WILLEMSTAD - Civil servants and teachers in Curaçao who earn more receive less bonus. This can be deduced from a press release from the Ministry of Finance in response to the gross bonus that civil servants and teachers will receive from the government this month.

The bonus is a fixed one-off gross amount of 1,750 guilders, but a withholding tax is applied to this. The government deducts wage tax and social security contributions from the bonus. The net amount that remains depends on the income of the civil servant or teacher.

The tax authorities use seven income brackets and levy an increasingly higher tax rate on each bracket. Those who earn less than 27,500 guilders per year do not have to pay wage tax, but do have to pay premiums. The bonus is then rounded up to 1,535 guilders. But the civil servant who has a salary three times as high, only has 1,000 guilders left from his gross bonus at the end.  

The wage tax is a so-called withholding tax on income tax. Withholding tax is a concept that indicates that tax is levied in advance. If the wage tax and social security contributions are correctly deducted from the bonus by the government, then the civil servant and the teacher will in principle not have to deal with additional claim or refund in income tax.