Payroll in Trinidad and Tobago: NIS Increase, PAYE & Compliance Guide 2026

Intro

If you run payroll in Trinidad and Tobago, you already know that January 5, 2026 changed the math.

The NIS contribution rate jumped from 13.2% to 16.2%. That is not a small adjustment. For an employee earning TT$13,600 per month or more, the total weekly contribution went from TT$414.30 to TT$508.50. Multiply that across your workforce and the numbers add up fast.

But the rate increase is just the trigger. The real issue is whether your payroll system handled it automatically or whether someone had to manually update a spreadsheet and hope they got the earning classes right. Because if your system still has the old rates loaded, every NIS contribution, every PAYE calculation, and every employee's net pay has been wrong since January 5th.

This is the complete guide to getting payroll right in Trinidad and Tobago in 2026. PAYE, NIS, Health Surcharge, the calculation order that trips up most employers, and the penalties you face when any of it is late.

What Changed on January 5, 2026: The NIS Rate Increase

Following the passage of the 2025 Finance Bill, the National Insurance contribution rate increased from 13.2% to 16.2% of insurable earnings. The change took effect on January 5, 2026, and was confirmed by the NIBTT and reported by the Trinidad Express and CNC3.

A further increase to 19.2% is already legislated for January 2027.

The contribution split remains two-thirds employer, one-third employee. At the new 16.2% rate, that is approximately 10.8% employer and 5.4% employee.

Here is what that means for your payroll:

Your NIS contributions are higher. The new earning class table has larger fixed amounts across all 16 classes.

Your employees' PAYE should be slightly lower. Because 70% of the employee's NIS contribution is deducted from taxable income before calculating PAYE, a larger NIS contribution means a smaller tax base. If you updated NIS but did not recalculate PAYE, your employees are overpaying income tax.

Your total employer cost per employee is higher. The employer's share of NIS increased by roughly 23%. For a workforce of 200 in the top earning class, that is an additional TT$37,440 per month.

If your payroll system required someone to manually update these numbers, you will need to do the same thing again in January 2027. A system that handles rate changes automatically saves you from repeating this exercise every year.

Trinidad and Tobago's Three Mandatory Payroll Deductions

Every employer in Trinidad and Tobago is responsible for calculating, deducting, and remitting three statutory obligations to two separate government bodies:

To the Board of Inland Revenue (BIR) via the Inland Revenue Division (IRD):

1. PAYE (Pay As You Earn) income tax
2. Health Surcharge

To the National Insurance Board of Trinidad and Tobago (NIBTT):3. NIS (National Insurance System) contributions

Getting one wrong affects the others. PAYE depends on NIS being calculated first, because 70% of the employee's NIS contribution is tax-deductible. Skip that step and every income tax calculation downstream is incorrect.

PAYE (Pay As You Earn)

PAYE is Trinidad and Tobago's income tax withholding system. Employers deduct it from employee earnings and remit it monthly to the BIR.

Personal Allowance: TT$90,000 per year. The first TT$90,000 of annual income is not taxable. If an employee earns TT$90,000 or less per year, no PAYE is due.

Tax Rates:

• 25% on chargeable income up to TT$1,000,000 annually
• 30% on chargeable income exceeding TT$1,000,000 annually

What counts as chargeable income: Gross salary, minus the personal allowance, minus 70% of the employee's NIS contribution, minus any BIR-approved annuity premiums (up to TT$30,000 annually).

This is where most manual payroll processes start producing errors. The 70% NIS deduction is not optional. It is a statutory reduction to taxable income. If your payroll system calculates PAYE on gross minus only the personal allowance, your employees are overpaying income tax every single pay period.

The overpayment per employee might look small. Across 100 employees over 12 months, the cumulative error becomes a real problem at year-end reconciliation.

TD1 Forms: Employees submit TD1 forms to declare their personal allowance and any additional approved deductions. Employers calculate monthly PAYE based on the employee's annualized income and the applicable tax brackets, adjusted for TD1 claims.

Remittance deadline: PAYE must be remitted to the BIR by the 15th of the month following the month the deduction was made. January deductions are due by February 15th. Employers use the e-Tax platform or submit the PAYE/Health Surcharge Monthly Return at the IRD offices.

Source: Inland Revenue Division - PAYE, Ministry of Finance - Paying Your Taxes

NIS (National Insurance System)

NIS is the compulsory social security scheme administered by the NIBTT. It funds retirement pensions, sickness benefits, maternity benefits, and employment injury coverage.

