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PAY SLIP: A PORTRAIT OF LIFE

The Jamaica Gleaner in recent reports highlighted that half of the public sector accepted a 4% wage increase and the national minimum wage was increased to JA$9,000.00 (US$58.06) per week. Considering the prevailing economic environment, these workers are deemed very fortunate. The COVID-19 pandemic has caused severe economic crises worldwide, which has resulted in high unemployment rates, logistic challenges, and hyperinflation.


Jamaica has had its share of economic issues, including an unstable high foreign exchange rate (JA$156.00 for US$1.00) and an inflation rate as high as 9.7% in January 2022 (boj.org.jm).


The wage increase secured by public servants will not compensate for the continued depreciation in their purchasing power. The result is that many of them remain dissatisfied with the reality that more money does not mean more access to goods and services for them. The term "the working poor" is very real and aptly describes many public servants whose ‘Pay Slips’ do not fully mirror their qualification, training, experience, and dedication.


For many, a ‘Pay Slip’ is the most important financial instrument in their lives. It is a portrait of their monthly income and expenses.


Many years ago, when I worked in the health ministry I found myself on numerous occasions giving counsel to staff members who were having financial difficulties. On one such occasion, I can recall tears flowing from Nurse Donna’s eyes, as she entered and sat in my office one afternoon. She said she was overwhelmed with life demands and couldn’t meet her monthly financial obligations, even though she was working long hours of overtime and sessions. After our heart-wrenching discussion, I pointed out to her that maybe she needed to consolidate her expensive loan portfolio into a cheaper loan from her Credit Union. I also remember one of my very animated transport officers, Devon, walking into my office saying "boss mi bruk, mi bruk bad, mi need help". As he took a seat without my permission, he handed me his Pay Slip with a sad desperate look on his face and lamented "Tings bad enuh boss". A quick review of his Pay Slip revealed that his major obligations were funded by 4 Loan Sharks. Sixty percent 60% of his earnings were being paid out to these loan companies, which meant that after deductions his take-home pay could hardly care for his family. I suggested to him to develop a budget and try to live within his means.

Domestic Helper in Jamaica


The Working Poor


The World Bank defines extreme poor as those who are living on less than US$1.90 per day. There is a general misconception that those who work and are given a Pay Slip, are economically stable and independent. Unfortunately, the opposite is true as many people getting a Pay Slip are still living below the poverty line, and fall within the “extreme poor” category. The “Working Poor” are working people whose incomes fall below a given poverty line, due to low-income jobs and low familial household income (wikipedia.org). The characteristics of the “Working Poor” in the developed and developing world are somewhat different. The “Working Poor” in the developed world is impacted by unemployment, while the “Working Poor” in the developing world is impacted by extreme poverty impacting employed people. The US Census Bureau indicated that 10.5% of the USA population lived below the poverty line in 2019 and four percent (4%) as “Working Poor” (www.bls.gov). The World Bank indicated that in 2020, twenty-three percent (23%) of the population in Jamaica was identified as living below the poverty line (www.worldbank.com). In 2006, the International Labour Organization (ILO) conducted a study of the “Working Poor” in the Caribbean countries, they identified that sixteen percent (16%) of persons employed are “Working Poor”.


Governments have been very deliberate in creating care packages to give support to persons living below the poverty line. In the case of Jamaica, this support includes strengthening the following thematic areas Social Safety Net, Human Capital Development, Likelihood Creation and Income Security, Food and Nutrition Security, Basic Social and Physical Infrastructure, Psycho-Social, Cultural, And Normative Advancement and Coordination and Capacity Building (National Policy on Poverty, 2017); for the “Working Poor”, a similar policy focus directed at improving their lives is required. This initiative will require payment of competitive salaries, greater job quality and security, healthier and safer working conditions for workers. Important worker advocates such as Trade Unions are important in defending the cause of workers. Trade Unions in Jamaica have major historical significance in defending workers’ rights. In the case of the public health industry, there are as many as 30 active unions working for a better standard of living and quality of life for health workers. Trade Unions should negotiate creative terms and conditions of employment for their members, to include provisions of lands, houses, reduction in PAYE, development of special allowances, incentives, bonuses, and performance-based pay.


There are disparities among the “Working Poor” depending on the country in which they reside and based on pre-existing economic factors that are contributing to poverty. The Gross Domestic Product (GDP) level of a country, social protection and job security are also major determinants of the poverty rate of a country. Developing countries with low GDP levels and employment quality deficits, have higher levels of “Working Poor” rates. Jamaica has high-income tax rates, foreign exchange instability, and high inflation rates that significantly impact employment quality for most workers. Furthermore, the country’s high debt servicing levels (33 cents of every dollar is used to service debt) resulting in fewer financial resources being available for compensation and investments in other employment quality factors for public servants. Public servants in Jamaica earn approximately sixty percent (60%) of the salary of private-sector workers and have less access to automation, technology, training, and development. Public servants are therefore at a disadvantage and are more likely to be part of the “Working Poor”. Today the plight of the public servant is even direr in this COVID-19 pandemic period.

