XIV www.jamaica-gleaner.com FRIDAY, FEBRUARY 27, 2026 FINANCIAL GLEANER | TAJ FILING YOUR TAXES FEATURE THE GOVERNMENT of Jamaica (GOJ) has introduced an increase in the income tax threshold for individuals in the recent revenue measures outlined in the 2025-2026 Budget presentation. This increase directly affects how much of your income is taxed and how much you get to keep, and reflects the Government’s efforts to reduce the tax burden on individuals and strengthen economic resilience. WHAT IS THE THRESHOLD? In Jamaica’s tax system, the income tax threshold (or tax-free threshold) is the level of annual income an individual is allowed to earn before income tax is levied. Income tax is levied on amounts in excess of the threshold. Any income at or below this threshold is taxed at the rate of zero, meaning you do not pay tax on that portion of earnings. For example, if the threshold is $1.7 million and you earn $1.7 million or less in a year, you will not pay income tax on those earnings. If you earn more, you pay tax only on the amount above the threshold. WHAT’S CHANGING? The Government announced a gradual increase of the personal income tax threshold from $1.7 million to $2 million over a three-year period, beginning on April 1, 2025. The staged increases are as follows: $SULO 7KUHVKROG ULVHV WR DSSUR[LPDWHO\ million $SULO 7KUHVKROG LQFUHDVHV WR DURXQG million $SULO )LQDO HOHYDWLRQ WR DERXW PLOOLRQ This phased approach allows taxpayers and employers to plan, and provides for cash flow management. WHY HAS THE THRESHOLD BEEN INCREASED? The primary purpose of raising the threshold is to reduce the tax burden on individuals, especially lower- and middle-income earners, and allows taxpayers to retain a greater share of their earnings. This measure supports disposable income growth; it helps workers keep more of their money, and stimulates economic activity through increased consumer spending. It also reflects Government’s policy objective to make the tax system fairer and more equitable by lifting more people out of the income tax bracket. Persons who earn less than the threshold are not required to pay income tax, which can particularly benefit first-time earners, young professionals, and small business owners. WHAT DOES THIS MEAN FOR TAXPAYERS? Here’s a breakdown of how taxpayers will benefit from the increased threshold: 1. More tax-free income With each incremental rise in the threshold, you keep more of what you earn. For example, when the threshROG PRYHV WR PLOOLRQ WKH ILUVW PLOOLRQ RI \RXU annual income will not be taxed, meaning lower overall tax liability. 2. Relief for middle-income earners Individuals earning just above the current threshold will enjoy immediate tax relief as the threshold rises. For instance, someone earning just above the current threshold will see a significant portion of their income become tax-free when the threshold increases. 3. Encouragement for self-employed and small businesses Self-employed individuals and small business owners are allowed additional income to take care of additional business expenses or investments. Increasing the threshold reduces their taxable income base and can improve cash flow and profitability. By gradually increasing the income tax threshold, more Jamaicans will benefit from enhanced tax-free earnings, resulting in increased take-home pay, greater household liquidity, and strengthened economic confidence. The phased implementation also offers predictability for taxpayers and employers alike; an important factor in personal financial planning and business budgeting. A strong revenue measure Understanding the increase in the income tax threshold & what it means for taxpayers The primary purpose of raising the threshold is to reduce the tax burden on individuals, especially lower- and middle-income earners, and allows taxpayers to retain a greater share of their earnings. This measure supports disposable income growth; it helps workers keep more of their money, and stimulates economic activity through increased consumer spending.
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