Self-Employed Tax in Grenada

Self-employed individuals in Grenada operate under a multi-tax framework administered by the Inland Revenue Division (IRD) and the National Insurance Scheme (NIS). Unlike employees whose tax is withheld at source through Pay As You Earn (PAYE), a self-employed person is responsible for calculating, declaring, and paying all obligations directly. The key obligations are personal income tax on net business income, the Annual Stamp Tax on gross receipts, NIS contributions, and potentially VAT once turnover crosses the registration threshold.

What are the personal income tax rates for self-employed individuals?

Grenada imposes personal income tax on chargeable income under the Income Tax Act. For residents, the first XCD 36,000 of annual income is exempt through the personal allowance, meaning no income tax is owed on that amount. Chargeable income between XCD 36,001 and XCD 60,000 is taxed at 10%; chargeable income above XCD 60,000 is taxed at 28% [1][2]. Chargeable income for a sole trader is gross business receipts minus allowable deductions for expenses wholly and exclusively incurred in generating that income. A self-employed person must file an Annual Income Tax Return with the IRD within 90 days of the end of the accounting period (generally by 31 March for the preceding calendar year). Employees whose employer deducts PAYE are not required to file separately unless their income exceeds XCD 60,000, but every sole trader and sole trader-equivalent is required to file regardless of income level once earnings exceed the XCD 36,000 threshold [2].

What is the Annual Stamp Tax and does it apply to the self-employed?

The Annual Stamp Tax (AST) is a gross-receipts tax distinct from income tax. Any person who owns or operates a business in Grenada must register and pay AST, which includes self-employed sole traders. The tax is levied on the prior year's gross receipts: 0.5% for businesses with annual gross receipts below XCD 300,000, and 0.7% for businesses with gross receipts of XCD 300,000 or above [3]. The first XCD 36,000 of gross receipts is exempt, and a minimum AST of XCD 100 applies to any business below that threshold. AST returns are due by 31 March, and payment may be spread over nine monthly installments from April through December [3]. Because AST is calculated on gross receipts rather than net profit, it applies even when the business reports no taxable income for income tax purposes -- the two taxes are calculated independently.

How do NIS contributions work for self-employed persons?

Self-employed persons in Grenada must register with the National Insurance Scheme (NIS) and make contributions on their gross earnings. The contribution rate for 2026 is 13.5% of gross earnings, a figure confirmed by NIS Grenada and validated by NOW Grenada's January 2026 reporting [4][5]. This rate is scheduled to increase incrementally: 14.0% in 2027, 14.5% in 2028, 15.0% in 2029, 15.5% in 2030, and 16.0% by 2031 [5]. The maximum insurable earnings ceiling is XCD 5,200 per month (XCD 62,400 per year), so contributions are capped at that level regardless of actual earnings [4]. Effective July 2023, self-employed contributors gained flexibility: contributions may be made when income is received or in annual lump sums, and no penalties or interest accrue on late self-employed payments -- though contributions must be made in the year preceding a claim to access short-term benefits such as sickness and maternity pay [4]. Registration at the nearest NIS office requires a certified birth certificate and valid photo identification.

When must a self-employed person register for VAT?

Value Added Tax (VAT) in Grenada is charged at a standard rate of 15% on most taxable supplies of goods and services. A self-employed person whose annual taxable supplies reach or exceed XCD 300,000 is required to register with the IRD as a VAT registrant [6]. Entertainment-venue operators and promoters must register regardless of turnover. Once registered, a business charges VAT on its taxable sales, reclaims input VAT on qualifying business purchases, and files a VAT return with the net difference due to the IRD no later than 20 days after the end of each tax period [6]. Failure to register when the threshold is crossed exposes the business to back-assessments and penalties. Self-employed persons below XCD 300,000 in annual taxable supplies are not required to register, though voluntary registration is permitted.

How does self-employed taxation differ from employee taxation?

An employee in Grenada has income tax, NIS contributions, and any applicable levy withheld and remitted by the employer under the PAYE system. The employer deducts income tax monthly and remits it to the IRD by the 15th of the following month; NIS is remitted by the 14th [2][4]. The employee has no filing obligation unless annual income exceeds XCD 60,000. A self-employed person, by contrast, bears full responsibility for every obligation: there is no PAYE withholding, no employer paying the employer-side NIS share, and no automatic remittance to the IRD. The self-employed person must register separately for income tax, AST, NIS, and VAT (if applicable); calculate obligations independently; file returns by the respective deadlines; and fund all payments from business cash flow. Effectively, a self-employed individual absorbs both the employee and employer portions of NIS (the full 13.5% in 2026), whereas an employee's NIS is split between the individual and the employer.

Grenada self-employed tax obligations at a glance

For the complete picture of tax professionals available in Grenada, including practitioners with experience in sole-trader returns and Annual Stamp Tax filings, see the Grenada country overview. Cross-border operators and those with Grenada-sourced income outside the island may also find value in reviewing the Grenada tax treaty and residency overview before engaging local counsel.

This page summarises publicly available rules published by the Grenada Inland Revenue Division and the National Insurance Scheme. Tax obligations are fact-specific and change over time. Individuals with complex income, multiple business activities, or material cross-border arrangements should engage a qualified tax professional registered with the Grenada IRD before filing.