Earnings Schedules and Contributions
Earnings Schedules and Contributions
EARNING SCHEDULES AND CONTRIBUTIONS CONTENT
Submission of Earnings Schedules and Payment of Contributions
Record Keeping and Payment
Every employer is required to maintain a wages book or other record of wages paid to employees. At the end of the month, the employer should total the earnings and contributions for the month and make a single payment. This in turn will cover both employer and employee contributions for all the employees. The payment should be made within 15 days after the end of the month. Employers must record particulars of earnings and contributions on the form provided. When the 15th of the month falls on the weekend, the payment must be made on the following business day, failing which interest will be charged.
Submission of Earnings
The use of National Insurance contribution cards was discontinued and there was a change in the method of the collection of National Insurance contributions.
Employers can submit the Contributions Schedules to the National Insurance Office either electronically or manually.
When submitting the contribution schedules manually, employers must use the Contribution Certificate (DP.10 Form). It should be noted that there are separate forms for months with four (4)and five (5) Mondays.
Employers desirous of submitting a computerised listing should seek clearance from the National Insurance Office on the format required before submitting the same. Only one (1) copy of a listing is required per month.
Employers should ensure that the correct national insurance number of each employee is recorded on the contributions schedule or computerised listing. Non-inclusion of the national insurance number or use of the incorrect national insurance number creates many problems for the National Insurance Office since the earnings cannot be recorded to the employee’s account.
It is important that employers include the relevant code in the space provided for the “type” on the Contribution Schedule.
The relevant codes are as follows:
Employees (between 16 and pensionable age)
Employees (under 16 and above pensionable age)
Employees (apprenticed according to legislation)
Employees (not eligible for benefits)
Foreign Embassies & International Organisations
Employees (between 16 and pensionable age)
Employees (under 16 and above pensionable age)
Employees (not eligible for benefits)
With respect to submission of employees’ earnings to the National Insurance Office, employers must round these earnings to the nearest dollar. Contributions and the Training Levy should not be rounded but must be calculated on the rounded earnings.
Earnings and the associated contributions should normally be shown in the month/months to which they relate. For example, holiday earnings paid in February, for holiday taken in March, must be shown as earnings in March.
However, given the impracticability of doing the same with back pay, production and other bonuses – which might cover a long period in the past – should spread over the month in which the payment is made.
The following is important when dealing with bonus/productivity payments:
- In respect of monthly paid persons, the payment should be added to the normal salary paid in that month and contributions paid on the combined total up to the maximum insurable earnings limit as specified in the Schedule to the National Insurance and Social Security (Collection of Contributions) Regulations.
- For weekly paid employees, the payment should be spread across the number of contribution weeks in the month in which the payment is made up to the maximum specified in the Schedule to the National Insurance and Social Security (Collection of Contributions) Regulations.
Example: For December 2017, for a worker receiving $250 per week and a bonus of $400. Weekly contributions to be calculated on the following:
No. of Mondays in December 2017 = 4
Weekly insurable earnings = $250 + (400/4) = $250 + 100 = $350
The employer or a person authorised by him, must sign the declaration and return both copies (original and duplicate) of each schedule to the National Insurance Office, not later than the 15th day of the month following that to which it relates. The employer should retain the triplicate (white copy) for their records since a copy of the schedule will NOT be returned to the employer. Copies of the Contribution Schedule together with guidelines for their completion can be obtained from the National Insurance Office.
The Schedule should be completed and returned even though contributions may not have been paid for the employees. Payment of contributions may be made in person at the National Insurance Office, Frank Walcott Building, “Flodden”, Culloden Road, St Michael between 8.30 a.m. and 3.30 p.m., Monday through Friday or may be sent by mail. All payments by mail should be made by crossed cheque and payable to Director, National Insurance. No cash should be sent in the mail or deposited in the drop box. Failure to pay contributions at the proper time will result in interest being charged.
The normal contribution year of the Scheme runs from January to December. Every employer should permit a person employed by him/her, to be shown evidence that contributions were paid on that person’s behalf. In addition, if an insured person wishes to see the Contribution Schedule applicable to him, the employer must not more than once a quarter give him reasonable opportunity to do so.
Failure to pay contributions at the proper time will result in interest being assessed against the employer and may also lead to prosecution.
Reporting of Insurable Earnings
Reporting of insurable earnings must be completed on the Contributions Schedule for ALL EMPLOYEES.
As a rule, all changes to earnings must be made on the Contributions Schedule. Changes in respect of Computerised Reports must be accompanied by a note to the Director, National Insurance Office requesting the same.
Kindly note that separate schedules must be used for each reporting period. Also, each schedule must be completed with the Employer’s name and address, registration number.
