TAJ reminds employers of tax-free relief for Hurricane Melissa recovery payments

Tax Administration Jamaica (TAJ) is reminding employers and employees of the Government’s tax-free relief for payments to workers affected by Hurricane Melissa, which must be made by March 31.

Under the policy, payments can be made between November 1, 2025, and March 31, 2026, and must specifically support personal recovery and welfare arising from losses caused by the Category 5 hurricane, the agency said in a statement Wednesday, advising of the policy's impementation.

The agency said employers may make cash payments up to $200,000 per employee, which will be treated as tax-free. Payments can be made as a one-off sum or in multiple instalments over the five-month period, provided the total does not exceed $200,000 per employee.

“This measure is intended to provide meaningful financial support to employees as they undertake personal recovery and welfare efforts following the effects of the Category 5 hurricane,” TAJ said.

Qualifying payments will not be subject to PAYE (income tax), Education Tax, National Insurance Scheme, or National Housing Trust deductions, and will not attract employer contributions. Employers may also treat such payments as an allowable deduction for tax purposes.

The TAJ said the relief applies only to cash payments; gifts in kind do not qualify and remain subject to taxation. Any amount exceeding $200,000 will be treated as taxable emoluments and attract the applicable statutory deductions and employer contributions.

Employers are also required to retain proper records of all qualifying payments and ensure that employees receiving the relief were on staff prior to the hurricane.

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