The Seychelles tax system is primarily based on income, with both employers and employees having specific obligations. Understanding these obligations is crucial for businesses operating in Seychelles to ensure compliance and avoid penalties. This guide provides a comprehensive overview of employer tax responsibilities and employee tax deductions in Seychelles for 2025.
Navigating the complexities of payroll taxes and employee deductions can be challenging. This guide aims to simplify these processes, offering detailed information on social security contributions, income tax withholding, available deductions, compliance deadlines, and special considerations for foreign workers and companies in Seychelles.
Employer Social Security and Payroll Tax Obligations
Employers in Seychelles are required to make contributions to social security on behalf of their employees. These contributions fund various social welfare programs, including retirement benefits, healthcare, and unemployment assistance.
- Social Security Contributions: Employers contribute a percentage of their employees' gross earnings to the Seychelles Pension Fund (SPF). As of 2025, the employer contribution rate is 5% of the employee's gross earnings.
- Payroll Tax (Skills Development Levy): Employers are also required to pay a Skills Development Levy, which is used to fund training and skills development programs. The rate for this levy is 1% of the employee's gross earnings.
- Calculation: These contributions are calculated on the gross earnings of the employee, without any ceiling.
- Payment: Social security contributions and the Skills Development Levy must be remitted to the Seychelles Revenue Commission (SRC) on a monthly basis.
Income Tax Withholding Requirements
Employers in Seychelles are responsible for withholding income tax from their employees' salaries. This tax is then remitted to the Seychelles Revenue Commission (SRC) on behalf of the employee.
- PAYE (Pay As You Earn) System: Seychelles operates a PAYE system, where employers deduct income tax from employees' earnings based on the prevailing tax rates.
- Tax Brackets: The income tax rates for residents in Seychelles are progressive. As of 2025, the tax brackets are as follows:
| Taxable Income (SCR) | Rate |
|---|---|
| 0 - 9,600 | 0% |
| 9,601 - 24,000 | 15% |
| 24,001 - 72,000 | 20% |
| Above 72,000 | 30% |
- Non-Residents: Non-residents are subject to a flat income tax rate of 15% on their Seychelles-sourced income.
- Calculation: Income tax is calculated on the employee's taxable income, which is the gross income less any allowable deductions.
- Remittance: The withheld income tax must be remitted to the SRC on a monthly basis, along with the necessary reporting forms.
Employee Tax Deductions and Allowances
Employees in Seychelles are entitled to certain tax deductions and allowances, which can reduce their taxable income and, consequently, their income tax liability.
- Pension Contributions: Contributions made by employees to approved pension schemes are tax-deductible, up to a certain limit.
- Medical Expenses: Employees can claim deductions for medical expenses exceeding a certain threshold, provided they are supported by valid receipts.
- Other Allowable Deductions: Other deductions may include donations to approved charities and expenses related to education or training.
- Personal Allowance: Every resident individual is entitled to a personal allowance, which is deducted from their gross income to arrive at the taxable income.
- Deduction Limits: The specific limits for these deductions are subject to change and are usually announced by the SRC annually.
Tax Compliance and Reporting Deadlines
Adhering to tax compliance and reporting deadlines is crucial for both employers and employees in Seychelles. Failure to comply can result in penalties and interest charges.
- Monthly Remittances: Employers must remit social security contributions, Skills Development Levy, and income tax withheld from employees' salaries to the SRC on a monthly basis. The deadline for these remittances is typically the 21st day of the following month.
- Annual Returns: Employers are required to file annual returns, providing details of the total salaries paid to employees and the taxes withheld. The deadline for filing annual returns is usually in January of the following year.
- Employee Filing: Employees may also be required to file individual income tax returns, especially if they have income from multiple sources or are claiming deductions.
- Penalties for Non-Compliance: Penalties for late filing or non-payment of taxes can include fines and interest charges.
Special Tax Considerations for Foreign Workers and Companies
Foreign workers and companies operating in Seychelles are subject to specific tax rules and regulations.
- Work Permits: Foreign workers must obtain valid work permits before commencing employment in Seychelles.
- Tax Residency: The tax residency status of foreign workers is determined by their period of stay in Seychelles. Individuals who stay in Seychelles for more than 183 days in a calendar year are generally considered tax residents.
- Tax Treaties: Seychelles has entered into double taxation agreements with several countries. These treaties may provide relief from double taxation for foreign workers and companies.
- Corporate Tax: Foreign companies operating in Seychelles are subject to corporate tax on their Seychelles-sourced income. The corporate tax rate is currently 25%.
- Business Tax: Businesses operating in Seychelles are also subject to business tax, which is calculated on their turnover.
- Expatriate Levy: Employers hiring foreign workers may be required to pay an expatriate levy. The levy amount varies depending on the sector and the skill level of the foreign worker.
