This guide explains the Solomon Islands-specific settings and processes. Use it alongside the employee’s employment agreement and the current requirements published by Inland Revenue, the Solomon Islands National Provident Fund and other relevant authorities.

SmoothPay supplies country defaults, but you remain responsible for checking employee eligibility, entering the correct information and completing the required reporting and payments.

The Inland Revenue Division (IRD) administers PAYE in Solomon Islands. Employers deduct PAYE from taxable employment payments and account for those deductions to IRD.

Open the employee’s Tax tab in the Staff screen and review their tax details.

Keep any IRD instructions supporting a tax variation with the employee’s payroll records.

For more information about these controls, refer to:

SmoothPay calculates ordinary PAYE by converting the employee’s taxable earnings for the pay period into an annual amount, applying the annual exemption and tax bands, then converting the tax back to the period being paid.

The standard annual personal exemption is SBD30,080. Earnings above that exemption are taxed progressively: each tax rate applies only to the portion of income within its band.

An employee receives SBD2,000 in taxable earnings for one fortnight. This example uses the standard personal exemption, with no tax variation.

There are 26 fortnightly pay periods in a year. Multiply the employee’s taxable earnings by 26:

SBD2,000 × 26 = SBD52,000 annualised earnings

This is the annual equivalent used for the calculation. It does not mean the employee has already earned SBD52,000.

Subtract the SBD30,080 exemption from the annualised earnings:

SBD52,000 − SBD30,080 = SBD21,920 chargeable income

The remaining SBD21,920 is the amount to which the tax bands apply.

The first SBD15,000 falls within the 11% band. That leaves SBD6,920, which falls within the 23% band. No earnings reach the higher bands in this example.

The two amounts of tax are calculated as follows:

Adding them together gives SBD3,241.60 tax on the annualised earnings.

Only the SBD6,920 in the second band is taxed at 23%. That rate does not apply to the whole payment.

Divide the annual tax by the same 26 pay periods used to annualise the earnings:

SBD3,241.60 ÷ 26 = SBD124.68 PAYE for the fortnight

This is the ordinary PAYE amount SmoothPay calculates for the SBD2,000 fortnightly payment in this example.

An equivalent payment of SBD1,000 per week produces the same annualised earnings:

SBD1,000 × 52 = SBD52,000

The exemption and tax-band calculation are therefore unchanged. Divide the annual tax by 52 weekly pay periods instead:

SBD3,241.60 ÷ 52 = SBD62.34 PAYE for the week

The pay frequency determines both how the earnings are annualised and how the resulting tax is converted back to a payment-period amount.

Ordinary Solomon Islands PAYE is calculated from the current taxable payment and the period it covers. Imported pay history does not cause earlier earnings or tax deductions to rebalance the current calculation.

A larger payment can increase the annualised earnings and move a portion into a higher tax band. Check the taxable earnings, the period being paid and any tax variations when reviewing an unexpected result. Bonuses have a separate calculation method, explained below.

For IRD’s published tax tables and employer calculator, refer to:

IRD provides a separate method for calculating tax on bonus payments. It uses the employee’s expected normal annual earnings to determine the tax bands that apply to the bonus.

SmoothPay’s BONUS code uses the Taxable (not otherwise defined) classification. Entering a bonus using that code does not automatically perform IRD’s separate bonus calculation.

Work out the required tax using IRD’s guidance, then adjust the tax for the pay in Summary.

For example, IRD’s worked example uses expected normal annual earnings of SBD59,080. After the SBD30,080 exemption, the employee has SBD29,000 of chargeable income. A SBD2,000 bonus crosses a tax-band boundary:

The SBD580 is the bonus tax component. Add the ordinary-pay tax when determining the total tax to enter in Summary.

Where normal earnings vary, establish an appropriate estimate using IRD’s guidance. Keep the calculation supporting the override with the pay records.

For the calculation method and worked examples, refer to:

A cash allowance and a benefit supplied by the employer can have different payment and reporting effects.

