Guernsey payroll and social contributions

Source-cited draft. Professional review is pending. Figures are limited to the periods and assumptions below. This Guide prepares working papers; it is not authority to file or pay.

Scope

Prepare ordinary 2026 Class 1 payroll and a Class 2 review checklist. Secondary pensions, benefits in kind, director elections and mixed employment status need additional case-specific calculations.

Sources were accessed on 22 October 2026. A dated rate table controls its stated period; an undated guidance page does not prove that all later amendments have been incorporated.

Registration and filing

Register the employer for tax and contributions. Apply the issued coding/direction notice. Without a coding notice, deduct tax on gross pay after approved pension payments rather than inventing an allowance. Quarterly returns and payments are due 15 April, 15 July, 15 October and 15 January. Employer guidance.

2026 contribution rates

The operative Revenue Service leaflet, effective 1 January 2026, states:

Class	Rate	Lower earnings limit	Upper earnings limit
Employee, Class 1	7.5%	£192/week or £832/month	£3,780/week or £16,380/month
Employer, Class 1	7.1%	Same	Same
Self-employed, Class 2	12.4%	£9,984/year	£196,560/year

Benefit Payment & Contribution Rates 2026, pp19–20. The lower limit is a liability threshold, not a deductible allowance. Confirm age, class, period and exception before applying this table.

Calculation and examples

For an ordinary full month at earnings above the lower limit, apply the Class 1 rates to gross earnings capped at £16,380. Employee contributions reduce net pay; the employer share is an additional cost.

• £3,000 gross: employee £225; employer £213; gross plus employer SI £3,213, before pensions and other costs.
• £20,000 gross: capped base £16,380; employee £1,228.50; employer £1,162.98.
• At £832, rates apply to the whole qualifying base: £62.40 employee and £59.07 employer after rounding to pennies. Do not calculate only on earnings above £832.
• For pay below the limit, a partial period or multiple employers, obtain the applicable classification instructions before assigning zero or pro-rating a cap.

Directors, distributions and self-employment

Controlling employee-directors became employed for contributions from 1 January 2025, subject to the prior election described by the Revenue Service. Employee dividends from the employer or an associated private company enter contribution earnings, with allocation rules when a cap is exceeded. Qualifying loans also require review. Self-employed people are assessed at the maximum unless they apply for earnings-related assessment. Class 1 and 2 guidance.

Maintain separate schedules for wages, distributions, loans, contributions and secondary pensions. A corporate tax rate of zero does not establish zero payroll or shareholder liability. Open scope: verify the phased secondary-pension rate and eligibility, benefit valuations and international coverage before calling this a complete payroll pack.

Self-checks and output

• Retain the relevant source version, the applicable period and the facts establishing scope.
• Reconcile every input to the client's records; keep estimates separate from actual amounts.
• Recompute the example and boundary cases before applying the method.
• Record exclusions and unresolved points explicitly. Do not convert a missing source into an exemption.
• Deliver a calculation, evidence list, filing calendar and reviewer questions. Record the exact revision reviewed.

Disclaimer

General tax and accounting reference material only. These drafts have not been professionally attested. A qualified professional in the relevant jurisdiction must check the facts, current law, elections and deadlines before anyone files, pays or acts on an output.

Contributed by Ryan Duguid.