Updated on: 2025/08/07 09:55 (UTC)
Overview
Papua New Guinea, which officially is known as the Independent State of Papua New Guinea, is a constitutional parliamentary democracy located in Oceania. It consists of the eastern half of the island of New Guinea as well as numerous islands, most of which are to the east of New Guinea. The most prominent group of Papua New Guinea’s islands to the east of the mainland is the Bismarck Archipelago, the largest and most populous of which is New Britain. The Autonomous Region of Bougainville is among the eastern islands of Papua New Guinea and by 2020 is to have a vote on whether to declare independence from Papua New Guinea.
Papua New Guinea’s currency is the kina.
Employers in Papua New Guinea are responsible for withholding and paying income taxes for employees as well as withholding and paying certain amounts for the country’s retirement program called Superannuation.
Foreign workers in Papua New Guinea generally are subject to the same tax and labor laws as Papua New Guinean nationals. Resident individuals are liable for worldwide income while nonresidents are only liable for compensation and remuneration received in Papua New Guinea.
Papua New Guinean citizens working in the United States must comply with the appropriate visa requirements, labor and tax laws. Work within the U.S. states and territories is covered by various labor laws.
CURRENCY DETAILS
The currency of Papua New Guinea is the kina (PGK). The internationally recognized three-letter currency code for the kina is PGK, which also is one of the currency’s commonly used currency symbols. The plural form of kina is the same as its singular form.
When an amount of kina is written using the currency symbol PGK, the symbol generally precedes, but sometimes follows, the numerical value with a space between the numerical value and symbol.
When an amount of kina is written using the currency symbol K, the symbol precedes the numerical value, generally with no space, but sometimes with a space, between the numerical value and symbol. Although the currency symbol K is used more often than the currency symbol PGK for the kina in international contexts, use of the currency symbol PGK instead of the currency symbol K distinguishes amounts of kina from amounts of Myanmar’s kyat currency, for which the currency symbol K also is the primary currency symbol used for the currency in international contexts.
The kina currency symbol K$ and the variant $K include the general dollar currency symbol $ although the kina itself is not a dollar currency. When an amount of kina is written using the currency symbol K$ or the variant $K, the symbol precedes the numerical value with no space between the numerical value and symbol.
One hundredth ( 1 ⁄ 100 ) of a kina is referred to as a toea, which has the same plural form as its singular form.
TAXES
The federal government generally enacts laws relating to income tax and social taxes. There is also a training levy that certain employers must pay.
While Papua New Guinea’s 20 provinces and national capital district pay taxes to the Internal Revenue Commission, taxes in the autonomous region of Bougainville are collected by and paid to the Autonomous Bougainville Government.
The tax year is the calendar year, Jan. 1 to Dec. 31.
Income Taxes
Income tax is administered by the Internal Revenue Commission.
Coverage: Residents are taxed on their worldwide income and nonresidents are generally only taxed on their income sourced from Papua New Guinea.
Generally, individuals who spend over six months in Papua New Guinea within a calendar year period are considered residents for tax purposes.
Employees: An employee is defined by the country’s Employment Act as a person serving another person under a contract of service.
Rates and Thresholds: Income tax rates are levied on a progressive scale, with rates ranging from zero to 42 percent for residents and from 22 percent to 42 percent for nonresidents. In the country’s progressive income tax system, portions of an individual’s income are allocated to the country’s personal income tax brackets, and each portion of income allocated to a tax bracket is taxed at the tax rate applicable to that tax bracket.
Effective since Jan. 1, 2019, Papua New Guinea’s personal income tax rates and minimum and maximum amounts of annual income for each tax bracket for residents are as follows:| Range of Annual Income (Kina) | Income Tax Rate |
|---|---|
| Up to PGK 12,500 | Zero |
| More than PGK 12,500 and up to PGK 20,000 | 22 percent |
| More than PGK 20,000 and up to PGK 33,000 | 30 percent |
| More than PGK 33,000 and up to PGK 70,000 | 35 percent |
| More than PGK 70,000 and up to PGK 250,000 | 40 percent |
| More than PGK 250,000 | 42 percent |
| Range of Annual Income (Kina) | Income Tax Rate |
|---|---|
| Up to PGK 10,000 | Zero |
| More than PGK 10,000 and up to PGK 18,000 | 22 percent |
| More than PGK 18,000 and up to PGK 33,000 | 30 percent |
| More than PGK 33,000 and up to PGK 70,000 | 35 percent |
| More than PGK 70,000 and up to PGK 250,000 | 40 percent |
| More than PGK 250,000 | 42 percent |
Papua New Guinea’s personal income tax brackets for nonresidents are available in the Foreign Workers section of this primer.
