As your employer, IC calculates and withholds income tax from your salary on a monthly basis. Calculations are based on tables issued by the Income Tax Department. These tables take into account your marital status and your gross pay:
- Add together all your earnings except the transportation allowance.
- Select the appropriate rebate, from table I below, according to your family status.
- Deduct the family rebate from your gross earnings to obtain the taxable salary.
- Use Table II, below, to split your taxable salary across earning brackets.
- In each salary range, multiply the tax percentage by the corresponding taxable portion of the salary to get the bracket tax.
- Add up all the bracket taxes and you obtain your monthly income tax.
If you're working for more than one employer, each employer has to withhold income tax from your salary. However, it's your responsibility every year to declare your total revenues to the Income Tax Department.
Male instructor, married with 2 children, wife employed
According to Table I and Table II:
- The rebate is 8,500,000.
- The taxable income is: 23,400,000 – 8,500,000 = 17,900,000.
- 2% on first 6,000,000 = 120,000.
- The next taxable portion is: 17,900,000 - 6,000,000 = 11,900,000.
- 4% on next 9,000,000 = 360,000.
- The next taxable portion is: 11,900,000 - 9,000,000 = 2,900,000.
- 7% on next 2,900,000 = 203,000.
- The yearly income tax is then 120,000 + 360,000 + 203,000 = 683,000.
- The monthly income tax is then 683,000 / 12 = 57,000.
The College is required to withhold monthly contributions from employees’ salaries as instructed in the Income Tax law. However, if you have a second employment outside IC, it is your responsibility to declare your total annual revenues for the previous year to the Ministry of Finance, Income Tax Department, before May 1st.
The College withholds teachers' tax from your salary on a monthly basis and matches your contributions to the Teachers' Caisse.
Social Security tax is 2%, of your monthly salary, up to 50,000 L.L. The College withholds the tax from your salary and pays it to Social Security.