and regulations of each country in which you operate. In Samoa, various standards affect how employers manage their payroll.
Taxation Rules
You must withhold a percentage of every employee’s salary for income tax. When you start hiring and operating in-country, you have to complete the Pay As You Earn (PAYE) registration form and submit it to the Samoa Inland Revenue Services.
Employees who make less than 15,000 USD (approximately 37,700 Samoan tālā) annually are exempt from these taxes. For yearly salaries between 15,001 USD and 25,000 USD, you must deduct 20 percent. Employees who earn over 25,001 USD each year are subject to a 27 percent tax.
You must file these taxes before the 15th of each month. Along with the proper form, you also need records of each employee’s total gross earnings and the tax percentage you withheld from their wages.
As an employer, you may receive a penalty if you:
- Submit taxes late.
- Fail to deduct percentages from your employees’ salaries.
Failure to comply with taxation rules can have other consequences, including fines and even imprisonment.
Entitlement and Termination
Each worker’s length of employment determines the compulsory notice period you must give before terminating their contract. The lengths of service and corresponding notice periods vary from no notice for less than three months of work to eight weeks for over 19 years of service.
You may terminate employment contracts effective immediately. If you do, though, you must pay severance. The terminated party is entitled to the wages they would have earned during the notice period plus any bonuses and allowances. Your employee may negotiate to include other terms in their employment contract as well.
Exceptions
Most part-time and seasonal employees are not eligible for severance pay. You also do not have to pay severance to employees fired with cause. Lawful terms for terminating a contract at will include:
- Theft, fraud, assault, destruction of property, and other misconduct.
- Breach of contract.
- Repeated defiance of workplace rules or management.
- Underperformance or failure to perform tasks as outlined in the contract.
- Fabrication of qualifications or necessary experience for a role.
- Absence without notice for at least three consecutive days.
Employees may terminate their service without notice if you facilitate abuse or harassment in any form. Under these circumstances, the former employee is entitled to all due wages and payments.
What Do You Need to Set Up Payroll in Samoa?
Before you can set up your company’s payroll, you must:
- Obtain a business license from the Ministry of Commerce, Industry, and Labor to get your Tax Identification Number (TIN).
- Register with the social security office as an employer and register all employees for their benefits.
- Submit your signed PAYE registration form to the Inland Revenue Services.
Samoa Payroll Options
Your company can manage payroll in a few ways:
- Internal: Your parent company’s finance department can handle your global workforce’s payroll. While this option is less expensive, penalties for oversight can be costly, and the added work puts a major burden on your in-house team.
- Subsidiary: If you set up a subsidiary, you can hire a separate finance department to oversee payroll. This option requires a significant investment of time and capital. Plus, the subsidiary is liable for mistakes.
- Samoa payroll processing company: You can also work with a payroll processing company. While this strategy reduces your administrative burden, it can be expensive. Hiring a reputable company is crucial since you retain legal responsibility.
- Globalization Partners: Globalization Partners is a comprehensive solution to managing global payroll. As an Employer of Record, our services ensure full compliance. We are also liable for any oversights, so you can focus on running your company.
Connect With Globalization Partners for Payroll Outsourcing Services
At Globalization Partners, we handle compliant, reliable payroll. Contact our team for more information or to request a proposal.