Hiring Your First Employee in Grenada: A Practical Checklist

Taking on the first employee changes a small business overnight. You become responsible for deducting tax and National Insurance, paying at least the legal minimum wage, keeping records, granting leave and following a fair process if things go wrong. None of this is difficult, but each obligation has its own office and deadline, and the cost of getting it wrong usually arrives months later as arrears, penalties or a complaint to the Department of Labour.

This checklist is built around the Employment Act (Cap. 89), the Minimum Wages Order that took effect in January 2024, and the payroll duties owed to the National Insurance Scheme and the Inland Revenue Division. It is a practical starting point, not legal advice; for anything unusual, speak to the Department of Labour or an employment attorney.

Before the first day

Do these things before the new person starts, not after the first pay day.

1. Register as an employer with NIS if you have not already, and make sure the employee has an NIS number. Young people starting their first job may need to register for one.
2. Confirm your TIN and payroll set-up with the Inland Revenue Division so you can deduct and remit income tax under PAYE.
3. Check the worker's right to work. Grenadian and OECS nationals and CARICOM skills certificate holders are fine; anyone else needs a work permit before starting.
4. Set the wage at or above the minimum for the category of work. Since 1 January 2024 the general floor under the Minimum Wages Order has been EC$1,200 a month or EC$60 a day, with higher rates for some categories.
5. Put the terms in writing. A written statement of the job title, wage, pay frequency, hours, place of work, leave, probation period and notice terms prevents most disputes.
6. Decide how you will keep records of hours, wages, deductions and leave. Inspectors and NIS officers can ask to see them.

It also helps to prepare a short induction: who the new person reports to, where things are kept, health and safety basics and how pay day works. Small businesses that skip this often lose good recruits in the first month.

Minimum wage: what the 2024 order changed

The Minimum Wages Order made at the end of 2023 replaced the order of 2011, which had left some categories at levels that had not moved in over a decade. It raised the floor for most workers to at least EC$1,200 a month and extended coverage to groups such as call centre staff, construction helpers and media workers, with some categories set above the general floor. Shop assistants, domestic workers, security guards and drivers are among the occupations covered by specific rates.

Employers are expected to display notice of the minimum wages at the workplace, and underpayment can lead to orders to pay the difference, fines and, in serious cases, prosecution. Because the order lists rates by category and by month, week, day or hour, read the schedule for your specific type of worker. The Ministry responsible for Labour publishes the order, and the Department of Labour will confirm which category applies.

Payroll deductions: NIS and PAYE

National Insurance. Contributions are shared between employer and employee as a percentage of insurable earnings, up to a monthly ceiling. Grenada is raising the combined rate in small annual steps to strengthen the fund: it was reported at about 13 per cent in 2025, with further steps scheduled and the employer paying the larger share, so confirm the current year's rate with NIS. Deduct the employee portion from each pay, add your own portion and pay the total to NIS monthly.

Income tax under PAYE. Employees earning above the personal allowance pay income tax, which you deduct each pay period using the tables or guidance from the Inland Revenue Division and remit monthly. Many lower-paid workers fall below the threshold, but you must still keep the records.

Pay slips. Give the employee a pay slip showing gross pay, each deduction and net pay. It protects both sides and is often requested by banks when the employee applies for a loan.

Year-end. Provide each employee with a statement of annual earnings and tax deducted so they can file their own return, and reconcile your NIS and PAYE payments for the year.

Hours, leave and public holidays

The Employment Act sets minimum standards for working hours, overtime, vacation leave, sick leave and maternity leave. Contracts can be more generous but not less. Because the detail depends on length of service and the type of work, read the relevant parts of the Act or ask the Department of Labour rather than copying a contract from another country, where entitlements differ.

Grenada also has a full calendar of public holidays, including Independence Day on 7 February, Emancipation Day on 1 August, Carnival Monday and Tuesday in August, National Heroes' Day on 19 October, Thanksgiving Day on 25 October and the Christian holidays. Employees who work on a public holiday are usually entitled to a higher rate. Small businesses in tourism and retail, which often open on holidays, should agree in advance who works and how they are paid.

Maternity protection deserves particular care. Dismissing a worker because of pregnancy is unlawful, and NIS provides a maternity benefit to insured women who meet the contribution conditions, which interacts with what the employer pays.

Keep a simple leave record for each employee showing days taken and days remaining. It settles most disagreements in a minute and is the first thing a labour officer will ask for if a complaint is made.

Domestic workers, casual help and family members

Households that employ a housekeeper, nanny, gardener or caretaker are employers too, and domestic workers are one of the categories with a specific rate in the Minimum Wages Order. The same duties apply: register with NIS as an employer, deduct the employee contribution, pay your share and remit monthly. Many expatriate households and holiday-home owners overlook this, and it leaves the worker without credit towards sickness, maternity, injury and pension benefits.

Casual and occasional help raises its own questions. A person who comes once a month to cut grass is in a different position from someone who works three fixed days a week under your direction; the second is very likely an employee. If in doubt, ask NIS how they would classify the arrangement.

Family members who work in the business for pay are employees in the eyes of NIS and the tax authorities, and paying them properly can help them qualify for benefits. Unpaid family help is common in small shops and farms but should be a conscious choice rather than an accident.

Discipline, dismissal and the mistakes that cost money

Most disputes that reach the Department of Labour or the courts involve one of these errors.

• No probation clause. A clear probation period, set out in writing, gives both sides time to assess the fit before longer-term protections apply.
• Dismissal without a fair process. The Act requires justification for dismissal. Warnings, a chance to respond and written records matter if a case is challenged.
• Ignoring notice and termination allowance. Employees dismissed for reasons other than serious misconduct are entitled to notice or pay in lieu, and those with qualifying service to a termination allowance based on years worked.
• Paying cash with no records. It may feel simpler, but it leaves no proof of what was paid and usually means NIS was not paid either, which hurts the worker's future benefits and creates arrears for you.
• Calling an employee a contractor. Labelling a full-time worker as self-employed to avoid NIS does not change the legal reality if you control their hours and work.

Frequently asked questions