Payroll Compliance Updates- Papua New Guinea
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A. Update

In accordance with the National Executive Council Decision No.327/2023 dated November 21, 2023, and Income Tax (Salary or Wages Tax) (Rates) (2024 Budget) (Amendment) Bill 2023, the Government of Papua New Guinea has increased the tax-free threshold to PGK 20,000 effective from the January 1, 2024, onwards for the tax residents. Additionally, as a complementary measure, the Government has decided to repeal the dependent rebates.

This change has been made with the intention of simplifying the existing tax law and diminishing compliance costs for taxpayers. This was mainly intended to provide relief to low- and middle-income wage earners during times of inflation. The revised tax-free threshold eliminates the 22 percent rate bracket for tax residents. Consequently, individuals with an annual income surpassing PGK 20,000 will incur a tax rate of 30 toea for each Kina earned.

It is important to note that the prevailing tax slab remains unchanged, as outlined below:

Table 1: Resident Salary and Wages Tax Rates for the period January 1, 2024, and onwards:
Parts of Taxable Income Percentage (%)
The part of the taxable income that:  
Does not exceed K20,000 0
exceeds K20,001 but does not exceed K33,000 30
exceeds K33,001 but does not exceed K70,000 35
exceeds K70,001 but does not exceed K250,000 40
exceeds K250,001 42
Table 2: Non-Resident Salary and Wages Tax Rates for the period 1 January 2024 and onwards
Parts of Taxable Income Percentage (%)
The part of the taxable income that:  
Does not exceed K20,000 22
exceeds K20,001 but does not exceed K33,000 30
exceeds K33,001 but does not exceed K70,000 35
exceeds K70,001 but does not exceed K250,000 40
exceeds K250,001 42
B. Statutory Compliance Release Date: November 20, 2023
C. Effective Date: January 1, 2024
 
A. Update

Earlier this year, the Government passed an amendment to the Income Tax (Salary and Wages Tax) (Rates) Act No. 19 of 2022 (‘the Act’), temporarily increasing the salary and wages tax (SWT) tax-free threshold from K12,500 to K17,500 per annum.

In the recent 2023 Budget sitting, the tax-free threshold has further been increased to K20,000 per annum for a temporary period of January 1, 2023, to December 31, 2023. Further extension of this change is yet to be decided by the Government.

For detailed fortnight and annual tables, please refer to the link below.

Further, 22% tax rate bracket has effectively been removed. The measure does not have any impact on non- residential tax rates.

B. Statutory Compliance Release Date: December 22, 2022
C. Effective Date: January 1, 2023
 
A. Update

The government recently passed an amendment to the Income Tax (Salary and Wages Tax) (Rates) Act, temporarily increasing the salary and wages tax tax-free threshold from K12,500 to K17,500. With the temporary revision, all the workers earning at least K673 per fortnight will have tax bill reduced by K42 per fortnight.

For residents, The tax-free threshold increase is effective only from 1 June 2022 to 31 December 2022. From 1 January 2023 onwards, the tax-free threshold will revert back to K12,500.

There are no other changes to the other tax brackets in terms of thresholds or rates. The above measure does not have any impact on the rates for non-residents.

B. Statutory Compliance Release Date: May 26, 2022
C. Effective Date: June 01, 2022
 

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