One of the best things about working, however, is the freedom you gain from earning your own money.
Before you spend all of your first pay, however, it’s worth thinking about what you want to achieve. Even if you’re not earning a lot, your hard-earned cash can start going towards the things you really want in life.
Find out your working hours, how much you’re going to be paid and what other entitlements you’ll get for working - such as vacation, sick leave, insurance, retirement benefit, tips, bonuses and commission. Your employment contract or letter of appointment will have this information. You can’t be paid less than $4.00 per hour, which is the minimum wage.
Once you’re working, you must be registered with the Inland Revenue Department, so that you can pay your taxes. As outlined in the Pay Your Taxes section, you’ll have to pay 8 percent of your salary in tax to the BVI Government. Your employer will be responsible for making this deduction before you receive your pay. The first $10,000 of your salary is tax free.
You will also need to register with the Social Security Board. To register, simply fill out an Employee's Registration Form, which is available online and at the Social Security Board's offices.
The form must be submitted with a birth certificate or passport. Upon registration, a card bearing your name and your Social Security Number will be issued. You’ll have to contribute 4 percent of your salary to Social Security and your employer will have to contribute another 4.5 percent on your behalf. Your employer will be responsible for making this deduction from your salary and paying it to the Social Security Board.
You should receive a payslip from your employer, which will show:
- Your gross pay - This is the total you earned before any deductions, such as PAYE (pay as you earn) tax and Social Security, are taken out.
- The tax and any other deductions that come straight out of your pay.
- Payroll benefits, such as your employer’s contribution to your pension, Social Security and insurance.
- Any other deductions for things you may have agreed to such as health and dental insurance or gym fees.
- Your net pay – the actual amount that will be paid to your bank account or in a check.
Check your payslips regularly to make sure you’re being paid and taxed correctly. Don’t assume your employer will get this right. Your payslip is proof that deductions have been taken from your salary. You might want to periodically confirm with the Inland Revenue Department and the Social Security Board that your tax and contributions are being paid by your employer.
Having a budget and saving for your goals
It’s tempting to spend everything you earn. But in the long-term, you’ll be better off if you get into the habit of putting a portion of your earnings aside to achieve the things you want in life – a holiday, your education, a car, or even a house deposit.
As soon as you know how much you’ll get paid, make a budget so you can plan how to spend it.
If you do have money left over, and you owe money on credit cards, hire purchase or other loans – put it towards paying off your debt more quickly. Otherwise save it for those goals you have.
Making the most of employee benefits
Employers are required by law to offer a pension or retirement plan for permanent employees. Some employers will make your contribution to the pension plan mandatory and match a percentage of your contribution. Your employer will enroll you automatically, unless you opt out.
While retirement may seem a long way off, it may not be the best idea to opt out of your employer’s retirement plan as it’s never too early to start saving for retirement. If you opt out, you will also lose out on free money in matching contributions that your employer might be offering.
Employers offer other benefits as well. It’s worth finding out about these as they may boost your pay, save you money, or help you to progress your career.
They may include free or subsidized gym membership, professional development courses or subsidized training, health insurance or dental insurance.
If you need a work permit in order to be employed in the BVI, make sure you have the necessary permits and documents before you start to work. Check with the Department of Labour for all your requirements.