The 2026 Earning Classes and Contribution Amounts

Unlike flat-rate systems, NIS in Trinidad and Tobago uses a banded structure. Employees are assigned to one of 16 earning classes based on weekly or monthly earnings, and contributions are fixed amounts per class.

These are the rates effective January 5, 2026 (16.2% contribution rate):

Source: NIBTT Contribution Rates effective January 5, 2026

Maximum insurable earnings are capped at TT$13,600 per month. Employees earning above this ceiling pay the Class XVI rate. No additional NIS obligation applies above the cap.

Class Z contributions: Employers alone pay Class Z for unpaid apprentices, persons over 65 still employed, and persons receiving a retirement benefit who have returned to work.

Why the Banded Structure Creates Payroll Complexity

A flat percentage is easy. Multiply gross by rate, done. The banded structure is different.

Your payroll system needs to assign each employee to the correct class based on their weekly or monthly earnings and apply the fixed contribution amount for that class. When someone gets a raise that moves them from Class XII to Class XIII, the contribution jumps from TT$366.00 to TT$405.90 per week. Not a gradual increase. A step change.

This is especially common in Trinidad and Tobago's energy sector, where shift differentials and overtime can push employees across earning class thresholds from one pay period to the next. An engineer working standard hours might fall into Class XIV, but a month with significant overtime could push them into Class XVI. If your payroll is not recalculating the class assignment every pay period, you are either underpaying (creating NIBTT liability) or overpaying (creating a reconciliation headache).

If you are managing this with spreadsheets across 50, 100, or 200 employees, this is where errors live.

Remittance deadline: NIS contributions must be remitted to the NIBTT by the 15th of the month following the pay period.

Health Surcharge

Health Surcharge is a mandatory tax that funds Trinidad and Tobago's public healthcare system, administered by the IRD.

Rates (per the IRD):

• TT$8.25 per week for employees earning more than TT$469.99 monthly (or more than TT$109.00 weekly)
• TT$4.80 per week for employees earning TT$469.99 monthly or less

Exemptions: Employees under 16, employees 60 and over, and individuals whose only income source is a pension.

Health Surcharge is not a large amount. But it is the deduction businesses most commonly misconfigure, especially when hiring younger workers or when longtime employees cross the age-60 threshold mid-year. The BIR expects it on the same monthly return as PAYE.

The Calculation Order: Why Sequence Matters

You cannot calculate all three deductions from the same base number. The sequence is mandatory, and getting it wrong means every downstream number is also wrong.

Step 1: Calculate NIS. Determine the earning class. Apply the fixed contribution for that class. Deduct the employee's share.

Step 2: Calculate the NIS tax deduction. Take 70% of the employee's NIS contribution. This reduces their taxable income for PAYE purposes.

Step 3: Calculate PAYE. Gross income minus personal allowance (TT$90,000/year) minus 70% of employee NIS minus approved annuities = chargeable income. Apply 25% (up to TT$1M) or 30% (above TT$1M).

Step 4: Calculate Health Surcharge. Apply the fixed weekly rate based on the income threshold.

Step 5: Net pay. Gross minus employee NIS, minus PAYE, minus Health Surcharge, minus voluntary deductions (pension, loans, union dues).

If you calculate PAYE before NIS, you are taxing income that should have been reduced by the 70% NIS deduction. Every payslip is wrong. The year-end TD4 reconciliation reveals the error. And you owe corrections.

What This Looks Like in Practice

Consider an employee earning TT$20,000 gross per month (approximately TT$4,615 per week).

NIS: Weekly earnings of TT$4,615 falls into Earning Class XVI (TT$3,138+). Total weekly contribution: TT$508.50. Employee: TT$169.50/week. Employer: TT$339.00/week. Monthly employee NIS: approximately TT$734.50.

70% NIS deduction: 70% of TT$734.50 = TT$514.15/month, or TT$6,169.80 annually. This reduces taxable income.

PAYE: TT$240,000 annual gross minus TT$90,000 personal allowance minus TT$6,169.80 NIS deduction = TT$143,830.20 chargeable income. At 25%: approximately TT$2,996/month.

Health Surcharge: Income exceeds TT$469.99/month. Rate: TT$8.25/week. Four-week month: TT$33.00.

Net pay: TT$20,000 - TT$734.50 (NIS) - TT$2,996 (PAYE) - TT$33.00 (Health Surcharge) = approximately TT$16,236

Now imagine doing this for 200 employees in the energy sector, some with overtime that shifts their earning class, some with BIR-approved annuity deductions, and some who turned 60 mid-year and became exempt from Health Surcharge.

That is why the question is never "can we do payroll manually?" It is "should we?"

