What is the difference between periodic and cumulative PAYE?

Periodic PAYE taxes each pay period on its own — that period's pay against that period's slice of the threshold. Cumulative PAYE looks at the whole year to date — total pay against the threshold to date — and deducts the tax still owed, which smooths out bonuses and uneven pay and ties out at year end.

Which PAYE method should I use in Jamaica?

Periodic is simplest and fine for steady salaries. Cumulative is better when pay varies — bonuses, commissions, irregular hours — or when you want the year to reconcile cleanly without employees filing to settle over- or under-payment.

What is the opening-balance trap with cumulative PAYE?

If you start using cumulative PAYE part-way through the year, you must enter each employee's pay and PAYE already deducted earlier in the year. Without it the calculation assumes they earned nothing yet, gives the whole threshold at once, and under-deducts on the first run.

Cumulative vs Periodic PAYE in Jamaica

Periodic — the simple default

Each pay period is taxed on its own: that period's pay against that period's slice of the tax-free threshold. Predictable and easy — best for steady salaries. The trade-off: if pay jumps around (a big commission month, a bonus), tax can spike in the high month, and unused threshold from a low month isn't automatically clawed back — the employee settles any difference on their own annual return.

Cumulative — smoother and self-correcting

Each pay period looks at the whole year so far: total pay to date against the threshold to date, works out the tax due for the year up to now, and deducts what's still owed after what was already taken. This smooths out bonuses and uneven pay and ties out cleanly at year end — but only if the year-to-date picture is correct.

Which should you choose?

Pick…	When…
Periodic	Steady salaries; you want the simplest method to explain to staff.
Cumulative	Bonuses, commissions or irregular pay; you want year-end to tie out without staff having to file to settle.

The mid-year trap (read this before switching)

Starting cumulative part-way through the year? Cumulative tax needs each person's pay and PAYE already deducted earlier in the year (from your previous system). If you don't supply it, the calculation assumes they earned nothing yet, hands over the whole year's tax-free amount at once, and under-deducts tax on the first run. It self-corrects over the next few periods, but that first payslip will be wrong.

The fix: before the first cumulative run, enter each employee's opening year-to-date figures (statutory income and PAYE already deducted this year). A brand-new hire — first job this tax year — needs nothing. In Brawta this is a field on the employee record, and switching methods is a setting you can change per person or company-wide.

What the trap costs, in numbers

A manager transfers in from another employer and joins you in June — period 6 — on J$400,000 a month. Same person, same June payslip, worked out twice: once with their opening year-to-date figures entered, once without.

June payslip	Opening YTD missing	Opening YTD entered
Gross for the month	J$400,000.00	J$400,000.00
NIS (3%)	J$12,000.00	J$12,000.00
Statutory income for the month	J$388,000.00	J$388,000.00
Year-to-date statutory income	J$388,000.00	J$2,328,000.00
Year-to-date threshold at period 6	J$925,434.00	J$925,434.00
PAYE already deducted this year	J$0.00	J$293,274.00
PAYE deducted in June	J$0.00	J$57,367.50

With the opening figures missing, the year-to-date income the calculation can see — J$388,000 — is well under the year-to-date threshold of J$925,434, so nothing is chargeable and the payslip shows no tax at all on a J$400,000 month. That is J$57,367.50 not deducted from a single payslip, and it repeats until the accumulated income overtakes the threshold.

This is not a miscalculation — and that is exactly why it is dangerous. For someone genuinely in their first job of the tax year, J$0 in June is the correct answer: cumulative deliberately hands a new entrant the year-to-date tax-free amount. The method cannot tell a first-time entrant from a transfer-in, because the only thing that distinguishes them is the opening figures you supply. A plausible-looking payslip is the failure mode — nothing looks wrong.

Brawta asks for those opening figures when you add someone who is taxed cumulatively, and warns when earlier periods in the tax year have neither a payroll run nor opening balances covering them.

Brawta's employee record, where an individual's PAYE method and opening year-to-date figures are set

Where the choice in this article actually lives: the PAYE method is per employee, and it is the same record that carries the opening year-to-date figures a mid-year joiner needs. Click to open it in the demo.

Either method, worked out correctly.

Brawta does both periodic and cumulative PAYE, handles Week 53, and prompts for opening balances when you onboard mid-year — so the figures are right from the first payslip. Free to try.

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