Marshall Islands: Personal Taxation

Marshall Islands Income Tax

There is no Marshall Islands personal income tax for employees, directors and/or shareholders of non-resident domestic companies.

Personal income taxes are applicable to all persons employed in the Republic of the Marshall Islands , the tax rates being 8% for the first US$10,400 and 12% thereafter.

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Marshall Islands Wages And Salaries Tax

There is no Marshall Islands wages and salaries tax liability for non-resident domestic companies or their employees

With respect to resident companies' employees, businesses are required to withhold and pay to the National Government a tax imposed on the employee's wages and salaries.

The wages and salaries tax, as previously mentioned, is 8% per annum on the first US$10,400 of taxable income earned by the employee, and 12% thereafter.

Employees whose gross annual wages and salaries are $5,200 or less are allowed an exemption of US$1,040 per year (or US$20 per week).

The tax is payable every four weeks.

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Marshall Islands Social Security Taxes

There is no Marshall Islands social security tax liability for non-resident domestic companies or their employees.

With respect to employees of resident companies, businesses are also required to make quarterly social security contributions on "covered earnings", defined as the compensation paid to employees up to US$5,000 per quarter.

From the employee's wages, the employer is to withhold and pay to the Social Security Administration 7% of covered earnings.

From the employer's revenues, the employer is to contribute to the Social Security Administration for the benefit of the employee another 7% of covered earnings.

Businesses are required to make quarterly health insurance contributions on covered earnings. From the employee's wages, the employer is to withhold and pay to the Social Security Administration 3.5% of covered earnings.

From the employer's revenues, the employer is to pay to the Social Security Administration for the benefit of the employee another 3.5% of covered earnings.

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