Papua New Guinea updated Jan. 1, 2019, the computer calculation formulas for performing income tax withholding on resident and nonresident employees’ salary or wages and its wage-bracket method tables for performing income tax withholding on residents’ salary or wages.
Registration: Employers are required to register as a group employer within seven days of beginning to employ staff that receive salaries or wages greater than PGK 277.
Taxable Amounts: Taxable wages include: salary, wages, commission, bonus, remuneration of any kind and any allowances related to the employment of that person as an employee.
Withholding Methods: Employers are required to withhold taxes on salaries and wages on a pay-as-you-earn system, with taxes assessed each wage payment.
Employees must file Form S3, Salary or Wages Tax Declaration, with their principal employer to provide data regarding their dependants. The form must be filed when employees start employment and updated copies must be filed within 14 days of any changes of circumstances, such as changes in dependants, allowances, or benefits. The Salary or Wages Tax Declaration must be signed and completed in full by the employee before being accepted by the employer. The form also is known as the Salary or Wages Declaration and as the Dependants Declaration.
In general, for any taxable amount of salary or wages paid to an employee, less income tax would be deducted from the employee’s wages if the employee has one dependent than if the employee does not have dependants, less income tax would be deducted from the employee’s wages if the employee has two dependents than if the employee has one dependent, and less income tax would be deducted from the employee’s wages if the employee has at least three dependents than if the employee has two dependants.
If an employee works for multiple employers, the employee must file the declaration with his or her principal employer but would not file a declaration with any other employer.
Employers must send the original copy of the declaration to the Commissioner General of Internal Revenue while maintaining a copy of the declaration for at least seven years.
Returns and Remittance: Employers are required to remit the amounts withheld in a month to the Internal Revenue Commission by the 7th day of the following month. The payment must be accompanied by a statement indicated the total number of employees, the total amount of wages paid, the total amount of salary or wages tax deductions made and the citizenship of employees.
Employers are required to issue each employee a statement of earnings setting out the total amount of salary or wages earned by—and tax deducted on behalf of—that employee for the year by Jan. 14.
Employers also are required to submit the taxation copy of all used, unused and cancelled statements of earnings together with a statement reconciling the total amounts of Salary or Wages Tax deducted, with the total remitted for that year to the Internal Revenue Commission by Feb. 14.
Recordkeeping: Tax records must generally be kept for a minimum of seven years.
Penalties: Employers who fail to deduct are liable, in addition to any penalty which may be imposed by the government, to pay the un-deducted amount and may be subject to a fines ranging from PGK 400 to PGK 2,000.
Employer who fail to remit the amount of tax deducted are subject to a penalty of 20 percent of the amount not remitted plus an additional tax of 20 percent per annum, calculated on a daily basis from the date the amount became payable. The employer also may be liable to a fine ranging from PGK 500 to PGK 2,000, or a term of imprisonment not exceeding six months.
Social Taxes
There is no formal social security tax in Papua New Guinea but employers with 15 or more employees are required to register with a superannuation fund, Papua New Guinea’s retirement program, and withhold and contribute to that fund.
The Bank of Papua New Guinea regulates the superannuation funds while the superannuation funds are responsible for the administration of contributions, benefits and investment of funds.
Coverage: Citizen employees must be enrolled in an Authorized Superannuation Fund (ASF) in Papua New Guinea.
Nonstandard workers with employment contracts of less than three months and household workers are excluded.
Enrollment of noncitizens and self-employed workers is voluntary.
Rates and Thresholds: Employees and self-employed workers contribute 6 percent of wages. Employers must contribute 8.4 percent of the entire payroll.
Registration: Employees must be registered in an ASF within three months of the beginning of employment.
