Commentary

3.5 Contract gratuities

Trinidad and Tobago
Trinidad and Tobago | Commentary

3.5 Contract gratuities

Trinidad and Tobago | Commentary

3.5     Contract gratuities

Contract gratuities, predictable lump sums allowed for under a condition of the contract of employment, sometimes termed as a 'Golden Goodbye' payment, are a common provision within employment contracts in the offshore oil industry. Such gratuities are not deemed to be severance payments and so, do not qualify for the tax exemption.

As a result, they must be taxed according to the following rules:

  1.  

    •     25% flat rate of tax on gratuities of up to TTD 1m

  2.  

    •     30% flat rate of tax on any portion of the contract gratuity exceeding TTD 1m

Unlike severance payments,

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