Employer Information

QUARTERLY REPORT FORM

Under the Social Security Law, all employers or business owners are required to submit a Quarterly Tax Report on wages earned which are subject to Social Security Tax. The Employers Quarterly Tax Report form is available here to download, or can be picked up at the Social Security Administration Office, which is open daily from 8:00 am. to 5:00 pm.

Quarterly Reports are due one full month after the end of each quarter:

QUARTER ENDING	PAYMENT DUE DATES
March 31	No later than April 30
June 30	No later than July 31
September 30	No later than October 31
December 31	No later than January 31

SOCIAL SECURITY CONTRIBUTION RATE AND TAXABLE INCOME

The Social Security contribution rate is 6% of the total gross income/wages earned in each quarter and matched equally 6% by the employer. Therefore, a total of 12% per employee including owner share shall be filed and paid to the Administration at the end of each quarter.

To join or participate in the Social Security Program, you must declare a minimum of $300 gross wages per quarter. The maximum taxable income is currently $5,000 per quarter.

SELF-EMPLOYED PERSONS: BUSINESSES WITH EMPLOYEES

Self-employed persons or business owners are required to report as their presumed income twice the amount of the highest paid employee in any given quarter, whether or not they are actually receiving any income.

Under the Law, they are considered both employer and employee at the same time and are required to contribute 12% of taxable income.

Click here to see a sample of how to calculate amount of contributions.

SELF-EMPLOYED PERSONS: BUSINESSES WITHOUT EMPLOYEES

Businesses making MORE than $10,000 in gross annual revenues: Self-employed merchants without employees and are making more than $10,000 in gross annual revenues are required to submit reports of annual income and pay combined taxes of 12% at the end of each calendar year (ending December 31). The owner's gross income per quarter is 25% of the annual gross revenue. The reports are due no later than January 31st.

Click here to see a sample of how to calculate amount of contributions.

Businesses making LESS than $10,000 in gross annual revenues: Those who make less than $10,000 must still file their reports no later than January 31 of the following year. They must submit quarterly reports along with copies of all GRT Reports filed to the Division of Revenue & Taxation. However, payment of contributions is optional.

FARMERS, FISHERMEN, TAXI DRIVERS

The Social Security Act makes it possible for full-time farmers, fishermen, and taxi-drivers to participate in the Social Security program, so that after retirement or disability they can receive Social Security benefits. But they must declare as income a minimum of $300 per quarter and pay as required.

DOMESTIC HELPERS

Under the Social Security Act, employers of domestic helpers must report and pay Social Security contributions for their employees on a quarterly basis. A Domestic Employer's Quarterly Tax Report Form can be downloaded here.

REFUNDS

Excess employee contributions during the four quarters ending on December 31 are refunded by the Administration to employees with no outstanding Social Security debt. No refund shall be made on any amount less than $5.00. In addition, no refund shall be made to any employer other than to correct an error.

SOCIAL SECURITY CONTRIBUTION EXEMPTION

Under the Social Security Act, retired chiefs and state legislators shall not be subject to Social Security contributions on any money earned from their services. This exemption shall not apply to wages and salary received from any voluntarily assumed functions. In other words, such exemption shall not be applied to wages earned from other jobs other than the above mentioned.

OFFENSES AND PENALTIES

Employers who fail to report and pay Social Security contributions due are liable for a civil penalty of not more than 100% of the amount owed or $250, whichever is greater.

In addition, all outstanding or overdue Social Security contributions, including penalties, will carry a 12% interest charge per annum.

In the event that any contribution, interest, or penalty is referred to an attorney for collection, the employer shall, in addition, be liable for reasonable attorney's fees and cost of collection, including court costs.

REPORTING AND PAYMENT

Under Part VI, Section 601 of the Social Security Operational Rules & Procedures, the Administration assumes that an employer or business owner is aware of the legal responsibilities of operating businesses within the Republic of Palau. The Administration has no obligation to remind employers of this responsibility. A claim of ignorance by any employer or business owner failing to report shall not be a valid legal defense for not reporting or non-payment of contributions.

FALSE STATEMENTS AND REPORTS

Any employer who knowingly makes a false statement or falsifies any report or record in an attempt to defraud the Social Security Administration is guilty of a misdemeanor and is liable to imprisonment for a period of twelve (12) months or a fine of not more than $2,000.00, or both.

QUARTERLY REPORT DECLARATION - WHO MAY SIGN:

Sole-proprietor - Owner / Emplyer and/or a duly authorized representative
Corporation - Any one of the officers and/or a duly authorized representative
Partnership - Any one of the partners or a duly authorized representative
Association / Organization - Any one of the officers and/or a duly authorized representative
Domestic Helper - Employer

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