Penalties: What Happens When You Are Late

Trinidad and Tobago does not give payroll a grace period.

Late PAYE/Health Surcharge remittance:

• 25% penalty on the deduction amount (or TT$40, whichever is greater)
• 20% annual interest on both the unpaid deduction and the penalty, from due date until payment

Late NIS remittance:

• 25% penalty from the 16th of the following month
• 15% annual interest on outstanding contributions
• Potential loss or delay of employee benefits (retirement, sickness, maternity)

Failure to register employees with NIBTT:

• Fines up to TT$5,000

The penalties compound. Miss one month, you owe the deduction plus 25% plus interest. Miss three months, each compounds separately. For a company with 100 employees, a single missed deadline can generate thousands in penalties before anyone notices.

For energy companies, financial institutions, and manufacturers operating multi-shift operations across Trinidad and Tobago, the administrative burden multiplies with every pay cycle. Weekly payroll for hourly workers, monthly for salaried staff, different earning class calculations for each group. One missed deadline applies penalties across the entire workforce.

Filing Calendar

What Industries in Trinidad and Tobago Need to Watch

Trinidad and Tobago's economy runs on sectors where payroll complexity is highest.

Oil and gas and petrochemicals employ large workforces with complex shift patterns, overtime structures, and project-based assignments that move employees across earning class thresholds regularly. The NIS banded system means that a worker's contribution can change from one pay period to the next based on hours worked.

Financial services typically have straightforward salaried structures but face higher scrutiny on compliance. Banks and insurance companies operating under regulatory frameworks cannot afford BIR penalties on their record.

Manufacturing often runs multiple pay cycles (weekly for production, monthly for management) and manages seasonal fluctuations that add and remove employees throughout the year. Each new hire needs correct NIS registration, earning class assignment, and Health Surcharge configuration from day one.

Retail and hospitality deal with high turnover and part-time workers who may fall into lower earning classes or qualify for Health Surcharge exemptions based on age. Getting these right across a rotating workforce is where manual processes fail.

Payroll Compliance Checklist for Trinidad and Tobago

Every Pay Period:

• NIS earning class verified for each employee based on current earnings
• NIS contributions calculated at 16.2% (January 2026 rate)
• 70% of employee NIS deducted from taxable income before PAYE
• PAYE calculated with TT$90,000 annual personal allowance
• Health Surcharge applied at correct weekly rate
• Health Surcharge exemptions applied (under 16, over 60, pension-only income)
• Net pay calculated after all mandatory and voluntary deductions

By the 15th of Each Month:

• PAYE and Health Surcharge remitted to BIR
• NIS contributions remitted to NIBTT

Annually:

• TD4 Summary and individual TD4 slips filed by January 31st
• NIS rates reviewed for legislated changes (19.2% coming January 2027)
• Employee earning class assignments reviewed for salary changes
  
  

The Real Question

Your payroll system should have loaded the new NIS contribution table on January 5th without anyone touching it. The 70% NIS deduction should flow into PAYE automatically. Health Surcharge exemptions should apply the day an employee turns 60. And the monthly remittance reports for both BIR and NIBTT should generate themselves.

Did it?

If any part of your payroll still depends on someone remembering to update a formula, manually checking earning class thresholds, or pulling numbers into a spreadsheet before the 15th, you are running on hope. That works until it does not.

At Workzoom, we build payroll and HR software that handles Trinidad and Tobago's compliance natively. NIS earning classes, PAYE with the 70% deduction, Health Surcharge, and automatic rate updates are built into the platform alongside workforce management, talent, and scheduling. One connected system. No spreadsheets. No manual rate changes. No penalties.

We already run payroll for some of the largest employers in the Caribbean. Here is what that looks like in the Bahamas. And here is what compliance looks like in Jamaica.

If you want to see how it works for Trinidad and Tobago, let's talk.

Related Reading:

• 7 Signs Your Payroll System is Failing
• HR Software Implementation: Why Most Fail and How to Get It Right
• The Real ROI of All-in-One HR Software in 2026
• Jamaica Payroll Compliance Checklist: What TAJ Auditors Actually Look For
• Payroll in the Bahamas: What It Takes to Pay Your People Right
  
  

Sources:

• NIBTT Earnings Classes and Contributions from January 5, 2026
• Trinidad Express: NIB rate to increase from January 5
• CNC3: NIB reminds public contribution rate to rise in 2026
• Inland Revenue Division: Health Surcharge
• Inland Revenue Division: PAYE
• Ministry of Finance: Paying Your Taxes
• PwC Trinidad and Tobago: Individual Other Taxes
• activpayroll Trinidad and Tobago Global Insights