Requirements for submission of computerised insurable earnings reports by organizations classified as private sector employers:
- All employers desirous of submitting computerised earnings reports must complete fully an application form in duplicate. Both copies of the form must be returned to the Director, National Insurance Office, along with a specimen copy of the computerised report. The application forms are obtainable from the National Insurance Office or the website (www.nis.gov.bb). On receipt and processing of the application by the National Insurance Office, the employer will be notified by letter whether or not approval has been granted. Employers who have been granted approval must adhere to the required standards for all future submissions.
- Earnings reports must be original and legible. Photocopies, carbon copies or hand-written changes will not be accepted.
- The employer’s name and National Insurance Registration number MUST be printed in the designated spaces at the top of each page.
- All pages of the report are to be numbered in sequence in the area provided for page number.
- The national insurance number or the national registration number of each employee must be printed in the columns provided for them. The national registration number must be provided when the national insurance number is unknown.
- The column headed ‘Earnings Type’ must contain the Letter ‘E’ for Employment Injury contributors (employees under 16 or over pensionable age), or ‘R’ for Regular contributors.
- Employees who have no earnings for the period being reported must not appear on the report (i.e. if the total earning = 0).
- For weekly paid employees, the earnings for each week are to be rounded to the nearest dollar and reported in the appropriate week. The total earnings column for weekly employees must be the sum of the individual weeks’ earnings. Where a weekly employee has no earnings in a particular week, this must be represented with a zero (0).
- The maximum insurable earnings for any week must not exceed the weekly maximum stipulated in the Schedule to the National Insurance and Social Security (Collection of Contributions) Regulations.
- The number of weeks in the month for which earnings are being reported must correspond to the number of Mondays in that month. This is standard regardless of the employer’s payment week or period. Employers are required to adjust their reporting to conform to what is the legal requirement of the NIS.
- For monthly paid employees, the weekly columns are to remain blank and the insurable earnings for the month reported in the total column. The earnings are to be rounded to the nearest dollar.
- The maximum insurable earnings for monthly-paid employees must not exceed the maximum stipulated in the Schedule to the National Insurance and Social Security (Collection of Contributions) Regulations.
- Employees earnings must be reported either monthly or weekly. Reports containing FORTNIGHTLY earnings are not acceptable. Salaried employees are paid for 2-week periods; the earnings must be reported as earnings in the individual weeks of the paid period.
- Earnings must be reported for the period in which they are earned, except where arrears and bonus payments are made.
- Arrears of pay and bonus payments must be reported in the month of actual payment. In the case of weekly paid employees, such payments must be spread over the weeks of the month in which payment is made, and added to the payments for each week. Contributions are payable on the maximum for the week stipulated in the Schedule to the National Insurance and Social Security (Collection of Contributions) Regulations. For monthly paid employees, such payments must be added to the salary for the month in which payment is made. Contributions are payable on the monthly maximum stipulated in the Schedule to the National Insurance and Social Security (Collection of Contributions) Regulations.
- Holiday pay paid in advance, or payment in lieu of notice, must be reported and spread over the period for which the payment is made. Should such payments extend into more than one month, they must be reported on the reports for individual months. Where the employer terminates employment of an employee, holiday pay should be shown in the period prior to the termination date unless termination is to take effect on the date after notice of termination is given.
- The Insurable Earnings for weekly and monthly staff can be included in the same report for a given month. There is no need to submit separate reports for weekly and monthly staff.
- The Employee and Employer contributions are to be listed in the columns provided. They are to be used as a reference, to ensure that the correct deductions are being made.
- The cumulative insurable earnings and cumulative number of employees must be stated at the bottom of each page.
- The summary of all earnings reported and the contributions payable must be listed on a separate page in the format given on the specimen – See Appendix VII.
- All reports must be submitted on 11” x 15” computer paper. Double spacing between printed lines must be used. Vertical printing must be six (6) lines per inch, and horizontal printing must be ten (10) characters per inch.
- Reports must be aligned in such a manner that the perforation for page separation falls between the printed pages.
- Reports that are submitted without complete information will not be accepted unless they are accompanied with written explanations.
- Failure to comply with these requirements will result in the withdrawal of the permission granted to submit computerised reports. Such withdrawal will be communicated in writing. Employers will therefore be required to complete and submit manual Contribution Schedules.
Additional Conditions Relating to Payment of Contributions
Under the National Insurance legislation the employer is entitled to recover the employee’s share of the contribution by deduction from his wages for the period for which the contribution is payable. If the employer fails to make these deductions at the time the wages are paid, he is still liable for the entire contribution and has no right at a later date to deduct the employee’s share of the contribution for any earlier period.