Taxable Amounts: Salary, wages, commissions and leave entitlements are considered taxable for superannuation contributions. Overtime pay, bonuses and compensations are not considered taxable.
Withholding Methods: Employers are required to withhold taxes on salaries and wages each wage payment.
Returns and Remittance: Employee contributions must be remitted to an ASF within 14 days of the date of deduction. Employer contributions must be remitted to an ASF within 14 days of the end of each calendar month.
Recordkeeping: Papua New Guinea’s superannuation recordkeeping laws could not be confirmed.
Penalties: Employers who fail to comply with superannuatation obligations are subject to penalties that cannot exceed PGK 500,000.
Other Taxes
Training Levy: Employers with annual payrolls that total more than PGK 200,000 must pay a 2 percent training levy on all amounts over PGK 200,000. This amount can be decreased with qualified expenditures on training for employees.
Qualifying training expenses generally are defined as expenses incurred in the training of citizen employees, including but not limited to: salaries and wages paid to employees during full or part-time training, fees paid for training of employees, salaries paid to trainers, the part of the salary paid to an employee during on-the-job training and the cost of providing scholarships or other form of training assistance.
Every employer must submit annual training levy returns to the tax authority and claim training expenses incurred during that year.
State/Jurisdiction Taxes
Bougainville Autonomous Region: The Bougainville Autonomous Region on the island of Bougainville has its own tax authority which collects and receives taxes.
Employers with employees based in Bougainville are required to complete a separate remittance each month for Bougainville.
Income tax attributable to Bougainville taxpayers needs to be separately identified and allocated to the Autonomous Bougainville Government.
Employers with employees based in Bougainville as well as other provinces are required to submit two remittances of group employer forms each month as well as two separate reconciliation statements also at the end of the year.
COMPENSATION AND BENEFITS
The Employment Act in Papua New Guinea covers minimum wage, overtime, hours of work, holidays, leave, wage payment and termination pay.
The labor law is administered by the Department of Labor & Industrial Relations.
The cities of Port Moresby, Lae, Mount Hagen, and Rabaul each have their own “common rules,” which generally address many of the same topics as the national Employment Act. Each city’s common rules take precedence over the national employment policy unless the city’s rules do not address a specific issue.
Minimum Wage
Papua New Guinea’s hourly minimum wage is PGK 3.50.
Overtime
Any work beyond the statutory working time of eight hours per day or 44 hours per week is considered overtime. Any work done on a public holiday, on Sunday or after 12 p.m. on a Saturday is also considered overtime.
Employees who work overtime on a public holiday are entitled to be paid at the hourly rate but employees who work on a Sunday are entitled to twice their hourly rate.
Employees who work overtime on any day other than a Sunday or public holiday are entitled to one and half times their hourly rate.
Hours of Work
The standard workweek is 44 hours in a seven day period. The standard work day is eight hours. Saturday and Sunday are considered the weekend.
Holidays
Papua New Guinea’s public holidays for which paid leave is required are:
- Jan. 1: New Year’s Day
- Good Friday: the Friday immediately before Easter Sunday. Effective for 2021, the date of Good Friday recognized in Papua New Guinea is April 2. Effective for 2020, the date of Good Friday recognized in Papua New Guinea was April 10.
- Easter Saturday, known internationally as Holy Saturday: the Saturday immediately before Easter Sunday. This celebration is distinct from another holiday known as Easter Saturday and alternatively as Bright Saturday, which occurs the first Saturday after Easter Sunday, but for which paid leave is not required in Papua New Guinea. Effective for 2021, the date of Holy Saturday recognized in Papua New Guinea is April 3. Effective for 2020, the date of Holy Saturday recognized in Papua New Guinea was April 11.
- Easter Sunday
- Easter Monday: the Monday immediately after Easter Sunday. Effective for 2021, the date of Easter Monday recognized in Papua New Guinea is April 5. Effective for 2020, the date of Easter Monday recognized in Papua New Guinea was April 13.
- Queen’s Birthday: celebrated on the second Monday of June in Papa New Guinea. Effective for 2021, Papua New Guinea’s standard celebration date for the Queen’s Birthday is June 7. Effective for 2020, Papua New Guinea’s standard celebration date for the Queen’s Birthday was June 8.
