A controversial rise in payroll tax comes into force today — along with a slew of increased government fees.

The extra costs come courtesy of this year's Budget, which critics claim unfairly punishes the working poor for Government's failure to prepare for the economic crisis.

Workers will feel the pinch initially when they check their take-home pay.

Payroll tax for most jobs has gone up from 14 percent to 16 percent, with Government expecting employer and employee to share the two percentage point increase.

That means that if you earn $60,000 a year and your employer makes you pay the maximum employee contribution for payroll tax of 5.75 percent, you will now pay $3,450 a year, compared to $2,850 previously.

If you get paid weekly, that equates to about $66.34 a week, as opposed to $54.80 — an increase of more than 20 percent.

Your employer will pay almost 11 percent more a year on your salary — $6,150, compared to $5,550 previously.

Companies which stump up the entire payroll tax contribution for their employees — as many exempt firms do — will be looking at an overall increase of 14 percent on those payments.

High earners will have to pay 16 percent payroll tax on their salaries up to $750,000, where previously it was tax-free after the first $350,000. But payroll tax w ill not be the only factor reducing disposable income for the majority of people.

Anyone with a car, motorcycle or scooter — and there are more than 40,000 of them on the roads — will have to fork out about five percent more for their vehicle licence from today.

If you ride a bike with an engine under 50cc, for example, the licence now costs $58.40, rather than $55.81. The licence for a 100cc motorcycle is now $83.95, as opposed to $78.95.

Car licences now cost between $281 and $1,551, depending on length, where previously the range was $268 to $1,476.

If you own a boat, there is even more bad news. You will have to pay almost 90 percent more for a mooring licence this year — they have gone up from $79 to $150.

With an estimated 5,200 moorings on the Island, that change alone should boost Government's coffers by almost $370,000.

Pet owners needing to obtain a licence for a dog or bitch which has not been neutered or spayed will now have to pay $100 — an increase of more than 40 percent from the previous $69 fee.

The same fee increase — from $69 to $100 — applies for entering a marriage notice.

Gaining a short birth certificate will now set you back $20, as opposed to $16, and standard size passports have gone up to $84 from $66.

Foreign currency purchase tax has doubled from 0.5 to one percent, which will give Government an extra $14.5 million windfall for 2010/11.

That means if you take US $500 out of the ATM for a trip to the States, the tax will now be $5, rather than $2.50.

You will also feel the effects of the increase when shopping locally, as businesses here will have to pay more tax on goods bought overseas and will pass the burden onto the consumer.

The Island's most needy will be hit by yet another increase today — the monthly premium for the basic state health insurance plan (HIP) will jump to $299 from $241, with another rise expected next year.

• How will this year's Budget affect you and your family? If you'd like to share your story, email news@royalgazette.bm or call 278-0137/33.