Actual and projected poverty rates and real GDP per capita

(Source: Statistical Institute of Jamaica and World Bank staff calculations)


The Pay Slip


Most persons are employed and remunerated through the issuing of a Pay Slip. They are employed on a temporary or permanent basis and are paid weekly, bi-weekly or monthly. A Pay Slip uniquely identifies each employee by name and their employee number, and displays some of the following critical data elements:


  1. Basic Salaryis the monies that are paid to salaried employees without any additions or deductions.

  2. Overtime pay – is the monies earned at a higher rate for working more hours than are part of basic pay, this includes working on weekends and holidays.

  3. Special Allowances – is the monies paid for special allowances such as vehicle, laundry, housing, etc.

  4. Incentives pay – is the monies paid as financial rewards outside of that paid for the number of hours worked.

  5. Payroll Deductions – these are monies that are deducted from salary to pay income taxes, insurance, pension, etc.

  6. Personal Deductions – these are monies that are deducted to pay for loans and other payments approved by the employee.

  7. Year to date – these are the accumulation of monies paid to an employee over a particular period.


The following is a typical Pay Slip issue in Jamaica:


Example of a Pay Slip


The deductions include National Insurance Scheme (NIS) – 3%, National Housing Trust (NHT) – 2%, Education Tax (ED TX) – 2.25% and PAYE – 25%.


The income received on a Pay Slip includes basic salary, overtime, allowances, and incentives. Basic pay is usually fixed for monthly pay staff and variable for hourly-paid staff. While overtime pay is usually variable and paid as time and half, double or triple time. Allowances and incentives are paid by employers based on agreements made with Unions and employees. Some are paid monthly and others are a one-off payment. The living standard of most employees is directly link to the income they received on their Pay Slip. Most employees’ salary is directly correlated to their level of education and experience, plus the type of job and the sector in which they work. The expenses on a Pay Slip include payroll and personal deductions. The payroll deductions are wages taken from an employee’s total earnings for the payment of taxes, pension, insurances, etc. The personal deductions are wages taken from an employee’s total earnings for the payment of loans for houses, cars, education, furniture, etc. The pay that is received after deductions are available to employees to be utilized for other mandatory and discretionary expenses, such as utilities, food, transportation, clothes, etc. It is always advisory? Or recommended that “for” employees to develop a monthly budget that recognizes their mandatory and discretionary expenses and how they will be funded from their Pay Slip or other.


The best way to be frugal is to prepare a monthly budget. The budgetary process is important to identify deficits and how they will be funded or excess funds in the budget that can be placed in a saving account, investments, or business. Employees with deficits in their budget plans may be forced to reduce their expenses or do multiple jobs, while the employees with excess funds in their budget plans will have greater opportunities for spending, savings, or investments. In a digital world, most employees’ pay is directly transferred to their bank account, where further monitoring and control of their financial resources can be better managed. A Bank Statement is also an important financial instrument to be assessed by an employee on a monthly basis, to confirm their expenditures and bank balances. The ‘Pay Slip and Bank Statement’ are important portraits of an employee’s life.

Dr. DF Suggestions


In a high inflation environment typified by higher cost of living, I am convinced that the following suggestions can make a big difference to people’s lives:


  1. Understand your Pay Slip Identify and manage your mandatory deductions and discretionary expenditures that are taken from your Pay Slip.

  2. Make a budget – Prepare a monthly budget to monitor and control your income and expenditures.

  3. Create multiple income streams – Create more than one income stream through investments, business, and monetization of your natural talents.

  4. Reduce your cost of life – Eliminate high-cost discretionary costs and reduce mandatory costs related to mortgages, housing, food, and utilities.

  5. Secure low-interest funds – Borrow monies from financial institutions that provide low-interest loans and seek out government grants and subsidies.

  6. Develop care programs – Governments should seek to provide support to persons living below the poverty line who are unable to access critical consumables and services.

  7. Strengthen social infrastructures – Governments can strengthen educational, security, and health systems, plus ensure reasonable access to public transportation and utilities.

  8. Strengthen physical infrastructure – Governments to invest in physical infrastructures, such as, houses, roads, utility systems, commercial and industrial complexes.


Clearly, a Pay Slip has critical information that can be used to better plan our lives and for many, reflects a portrait of their lives. The income on the Pay Slip is a major determinant of a person’s quality and standard of life. As for our public servants, I hope with time our country will be better able to compensate them for their invaluable service. We all have the ability to generate the Pay Slip we deserve because we are not defined by it; so don’t be limited to that “Pay Slip”, understand it, manage it and build on it!


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