- July 23: National Remembrance Day: commemorating the first Battle of Kokoda during the Papua New Guinea campaign of the Pacific War in 1942 as part of World War II, and more broadly, soldiers of Papua New Guinea who lost their life in combat.
- Aug. 26: National Repentance Day: a holiday established in 2011 by Prime Minister Peter O’Neill, with this holiday intended to function as a day of Christian prayer.
- Sept. 16: Independence Day, commemorating the independence of Papua New Guinea from Australia in 1975.
- Dec. 25: Christmas Day
- Dec. 26: Boxing Day
If a holiday of Papua New Guinea would occur on a Sunday, paid leave in recognition of that holiday instead would occur on the immediately following Monday.
Christian holidays in Papua New Guinea with varying dates among Gregorian Calendar years: The dates of three of Papua New Guinea’s national public holidays for which paid leave is required, Good Friday, Holy Saturday, and Easter Monday, are based on the date of Easter Sunday, and Easter Sunday itself is a holiday for which paid leave is required in Papua New Guinea. Each year, Easter Sunday is celebrated on the first Sunday after the first full moon is visible following the first day of Spring of that year. As Papua New Guinea accords with the Western method for determining Christian holiday dates based on the Gregorian Calendar instead of the Eastern method for determining Christian holiday dates based on the Julian Calendar, the first day of Spring is considered to be the Vernal Equinox of March 21. The date of Easter Sunday varies among years because it is based on lunar cycles, which do not directly correlate to the Gregorian Calendar as it is a solar calendar, not one based on phases of the Moon.
Effective for 2021, the date of Easter Sunday recognized in Papua New Guinea is April 4. Effective for 2020, the date of Easter Sunday recognized in Papua New Guinea was April 12.
Leave
Full time employees are entitled to 14 consecutive days of paid annual leave, called Recreational Leave, per year.
Annual leave can be accumulated, under an agreement between employees and employers, for a period of up to four years.
• Sick leave: Full time employees who have worked for an employer for at least six months are entitled to up to six days of paid sick leave for a year.
Maternity leave: Employees who have worked at least 108 days within the prior 12 months or 90 days in the prior six months in the period preceding the grant of leave are entitled to unpaid maternity leave. Employees are entitled to any leave that is necessary for hospitalization prior to delivery as well as six weeks after delivery.
If an employee is unable to carry out her employment after the initial period of maternity leave, she can receive an additional period of leave up to four weeks.
Wages can only be paid if the mother decides to convert paid sick leave or paid annual leave into maternity leave.
Nursing child absence: An employee is entitled to two half hour periods over the course of a day for nursing a child. These periods should be counted as working hours and paid at the standard rate of pay.
Long-service leave: Full time employees are entitled to 3.5 days of leave for every year of service.
Wage Payment
Full time employees are to be issued their pay longer than every two weeks. An agreement between an employee and employer can allow for a longer period of payment, at a maximum of one month.
The employer must provide the employee with a written statement or pay envelope detailing the gross amount of ordinary wages, overtime pay, deductions and reasons for those deductions, net amount of wages due and the date of the pay period.
The wages must be paid in kina.
Employers must keep a record of the wages paid to each employee as well as the deductions made and the reasons for the deductions made. These records must be kept at the place of employment and be “available at all reasonable times for inspection” by the government’s Department of Labor & Industrial Relations.
Bonuses and Special Benefits
Papua New Guinea does not mandate employers to provide bonus payments to employees.
Termination Pay
If there is no provision in an employment contract on termination notice periods then notice should be given as follows:
- one day’s notice if the employee has been employed for less than four weeks;
- one week’s notice if the employee has been employed for over four weeks but less than one year;
- two weeks’ notice if the employee has been employed for over one year but less than five years; and
- four weeks’ notice if the employee has been employed for five years or more.
An employer can terminate the employee earlier if the employer pays a sum equal to the amount of salary that would have accrued to the employee during the period of the notice.
Following the termination or expiration of formal contracts, the employer must, in the presence of an officer from the Department of Labor & Industrial Relations, present to the employees all wages due to them, the original contract with the employees and a statement showing all wages due to the employees. This must be done “as soon as practicable after the date of termination or expiration.”
