# Can I claim Staff Salaries and Wages as a business expense in Isle of Man?

**Yes, fully claimable.** Yes: salaries, wages, bonuses and employer National Insurance contributions paid to employees are fully deductible for corporate income tax purposes. Employers operate ITIP and remit tax and NI monthly.

Typical amount: Varies widely. Employer NICs add 12.8% on earnings above £176 per week, so an employee paid £2,000 a month costs the employer about £158.56 of NI on top of the gross wage.

## What Income Tax Division (Treasury) says

Staff costs (gross wages, employer NICs, employer pension contributions) are deductible as a trading expense of the company in the period they are incurred, provided they are paid for genuine services and are commercially reasonable. Employer Class 1 NI is 12.8% of earnings above the secondary threshold of £176 per week (£763 per month) for 2026/27, with no upper limit. Employee Class 1 NI is 11% between the primary threshold and the upper earnings limit of £1,082 per week, and 1% above it. Excessive remuneration to connected parties may be challenged.

## When you can claim

- Gross salary paid to employees under ITIP (the Isle of Man PAYE equivalent)
- Employer National Insurance contributions (12.8% above the secondary threshold)
- Employer pension contributions to a qualifying scheme
- Bonuses paid in the period, or accrued if a legal obligation exists at year-end
- Benefits in kind provided to employees (deductible for the company, and may be taxable on the employee)

## When you cannot claim

- Dividends paid to director-shareholders (distributions of profit, not expenses)
- Salary paid to a non-working family member with no genuine role
- Salary above a commercially justifiable level for connected parties (may be partially disallowed)

## Good to know

**Pro tip:** The Isle of Man substance requirements mean that relevant sector companies must have adequate employees on-island. Ensure the company's payroll demonstrates genuine economic activity rather than skeleton staffing with operations run entirely offshore.

**Important:** The monthly ITIP and NI remittance (Form T35) is due by the 19th of the month after payment, even if the amount is nil. A late payment attracts a 5% penalty and a further 5% if still unpaid after six months. The annual return (Forms T37, T14 and T9) is due within 30 days after the tax year ends.

Source: https://www.gov.im/categories/tax-vat-and-your-money/income-tax-and-national-insurance/businesses-and-employers/

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