Employees' Pay

EMPLOYEES’ PAY

Pay

Employees are paid either a wage or a salary.  Wages refer to the weekly or monthly pay; salary refers to an annual pay.

In the Bahamas every employee is taxed under a system called PAYE (Pay As You Earn).  This means that for every employee, employers are required by law to make various deductions for Tax and National Insurance.

Gross Pay – the amount of wages or salary before deductions are made.

Net Pay – the amount of wages or salary after deductions are made

Allowances – an amount subtracted from earnings before income tax is calculated.  (This is not a practice in The Bahamas).

What is Overtime

Overtime is the amount of time someone works beyond normal working hours. Normal hours may be determined in several ways:

o   by custom (what is considered healthy or reasonable by society),

o   by practices of a given trade or profession,

o   by legislation,

o   by agreement between employers and workers or their representatives.

Overtime is calculated at:

time and a half (means to multiply hourly rate by 1.50)

time and a quarter (means to multiply hourly rate by 1.25)

two thirds (means to multiply hourly rate by 2/3)

Calculation

Rate of pay/hourly rate: weekly or monthly wage divided by number of regular/normal working hours.