Where wages are paid in kind only, the employer himself is liable to meet the full contribution and is not entitled to recover any part from the employee.
Any employer who deducts or recovers or attempts to recover the employer’s share of the contribution from the employee is guilty of an offence under the Act.
A contribution is payable for the week in which the employee reaches age 16, and the contribution should take account of the total insurable earnings payable in respect of that week.
A contribution is payable for the whole contribution week in which an insured person reaches pensionable age. However, if the insured person reaches pensionable age on a Monday, no contribution is payable for that week.
The employer should pay contributions for the period during which an employee is on holiday and receiving remuneration of $21 or more, whether such remuneration is paid before, during or after the holiday.
A contribution is not payable for any week in which the employee receives sickness or maternity benefits for that entire week. Where an employee is absent from work on account of illness or for maternity purposes and is not entitled under the scheme to sickness or maternity benefits, as the case may be, but continues to receive salary, the employer should continue to pay contributions in the normal way.
No contribution is payable by an employer for any contribution week in which the insured person does not work and either receives no pay or is paid less than $21 per week or $91 per month.
If an employee is employed by an employer (known as the immediate employer) but is actually working under the direct control and supervision of another person (known as the principal employer), the principal employer is deemed to be the employer liable to pay contributions. The employer who actually pays the wages should ensure that the employee’s share of the contribution is deducted from the wages. Settlement between the “immediate” and “principal” employers may then take place.
Refund of Contributions
A refund of contributions is payable to employees and / or employers who have overpaid contributions. Over-payment can result, for example:
- When contributions have been paid at a rate other than that at which they should have been.
- Where contributions have been paid for an insured person during the period when that person is receiving benefits. In this case, both the employer and employee are refunded, but the person must have received benefits for a full week from Monday to Saturday to qualify for a refund.
- When a contribution has been paid under the erroneous belief that it was payable.
Types of Refunds
Overlapping Refund: This occurs when an employee is paid a sickness, maternity or employment injury benefit for a National Insurance week, which runs from Monday to Saturday and the employer has submitted the contributions on their behalf. The refund is payable to both employee and employer.
Over Pensionable Refund: This occurs when a person reaches pensionable age and their contributions are submitted at the incorrect rate. Both the employer and the employee will be refunded.
Excess Refund: This is when an employee works for more than one employer and has paid contributions on earnings that exceed the maximum earnings ceiling, which is subject to change. The maximum earnings ceiling is $1,126 weekly and $4,880 monthly (as of 1st January 2020). Only the employee gets a refund.
Temporary-Permanent (T-P) Refund: This occurs when a temporary (T) government employee has been appointed as a permanent (P) employee, but the employer reports their contributions at the incorrect rate of ‘T’. The employee is paid a refund from the month after the effective date of appointment to the point where earnings change to ‘P’. The refund request application letter, along with the appointment letter and confirmation letter/medical confirmation form must be submitted two (2) years from the end of the contribution year from the date on the confirmation letter. E.g., the date on the confirmation letter was May 2015; the latest date for the submission would be at the end of 2017. Both the employee and employer will be refunded.
Overdrawn Refund: This occurs when the employer overpays the employee. As a result, the employer pays too much contributions. To facilitate the process, amended schedules from the employers must be submitted to show the corrected salary or changes can be made via the NIS Online Portal. In addition, a letter should be sent to the Director, National
Insurance Office advising of the change.
Employer Error Refund: This occurs when the employer reports incorrect earnings and pay incorrect contributions on behalf of their employees.
Working for More Than One Employer
In cases where an employee works for more than one employer, each employer must pay contributions for the employee. If, in such cases, the total of the employee’s share of the contributions for a pay period exceeds the maximum employee contributions payable for the period, the employee may apply to the National Insurance Office for a refund of the excess contributions paid. There will be no refund of the employers’ share of the contributions in this instance.
Deadline for the Application of Refunds
Refund applications with the exception of the Excess refund should be submitted:
- If the contribution was paid at the due date, within two years from the end of the contribution year in which that contribution was paid; or
- If the contribution was paid at a later date than the due date, within 2 years from the end of the contribution year in which the payment was due or within 12 months from the date of actual payment of the contribution , whichever period ends later.
The Excess refund must be submitted one year from the end of the contribution year during which the contribution was made. A contribution year runs from January to December.
The Refund Request Application Letter
Applications for a refund of contributions should be made in writing to the Director, National Insurance Office and should contain the following information:
- Name and address of the insured person
- National insurance number of the insured person
- Name and address of the employer
- Registration number of the employer
- The period for which the refund is being requested
- Reason for the refund