Jamaica Country Guide for Hiring Employees and Contractors
This guide has important information for businesses looking to hire employees or contractors in Jamaica.
Jamaica is a country in the Caribbean. Its nominal economy was US$17.1 billion in 2022. It grew by 2.9% in the first half of 2023. The economy is dominated by the service sector that accounts for 70% of the economy.
The currency is Jamaican Dollar (J$).
Minimum Wage
Starts at J$13,000 per week
Overtime Wage
150% of regular pay
Meal Breaks
60 minutes
Rest Breaks
Not mandated
Working hours
8 hours/day, 40 hours/week
Salary Payment Cycle
Monthly or bi-monthly
Payroll Taxes
NIS, N H T, Education tax, HEART
Paid Vacation
2 weeks, 3 weeks after 10 years
Overtime Hours
Beyond 40 hours in a week
Night Shift Hours
Not mandated
Holidays
10 Holidays per year
No Work Days
Saturday and Sunday
A business needs a local entity in Jamaica to hire locally. You also need to set up a local bank account to pay the wages.
You can set up a branch office of a foreign company in Jamaica. The government fee is J$25,000. Cost of lawyer who will do the paperwork is extra. You can also set up a new company in Jamaica.
The typical cost of setting up a business in Jamaica is upwards of US$10,000.
It can take 4-6 weeks to set up a business and secure all licenses needed to start hiring employees in Jamaica.
You will need to sign an employment contract with employees in Jamaica. The contract needs to spell out terms and conditions of employment such as compensation, working hours, benefits, and termination clauses.
The business also needs to comply with local benefits, payroll, tax, and HR laws.
Contractors and employees are treated differently in Jamaica. You must take care in classifying employees correctly to avoid fines and legal action.
Jamaica has a uniform minimum wage across the country and industries. The only exception is people working as private security guards who have a separate minimum wage rate.
Minimum wage in Jamaica for a 40-hour work week is J$13,000 for all workers except industrial security guards. Minimum wage for security guards is J$14,000 per week.
Standard working hours in Jamiaca are 8 hours per day or 40 hours per week. Saturday and Sunday are holidays throughout the country. Typical work hours are 8:00AM to 5:00PM with one-hour lunch break.
You can’t employ workers less than 18 years of age in Jamaica.
Overtime pay in Jamaica is calculated is 1.5 times of the regular pay.
Employees who work night shifts are to be paid at 125% of the regular pay.
Those working on a Sunday or rest day are entitled to pay at 200% of the regular pay.
The payroll cycle in Jamaica can be monthly or bi-monthly.
Jamaica has a strong social security structure. It includes a mandatory insurance cover under a state-administered program of social security insurance called National insurance scheme. The National Housing Trust (NHT) provides affordable housing to workers contributing to the scheme.
In Jamaica, employers need to pay 12.5% of salary as payroll taxes while employees pay 7.25% as detailed below:
| Type of deduction/tax | Employer Contribution | Employee Contribution |
|---|---|---|
| National Insurance Scheme (NIS) | 3% | 3% |
| National Housing Trust | 3% | 2. |
| Human Employment & Resources Training | 3% | Nil |
| National Housing Trust | 3.5% | 2.25% |
Income tax rates in Jamaica:
| Taxable Income | Tax Rate |
|---|---|
| Up to J$ 1.5 million | No tax |
| Between J$1.5 million and J$6 million | 25% | Above J$6 million | 30% |
There are 10 National Holidays in Jamaica. If a public holiday falls on a weekend, the government may move it to the following Monday.
Employees are entitled to a minimum of 2 weeks of paid time off or vacation. It goes up to 3 weeks for those working for more than 10 years with the same employer.
Pregnant women get 12 weeks of maternity leave after one year of service. Biological get up to 20 days of paternity leave.
Both parents get up to 20 days of adoption leave if they adopt a child.
Employees with more than one year of service are eligible for 2 weeks of sick leave. Those with more than 10 years of service are eligible for 3 weeks of sick leave.
Jamaica has many social security and other employee benefit programs :
- Minimum 10 days of paid annual Leave
- 10 Public Holidays
- Maternity and paternity benefits
- Paid sick Leave
- Overtime Pay
- Severance Pay
- Social Security Benefits like National Insurance Scheme and National Housing Trust.
There is no mandatory probation period in Jamaica.
In Jamaica, employers can terminate an employment contract for business or personal reasons. They can also terminate the contract for worker’s misconduct, but the employee needs to be first warned and give a chance to explain his/her actions. Termination for any cause requires a written notice and explanation.
- 2 week’s notice for up to 5 years of service
- 4 week’s notice for service between 5 and 10 years
- 6 week’s notice for service between 10 and 15 years
- 6 week’s notice for service between 15 and 20 years
- 12 week’s notice for service above 20 years
Employees are eligible to receive a severance pay for redundancy related termination. Two week’s pays is given as severance pay for each year of service. This increases to 3 week of severance pay for each year of service beyond 10 years.
