A Basic Rate is a rate (tax) charged to all salaries of employed persons within the Honiara Town Boundary, to fund crucial Council services.
How to pay your Basic Rates
Employers should deduct the basic rate for their employees as and when wage or salary payments are made, and then paid these to the Council in the first week of the following month (unless otherwise agreed with the Council).
All payments should be made to the cashier at the Council’s main office who will issue an official receipt.
Payments to the Council should be accompanied by a schedule showing the salary and deduction of persons for whom the rates have been deducted.
Who pays for Basic Rates
Anyone who lives in Honiara and whose basic wage or salary is $10,501 or more per year.
How are Basic Rates calculated
Basic rate is calculated as 1% of a person’s basic wage or salary. For example on an annual calculation:
- A person whose basic wage or salary is $10,501 per year pays $105 per year in basic rate ($10,501 x 1% = $105)
- A person whose basic wage or salary is $16,000 per year pays $160 per year in basic rate ($16,000 x 1% = $160)
Deductions for each employee should be rounded down to the nearest cent.
Frequently Asked Questions
Should the Basic Rates be deducted from a person’s gross or net wage/salaries?
No. It is deducted from a person’s Basic (hourly) rates.
Does the rate apply to Holiday pay?
Yes. The rate applies to Holidays paid in advance when a person goes on leave.
Does the deduction include other allowances such as housing?
No. The Basic Rates is deducted purely on the Basic Salary. It should not be applied to overtime payments, cash allowances (e.g., housing allowance, clothing allowance, travel allowance, danger allowance), or to the value of other benefits provided to an employee (e.g., employer-owned housing).
What is the Basic Rate used for?
Basic Rates together with other Council Rates funds crucial Council services such as waste collection, Honiara market, Council clinics, youth and sport programs, dumpsite, Council schools and many more.