Employers FSS registration
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Employers FSS registration

Last Updated: 12/12/2022

Final Settlement System 

The Final Settlement System is a tax deduction methodology designed to produce accurate tax deductions from emoluments. This methodology ensures that the correct amount of tax is deducted from gross emoluments as they are received thus reducing the incidence of large refunds or tax bills arising from end of year tax assessments. 

In 1998 the Final Settlement System (FSS) was created to regulate the collection of such tax as prescribed in Articles 4(1)(b) and 4(1)(d) of the ITA. These provisions bring to charge any income in respect of: 

      • Gains or profits from any employment or office, including the value of any benefit provided by reason of any employment or office; and 
      • Any pension, charge annuity or annual payment.

Employer Obligations under the FSS System 

Any employer, whether an individual, corporate, or other body of persons, is regulated by the Final Settlement System Rules (S.L.372.14) and must comply with all the requirements of the subsidiary legislation. Under the FSS system, employers are obliged to deduct FSS tax and Social Security Contributions from their employees’ salaries and wages and forward such payments to the Commissioner on a monthly basis. An end-of-year reconciliation exercise is carried out by each employer and should be completed by the 15th of February of the following year to ensure that no balances or refunds are due. This annual procedure involves the creation of FS3s for each employee and a reconciliation of the payments made throughout the year with the annual totals for all employees through the FS7 form. Employers with 10 employees or more are obliged to submit their end-of-year FSS documents online. Those with less than 10 can submit the documents manually.​

Registrations Process 

Any person who pays salaries or pensions is obliged to deduct tax from these payments in accordance with the FSS Rules. The registration process is an automated one and may be accessed through one of these eforms​depending on the circumstances of the applicant.