Reporting & Payment for Businesses without Employees
Social Security & Healthcare Fund contributions are reported and paid on a quarterly basis. In this section, we will consider how business without employees should report and pay their quarterly contributions.
If your business has employees, you can read how Businesses with Employees report and pay their quarterly contributions.
Calculating the Owner's Presumed Gross Wage/Actual Gross Salary/Wage
When reporting their Quarterly Contributions to the SSA, owners of businesses without employees are required to submit copies of all GRT Reports that were filed to the Division of Revenue & Taxation. The gross revenue earned during that quarter is important because this amount becomes the basis for calculating the owner's reported presumed gross income or wages.
The owner's presumed gross income per quarter is calculated as 10% of the business's reported total gross revenue in a year, whether or not the owner actually received that income. If the total gross revenue reported to Division of Revenue & Taxation was $24,000 for a year, your gross income or wage is $2,400 ($24,000 x 10%).
The owner may choose to report his/her actual salary/wages as a basis for contributions.
Owners of businesses that do not have employees are considered both employer and employee at the same time. Therefore, they are required to contribute 14% for Social Security and 5% for Healthcare Fund of total gross wages.
If you own multiple businesses that do not have employees, then the owner share should be filed and paid under the company with the highest reported gross revenue. If you make more than $10,000 in gross annual revenues, you are required (mandated under the Law) to pay this owner share. Businesses that make less than $10,000 in gross annual revenues have an option to pay but are required to file quarterly.
Reporting and Payment Deadlines
The payment of SS & HCF contributions differ between businesses making more than $10,000 in annual gross revenues and businesses making less than $10,000 in annual gross revenues. Click on any of the following two topics to learn more.
- Businesses Making MORE than $10,000 in Annual Gross Revenues
Businesses without employees and are making more than $10,000 in gross annual revenues are required to report and pay Social Security and Healthcare Fund contributions at a quarterly basis.
Effects on your Eligibility for National Health Insurance
Choosing to pay contributions at the end of the year will affect your eligibility for HCF benefits during the current year. Since your contributions come in at the end of the year, you will not be eligible for National Health Insurance during the current year. Also, if you choose to pay for all 4 quarters at the end of the year, you will only get two quarters of NHI coverage, since the coverage period for 1st and 2nd Quarter has passed.
The tables below display NHI payment options that are open to businesses without employees:
Medical Savings Accounts
If you opt not to pay HCF contributions on a quarterly basis, you will not have any contributions that go into your individual MSA. If they would like to have an MSA, you may voluntarily deposit into your Medical Savings Account (minimum of $10.00 per deposit).
- Businesses Making LESS than $10,000 in Annual Gross RevenuesOpen or Close
Businesses without employees and are making less than $10,000 in gross annual revenues have the option to file Social Security and Healthcare Fund contributions on a quarterly basis. Payment of contributions is optional.
If you decide not to pay contributions, you will not be entitled to SS or HCF benefits. However, you may volunteer to participate under both programs (fund) SS and HCF by paying 5% of the 10% of your reported quarterly gross revenue to enable you to be insured under the HCF for the benefits of inpatient and off-island care. This form of payment must be paid on quarterly basis to ensure uninterrupted NHI coverage. For SS contributions on the other hand you must pay 12% of the 10% of the reported annual gross revenue, you may choose to pay on a quarterly, however, a recalculation at the end of the year must be made to ensure full compliane of the Law.
You may also voluntarily deposit into your Medical Savings Account (minimum of $10.00 per deposit).
How to Fill your Quarterly Report Form
Below is a sample of how a business without employees should report and pay SS & HCF Contributions with the Quarterly Report Form.
|Total Gross Revenue|
|The total gross revenue must match the gross revenue that is reported to Division of Tax & Revenue. This amount is important for businesses without employees because this amount becomes the basis for calculating the owner's presumed gross wages.|
|The owner share for a business without employees is presumed to be receiving as presumed remuneration 10% of the business's reported total gross revenue. In this case, the gross wages would be $2,400 (or 10% of $24,000)|
|Maximum Taxable Wages|
|Effective October 1, 2017, there is no maximum on how much gross wages is subject to SS and HCF tax.|
|Calculate 14% of the amount found in column 3 which is the "gross wages" .|
|HCF tax is 5% of gross wages, with no maximum ceiling. In this case, HCF tax is $300 or 5% of $6,000.|