IRC – Salaries & Wages Tax

Salaries & Wages Tax

Fiscal (tax) year

  1. Income tax is calculated for each fiscal year. PNG fiscal year begins on 1 January and ends on 31 December.

  2. For salary or wage earners, who are not required to submit income tax returns, the tax period is a fortnight and tax is assessed by reference to the salary or wage income derived in that fortnight.

Residence

  1. Individuals will normally be treated as a resident of Papua New Guinea in a particular year if they spend over six months in Papua New Guinea. This period does not need to be continuous it may be made up of a number of intermittent visits..

  2. Residence may also be affected by the operation of a double tax agreement.

Lodging Tax Returns

The salary and wage earners are not required to submit tax returns. The tax period is a fortnight and tax is assessed by reference to the salary or wage income derived in that fortnight unless they earn other income in excess of K100.

However, if an employee incurred expenses in earning salary or wage income, and the expenses exceed K200 in any fiscal year, the employee may lodge an income tax return to claim a tax rebate calculated at 25% of the extent to which the expenses claimed exceed K200. For example, if expenses were K500 the employee would receive a refund of K75 (K300 x 25%).

 

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