The allowance code’s Classification identifies the type of payment or benefit. Its Earnings type determines whether the amount is taxable, paid in cash, or treated as an employer-provided benefit.

You must determine and enter the appropriate value. SmoothPay does not automatically value housing or vehicles, or calculate any required gross-up of an allowance value.

Use IRD’s valuation rules for employer-provided housing and vehicles. Other benefits may require a grossed-up taxable value. Cash housing and vehicle allowances are taxable under IRD’s published guidance.

Selecting a non-taxable earnings type does not establish an exemption. Check the payment’s actual treatment before configuring the code.

For valuation and tax guidance, refer to:

For more information about configuring allowance codes, refer to:

The Solomon Islands National Provident Fund (SINPF) administers NPF contributions.

The standard contribution rates are:

Contributions are calculated on the applicable NPF earnings base. Taxable earnings and NPF-liable earnings are not necessarily the same.

SmoothPay calculates NPF by default. You must establish whether each employee is eligible and apply an exemption when required.

The legislation includes exemptions for children under fourteen and monthly contribution exclusions where an employee earns less than SBD20 or works fewer than six days in the month. These earnings and days-worked tests apply to the month, rather than separately to each pay.

Check the employee’s NPF tab, including their member number, contribution rates, voluntary contributions and exemption setting. Review an exemption when the employee’s circumstances change so contributions start or resume when required.

Check the company’s employer reference and contribution defaults under Settings as well.

For more information about these settings, refer to:

Review the Include in NPF calculations setting when creating or changing pay codes.

A code’s name or tax treatment does not, by itself, determine its NPF treatment. Genuine reimbursements of expenses necessarily incurred on the employer’s behalf are excluded from the statutory wages definition, but an allowance must meet that description to qualify.

Check unusual payments, benefits and additional contributions against SINPF’s requirements before processing them.

Run Super schedule under the NPF category in the Reports screen. Select the required month using the pay-day reporting period.

The report produces an EDI.xlsx file in the Files screen. SINPF requires the employer EDI schedule.

Before submitting it, check:

For more information about producing and retrieving outputs, refer to:

Review each employee’s leave settings against their employment agreement and applicable entitlements. Employee-specific settings can differ from the standard leave-code defaults.

SmoothPay’s standard Annual Leave code uses the following settings:

SmoothPay prorates Annual Leave to the day, using the time since the employee’s last anniversary. This allows the balance and its value to be calculated through the pay-period end date.

Set a higher annual accrual where the employee’s agreement provides one. Check the employee’s own settings, particularly where new employee records have been created by copying an existing employee.

SmoothPay’s standard Sick Leave setup is:

These settings describe how SmoothPay maintains the balance. Apply any different entitlement required by the employee’s agreement or circumstances, and retain the supporting records for leave taken.

For more information about leave balances and settings, refer to:

The Labour Act provides maternity leave for eligible employees other than casual workers, subject to medical-certification requirements. It provides for up to twelve weeks, including at least six weeks after childbirth, with payment of at least 25% of the wages the employee would otherwise have earned.

Create a leave code for maternity leave when needed and set it to Auto balance. Enter the payment required for each pay period, allowing for any more generous employment agreement.

For an employee who normally works 40 hours a week at a constant hourly rate, entering 10 paid hours at that rate pays one-quarter of their normal weekly wages.

In that example, the ten hours are payment units. The employee is absent on maternity leave for the full week. Adjust the calculation where their normal earnings or agreed payment differ.

For more information about setting up and processing leave, refer to:

Review the employee’s outstanding wages, leave and any other amounts due before preparing their final pay.

In Solomon Islands, Terminate generates the Annual Leave payout as an entry in Leave taken. SmoothPay uses the employee’s leave settings and calculates the accrued amount through the pay-period end date.

Check that date when the employee finishes partway through a normal pay period. The period end used for the final pay needs to reflect the intended leave-valuation date.

Review any notice, redundancy or retirement payment separately and enter the amounts due using appropriate pay codes.

For the final-pay process and manual termination method, refer to:

Tax relief for a retirement payment depends on the applicable conditions and IRD’s acceptance of the payment. An ordinary resignation, redundancy or unused-leave payout does not automatically qualify as a tax-free retirement payment.