If the employee is absent, cannot be located, dies before all wages are due or does not present themselves for the payment of remaining wages then the employer should pay all amounts due to the employee to the Labor Office.
Workers’ Compensation
Papua New Guinea’s compensation and benefit recordkeeping laws could not be confirmed.
Recordkeeping
Employers are required to enroll in private insurance to cover workers’ compensation for their employees. The national workers’ compensation program is managed by the Office of Workers’ Compensation.
FOREIGN WORKERS
Foreign workers generally are entitled to the same rights as Papau New Guinean citizens and covered by many of the same tax and workplace laws. Specific regulations on foreign workers in Papua New Guinea are stipulated in the Employment of Non-Citizens Act of 2007 and the Employment of Non-citizens Regulation of 2008.
Work permits: Foreign workers must obtain a work permit from the Department of Labor and Industrial Relations’ Foreign Employment Division in order to work in Papua New Guinea.
Short term work permits can be granted for a period of up to six months from the date they are granted.
Long term work permits may be granted for a period from six months up to five years from the date they are granted.
It is considered an offense punishable by a fine of up to PGK 10,000 to hire a noncitizen without a valid work permit.
Visas: Noncitizens who have been issued with a work permit also must apply to the government’s Immigration and Citizenship Services for the appropriate visa to enter the country.
Taxes: Nonresidents are ineligible for the basic tax exemption available to residents, which effective since Jan. 1, 2019, is PGK 12,500 and effective until Dec. 31, 2018, was PGK 10,000.
Effective since Jan. 1, 2019, Papua New Guinea’s personal income tax rates and minimum and maximum amounts of annual income for each tax bracket for nonresidents are as follows:| Range of Annual Income (Kina) | Income Tax Rate |
|---|---|
| Up to PGK 20,000 | 22 percent |
| More than PGK 20,000 and up to PGK 33,000 | 30 percent |
| More than PGK 33,000 and up to PGK 70,000 | 35 percent |
| More than PGK 70,000 and up to PGK 250,000 | 40 percent |
| More than PGK 250,000 | 42 percent |
| Range of Annual Income (Kina) | Income Tax Rate |
|---|---|
| Up to PGK 18,000 | 22 percent |
| More than PGK 18,000 and up to PGK 33,000 | 30 percent |
| More than PGK 33,000 and up to PGK 70,000 | 35 percent |
| More than PGK 70,000 and up to PGK 250,000 | 40 percent |
| More than PGK 250,000 | 42 percent |
Wages/Payments: According to Papua New Guinean employment law, wages must be paid only in kina and not in foreign currency.
WORKING IN THE UNITED STATES
Foreign workers from Papua New Guinea must meet general visa requirements and be certified to be employed in the U.S. General visa requirements for the U.S. are included in the separate
U.S. employers also must check the names of all new-hires and employees against the Specially Designated Nationals and Blocked Persons List, administered by the Treasury Department’s Office of Foreign Assets Control (OFAC). Because OFAC prohibits financial transactions with individuals on the list, employers cannot employ them and may face fines for failing to comply.
Papua New Guinean workers are eligible to work in the U.S. under H-2B visas, which cover labor or services of a temporary or seasonal nature in occupations other than agriculture or registered nursing. The number of H-2B visas issued each year is limited by U.S. law.
For tax purposes, Papua New Guinean citizens are subject to U.S. employment-based taxation on income earned in the U.S. unless they work under specific visa types that exempt earnings from taxes.
State and local taxation of Papua New Guinean workers also can apply.
The U.S. labor laws apply to all workers employed and providing services in the country.
Work eligibility as an employee is contingent upon Department of Homeland Security and Labor Department approval and the employee receiving a U.S. Social Security number from the Social Security Administration.
Tax Residency: In general, employees working in the U.S. on a temporary basis are considered nonresidents for tax purposes unless they qualify for resident status. Employees can be granted permanent resident status through the so-called green card test or if they meet the substantial presence test under the U.S. tax code. More information on these requirements is in the
Permanent residents are subject to U.S. tax requirements the same as U.S. citizens and are taxed under the U.S. system on their worldwide earnings.
