What global businesses need to know about payroll in Trinidad and Tobago

Did you know that Trinidad and Tobago is the largest producer of natural gas in the Caribbean Community, and the second-largest producer of oil? No wonder that a country with a population of less than 1.4 million does very well economically, especially compared to many of its neighbors.

This archipelago of islands at the southern end of the Caribbean is gradually diversifying its economy: the balance between services and industry is now approximately 50/50, and tourism is growing as a major economic driver, as well as a healthy banking and financial sector.

Wage levels in Trinidad and Tobago are low, and combined with a relatively simple set of payroll and employment laws, it’s one of the standout choices for expansion into this part of the world. This guide covers all the key basics around running payroll in Trinidad and Tobago.

Getting Started 

TTConnect and TTBizLink are the two online platforms from which you can conduct more or less all of the required business set-up processes. The costs of the processes are nominal, and there is no minimum share capital requirement involved.

Businesses start by reserving their name and getting approval, then incorporating the company (if a limited-liability company). You can then go on to apply for various different registrations on TTBizLink, including industrial permits and licenses, export certificates, import duty concessions, and (if applicable) fiscal incentives. It’s also the place where you can apply for work permits, which are mandatory for all foreign workers and are generally approved for all senior management and technical staff.

Once all this is completed, you can open a business bank account, which is required in Trinidad and Tobago for certain types of transactions to take place.

It’s also worth noting that Trinidad and Tobago runs an unusual financial year, which starts on 1 October and finishes on 30 September.

Employment Considerations

Contracts in Trinidad and Tobago can be oral or written, but all new employees must be registered with the National Insurance Board within their first week of employment. It’s also good practice for new employees to register with the Board of Inland Revenue at the same time. 

Employees generally work 40 hours per week, spread across eight hours per day Monday to Friday. Overtime pay is 150% for the first four hours of overtime worked, or 200% for any hours after this, as well as all hours worked on holidays. Collective bargaining can have an influence on these rates, and set in stone any maximum amounts of overtime that employees can work.

Notice periods are a minimum of 45 days, and all notices should be served in writing. Probation periods are generally between three and six months, and are normally negotiated in employment contracts or through collective bargaining.

Compensation, Bonuses and Severance

Trinidad and Tobago’s national minimum wage was raised on January 1 2024. The new rate is TTD 20.50 per hour (approx. £2.40; $3.00; €2.80); based on a standard 40-hour week, this works out at TTD 820 per week (approx. £95; $120; €110). Keep a close eye on political developments, in case more rises are implemented in the future.

Bonuses are generally performance-based and are awarded at the discretion of the employer, and 13th-month bonuses are not customary.

Severance pay, for employees with at least one year of service, is two weeks of pay per year worked. This increases to three weeks of pay per year for employees with at least five years of service.

Tax and Social Security

Income tax rates in Trinidad and Tobago are very straightforward. The first TTD 84,000 earned per year (approx. £9800; $12,400, €11,400) is exempt, after which a 25% kicks in. Earnings about TTD 1 million per year (approx. £116,500; $147,000, €136,000) are taxed at 30%. 

Corporation tax in Trinidad and Tobago is generally 30%, but a higher rate of 35% applies to petrochemical companies and those working in banking. Petrochemical companies also have their profits taxed at 50%. If the total corporation tax bill comes to less than 0.6% of gross revenue, then a 0.6% business levy is also applied. The VAT rate is 12.5%.

There are two social security contributions in Trinidad and Tobago. The first is capped at TTD 414.30 (approx. £48; $60, €56) per week for all employees who earn at least TTD 13,600 per month (approx. £1600; $2000, €1850), and lower rates apply for those earning less. Employers contribute two-thirds and employees one-third. The other contribution is health insurance at TTD 8.25 per week (approx. £1.00; $1.20, €1.10) for employees who earn more than TTD 470 per month (approx. £55; $70, €65).

Holidays and Leave

Paid leave entitlement in Trinidad and Tobago is decided entirely in employment contracts or through collective bargaining. The most common arrangement is for employees to receive two weeks of paid leave each year, as long as they have worked at least 220 days for the same employer. Employees should also be paid for the 15 days of public holiday each year; holidays like Easter that fall at weekends are normally served the following Monday.

Maternity leave is 14 weeks, as long as mothers have at least one year of service. This can be started at any time in the six weeks before the mother’s due date. Employers should pay one month at full salary, while social security covers two months at half pay. There is no entitlement to paternity leave or parental leave. 

Paid sick leave entitlement is generally two weeks per year, but as with annual leave, this can be varied contractually or through collective bargaining.

In Summary

The good news is that Trinidad and Tobago’s payroll and employment demands are fairly straightforward and stable. But you should be aware of the influence of collective bargaining that may change some of them significantly, and any future changes on the horizon. That’s why we recommend working with a global payroll partner who can give you the benefit of their expertise, not only in Trinidad and Tobago, but in all your operating territories worldwide.

This article is for informational purposes only and not intended to convey or constitute legal or any other advice. It is not a substitute for advice from a qualified professional.