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Payroll tax income plummets

Less money: Employment income in Bermuda has fallen, and Govt has collected its lowest level of payroll tax revenue since the second quarter of 2007.

The total amount earned by Bermuda employees fell by more than four percent in the first three months of this year as unemployment took its toll on the economy.The figure came in a detailed breakdown of first-quarter economic data from the Department of Statistics, which also shows how the fall in employment income has impacted Government coffers, with quarterly payroll tax revenue hitting its lowest level for five years.Bermuda employees earned a total of $848.9 million in the January through March period, down by around $37.5 million, or 4.2 percent, from the same period last year. It was the Island’s third successive quarter of year-over-year declines in total employment income.The fall in payroll tax collected was partly down to the relief from the tax being given by Government to some hard-hit sectors, as well as fewer people working and downward pressure on the earnings of those who still have jobs from dire economic conditions.Payroll tax revenue was $77.6 million in the first three months of the year, the lowest collected in a quarter since the $72.4 million in the second quarter of 2007, according to the quarterly stats.Total Government revenue in the first quarter plunged 10.5 percent to $251.8 million, compared to $281.3 million in the same period a year earlier.Government extended payroll tax relief for restaurants, hotels and retailers this year, after estimating in a pre-Budget report that the relief was costing it some $20 million in annual revenue.Another notable statistic was a 4.8 percent fall in Government expenditure, although public spending on wages, salaries and employee overheads rose 8.1 percent from the prior-year quarter to $113.5 million.Asked for a comment on the decrease in employment income, Bermuda Chamber of Commerce Economic Advisory Committee co-chair Peter Everson said: “No surprise as the number of people employed in Bermuda continues to decline and, for those remaining in work, overtime, commissions and tips are harder to come by.”Read more in Business, Page 9