Once the taxable and exempt amounts have been established, enter them using two separate allowance codes, with the appropriate taxable and non-taxable earnings types.

SmoothPay does not have a dedicated Solomon Islands retirement classification that automatically calculates or splits the exempt portion. The standard RETIRE code uses Taxable (not otherwise defined).

Keep the calculation and any supporting IRD approval with the final-pay records.

For more information about creating the required codes, refer to:

SmoothPay applies Honiara City Tax by default as a recurring deduction at 1%.

You must establish whether the deduction applies to the employee. The default setting does not determine their legal liability or eligibility for an exemption.

Where an employee is exempt, mark that employee’s recurring deduction as Inactive. Review the deduction again if their circumstances change.

Contact Honiara City Council for current eligibility and exemption requirements.

For the steps to stop an employee’s recurring deduction, refer to Stopping a recurring deduction in:

Open the Reports screen and expand the Tax category to access the Solomon Islands reports.

Monthly PAYE returns and payment are due by the 15th of the following month.

IRD’s current monthly form is PAYE1, which replaced IR9. It requires separate resident and non-resident employee counts, remuneration and PAYE totals.

SmoothPay’s monthly report still uses the older IR9 layout. Use the payroll information to complete IRD’s current return, including the required residency breakdown; the older report does not provide those separate columns.

The monthly report selection is based on pay days. Reconcile the selected period with the payroll records and the amounts being remitted.

IRD’s published guidance requires annual IR2 certificates to be supplied to employees, with copies sent to IRD, by 31 January for the preceding year. The IR11 annual summary is also due by that date.

Check that the annual figures reconcile with the monthly returns and tax payments. Follow IRD’s current submission instructions and retain the required payroll records.

Producing a report or downloading a file in SmoothPay does not submit a return or make a payment.

For current forms and employer guidance, refer to:

For more information about generating and retrieving reports, refer to:

Enter the company’s banking details under Settings, and the employee’s account details in their Bank tab.

In the employee’s BSB+account field, enter the six-digit bank and branch prefix followed by the account number. SmoothPay inserts the separator between the prefix and account number.

Select Direct credit as the employee’s pay preference when preparing bank payments.

The formats listed in SmoothPay are not all supported by the banks’ current upload systems.

Confirm the payment method and required format with the bank before relying on an upload. Where SmoothPay does not provide a compatible file, use the bank’s supported payment-entry process.

For more information about preparing direct-credit outputs, refer to:

Enter Solomon Islands bank account numbers in the BSB+account field using a six-digit prefix, followed by a hyphen and the account number.

The prefix consists of:

The four zeros must be included. They are not a branch number.

Enter the account number after the hyphen. For ANZ accounts, include the account suffix and preserve the required leading zeros.

For example:

If you enter the number without the hyphen, SmoothPay inserts it after the first six digits.

For example, entering 02000000123400 displays as 020000-00123400.

These identifiers describe the account-number format used by SmoothPay. Bank-file availability and upload compatibility are explained below.

Use the appropriate classification when creating pay codes. A code’s description can be customised, so its name alone does not establish its calculation or reporting treatment.

For example, a Double time code uses the Overtime classification with a multiplier of 2. It is not a separate classification.

Set the rates and eligibility for overtime according to the employee’s agreement and applicable requirements.

For more information about creating work codes, refer to:

Review the Earnings type and Include in NPF calculations settings alongside the classification. These settings need to match the payment’s actual treatment.

For more information about creating and configuring allowance codes, refer to:

When moving to SmoothPay, establish the employee records, identifiers, leave balances and historical information needed to maintain accurate payroll records and reporting.

Ordinary Solomon Islands PAYE is calculated from the current pay period. Earlier earnings and tax do not feed into a cumulative recalculation of that pay.

Historical information still matters for annual reporting and reconciliation. Check that opening balances and year-to-date records agree with the previous system, and arrange any information needed to complete the year’s returns.

For the migration process, refer to: