Palau Personal Income Tax
Detailed personal income tax rates and rules for Palau in 2026.
Palau imposes a wage tax on employment income. The first USD 8,000 of gross wages is taxed at 6%, and wages exceeding USD 8,000 are taxed at 12%. There is no tax-free threshold. The tax applies to all wages, salaries, and compensation earned in Palau. Employers are required to withhold the tax from employee wages.
| Income Range (USD) | Tax Rate |
|---|---|
| $0 – $8K | 6% |
| $8K+ | 12% |
Filing Deadline
April 15 for individual annual returns
Residency Rule
All individuals earning income in Palau are subject to the wage tax regardless of residency status. There is no formal distinction between resident and non-resident taxation for wage tax purposes.
How Palau Income Tax compares
Palau’s top personal income tax rate of 12% is the 164th highest of 203 countries TaxAtlas tracks, below the global average of 27.7% and Oceania’s regional average of 20.1%.
