Private sector employment in Tonga is shaped mostly by the employment contract, with statutory rules for income tax withholding, the National Retirement Benefits Fund and public holidays. Here is what employers need to know about payroll tax, retirement contributions, holidays and hiring.
Employment income is taxed under the Income Tax Act. Employers withhold PAYE from each pay and pay it to the Ministry of Revenue and Customs. Gross employment income includes salary or wages plus bonuses, allowances and benefits in kind, and employees cannot claim deductions against it.
| Annual gross income | Rate |
|---|---|
| TOP 0 – TOP 12,000 | 0% |
| TOP 12,001 – TOP 30,000 | 10% |
| TOP 30,001 – TOP 50,000 | 15% |
| TOP 50,001 – TOP 70,000 | 20% |
| Over TOP 70,000 | 25% |
If PAYE returns are not lodged and the tax is not paid, the employer’s own income tax return cannot claim a deduction for those salaries and wages.
Every private sector employer with one or more employees, and those employees, must contribute to the National Retirement Benefits Fund (NRBF), unless the Fund has issued an exemption certificate. Public servants are covered by a separate Retirement Fund.
Minimum rate on insurable earnings, which has applied since the end of the Fund’s first 5 years.
Minimum rate on insurable earnings, deducted from pay by the employer. Members can also make voluntary contributions.
Charged on contributions not paid within 28 days after the end of the month they relate to.
Build Tongan pay the way you already structure it, with your own salary components, deductions and formula columns, such as NRBF and PAYE columns. Want to know how well IceHrm handles payroll calculations for Tonga? Contact us or see Payroll →
Public holidays are set by the Public Holidays Act. Cabinet can also appoint special public holidays, so check for announcements each year.
Holidays marked “moved to a Monday” are observed on the following Monday if they fall on a Thursday to Sunday, or the preceding Monday if they fall on a Tuesday or Wednesday. The royal birthdays are observed on the day unless it is a Sunday, in which case the holiday moves to Monday.
Leave groups give each office its own holiday calendar, so you can set the observed Monday dates each year and add any special holidays Cabinet appoints. Holiday calendars →
Tonga has no general employment statute for the private sector in the current revised edition of its laws; an Employment Relations Bill was introduced in 2020. Annual and sick leave, working hours, notice and termination terms are therefore set mainly by the written employment contract and workplace policies, so make them clear and complete.
Send contracts for e-signing, store them on the employee’s record, and set up each leave type your contracts promise with its own accrual and approval rules. Documents & e-signing →
This guide is general information to help you plan HR processes, not legal, tax or financial advice. Employment law and rates change regularly and awards, enterprise agreements and state rules may give employees more than the minimums shown here. Always confirm current requirements with the official sources or a qualified adviser.
Configure leave types, accrual rules and public holidays for Tonga, keep employee records and contracts in one place, and run payroll with your own salary components. Want to know how IceHrm handles payroll calculations for Tonga? Talk to us.
Start Free Trial Explore Features Contact Us