$200,000 income tax relief for employees

 

Cabinet has signed off on a tax-free $200,000 lifeline for workers struck by Hurricane Melissa. 

 

Finance Minister Fayval Williams made the disclosure during a statement to the House of Representatives on Tuesday. 

 

Mrs. Williams said the current legal framework governing the taxation of employment income does not provide a structured mechanism through which temporary disaster relief payments for employers to employees are exempt from income tax. 

 

"As a result, a legislative amendment is required to provide appropriate statutory provisions for the treatment of these payments. Madam Speaker, existing fiscal tools such as discretionary waivers, write-offs and ministerial remission are inadequate for the high-volume, time-sensitive nature of disaster-related income support. These mechanisms cannot be deployed at the scale or speed required during a declared disaster," suggested the minister. 

 

"Under the proposed regime, disaster relief payments will be recognised as non-taxable only where they are provided strictly for personal recovery, welfare or household needs and are not connected in any form to employment services, performance, compensation arrangements or ongoing remuneration," she advised.

 

Mrs. Williams said the ministry has implemented and operationalised an employee support and relief programme to support one-off or limited series of disaster relief payments. 

 

She explained that the programme permits employers to provide an honorarium earlier, either as a single payment or as multiple payments from November 1, 2025 to March 2026, up to an aggregate maximum of $200,000, without incurring statutory liability for either the employee or the employer.