Isle of Man Finance

The Isle of Man has a reciprocal arrangement with the UK whereby it adopts, with one or two exceptions, the same level of National Insurance Contributions as the UK. This ensures full reciprocity to be maintained and removes any problems where a person moves between the two jurisdictions over contributory benefits, such as the National Insurance Retirement Pension.

For the purposes of this exercise, the two main contributions which need to be taken into account are the Class 1 contributions for an employed person and the employer’s contributions. Unlike the UK, the Isle of Man has not adopted the Class 1A and Class 1B secondary contributions on payments such as benefits in kind.

Contributions are based upon the income tax year and are deducted from an employee’s pay by the employer and paid over each month to the Income Tax Division together with the employer’s contribution.

The level and the amount of the contribution are dependent upon a number of factors. First for the employee there is a primary earnings threshold and then an upper earnings limit. Earnings between those two limits are subject to contributions at a specified rate. For an employer there is no upper earnings limit.

For both an employee and an employer the rate of contribution will depend upon whether the employee is contracted out of the State’s additional pension scheme.

For further information on National Insurance Contributions, please see the relevant section in the DHSS website.