Income Taxes: Generally, nonresidents in the U.S. who are from Papua New Guinea and are working in the U.S. are subject to U.S. taxes based on their U.S.-sourced income. Income is taxed differently based on whether it is categorized as wage income or nonwage income, which includes interest and dividends.
A Form W-4, Employee’s Withholding Certificate, must be filed by each employee with their employer. All nonresidents in the U.S. who are from Papua New Guinea and are working in the U.S. must claim “single” in Step 1c, regardless of marital status; write “Nonresident Alien” or “NRA” in the space under Step 4c of the form; and may not claim “exempt” in the space under Step 4c. Nonresident alien employees may adjust withholding using Step 2b or 2c of the Form W-4; certain employees also may be able to use Steps 3, 4a, or 4b. More information about Form W-4 requirements for nonresident alien employees is available in the
Although the versions of Form W-4 issued in 2020 or later significantly differ from the versions issued in 2019 or earlier, nonresident employees that filed a valid version of Form W-4 from 2019 or earlier with their employer do not need to file another Form W-4 with the employer unless they need to implement a change for their withholding. On Forms W-4 issued in 2019 or earlier, nonresident alien employees were required to check the “single” box on line 3, regardless of marital status; write “Nonresident Alien” or “NRA” above the dotted line on line 6; and were not permitted to claim “exempt” on line 7 of the form.
An additional amount is added to a nonresident alien employee’s wages for calculating federal income tax withholding, with the amount based on pay period frequency and the date of the employee’s most recently filed Form W-4. The table of additional amounts applicable to Forms W-4 from 2020 or later and the table applicable to Forms W-4 issued before 2020 are available in the
Nonwage income and self-employed foreign workers can be subject to income tax withholding at a flat rate of 30%.
Additionally, foreign workers may be taxed differently based on the specific type of visa they hold.
Tax treaties: Papua New Guinea and the U.S. do not have a tax treaty.
Social Taxes: Most foreign workers are subject to paying into the U.S. Social Security system. Foreign nationals who are exempt from paying income tax and who do not have the eligibility to receive a social security number may not be required to pay social taxes. Foreign workers contributing to Social Security for a certain time period may be eligible to receive benefits.
Generally, foreign workers in the U.S. that have specific visas as exchange visitors or students or who are temporarily in the U.S. for agricultural work are not subject to social taxes on income that is obtained from the purpose in which they originally entered the U.S.
Totalization Agreements: Papua New Guinea and the U.S. have not entered into a social tax totalization agreement.
Wage Payment: Under certain visas for certain types of employment, employers are required to pay foreign workers the higher of either the prevailing wage or the actual wage that is paid to U.S. workers that have similar skills and qualifications.
There are no particular requirements that employees be paid in U.S. dollars.
TREATY ARRANGEMENTS
Papua New Guinea has entered into multiple income tax treaties, but does not have an income tax treaty or totalization agreement with the United States.
The countries with which Papua New Guinea has a bilateral income tax treaty in effect are Australia, Canada, China, Fiji, Indonesia, Malaysia, New Zealand, Singapore, South Korea, and the United Kingdom.
Papua New Guinea does not have any totalization agreements for social tax purposes in force.
RESOURCES
All resources are in English unless otherwise noted.
General
U.S. State Department: U.S. Relations With Papua New Guinea
CIA World Factbook: Papua New Guinea
Currency Details
International Organization for Standardization: Currency Codes - ISO 4217
Unicode Consortium: Currency Symbols
United Nations: United Nations Terminology Database: Papua New Guinea
Taxes
Papua New Guinea Internal Revenue Commission:
- Information for Employers
- Tax Forms: Salary and Wages Tax
Compensation and Benefits
The Employment Act of 1978
Foreign Workers
Papua New Guinea Department of Labour and Industrial Relations
Working in the United States
U.S. Department of Labor:
- Foreign Labor Certification
- Hiring Foreign Workers
U.S. Internal Revenue Service:
- IRS Notice 1392, Supplemental Form W-4 Instructions for Nonresident Aliens
- IRS Publication 15, Circular E, Employer’s Tax Guide
- IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities
- IRS Publication 519, U.S. Tax Guide for Aliens
- IRS Publication 901, U.S. Tax Treaties