Payroll and Benefits Guide Northern Mariana Islands
Last updated: Mar 03, 2026
Contribution
| Employer Payroll Contributions | |
| 6.2% | Social Security (OASDI – Old-Age, Survivors, and Disability Insurance) |
| 1.45% | Medicare (Hospital Insurance) |
| 7.65% | Total Employer Costs |
| Employee Payroll Contributions | |
| 6.2% | Pension (Retirement) |
| 1.45% | Family and Maternity Benefits |
| 7.65% | Total Employee Costs |
Income tax
• Resident individuals: Progressive annual rates (same as U.S. federal rates):
• 10% on up to USD 11,600
• 12% on USD 11,601–47,150
• 22% on USD 47,151–100,525
• 24% on USD 100,526–191,950
• 32% on USD 191,951–243,725
• 35% on USD 243,726–609,350
• 37% on above USD 609,350
• Non-resident individuals: Taxed on CNMI-source income at the same progressive rates
• PAYE Withholding: Employers deduct tax from wages each pay period and remit by the due dates set by the CNMI Department of Finance
Employer taxes
Working Hours
Standard working hours: 40 hours per week, 8 hours per day
Overtime
The overtime provisions for private sector employees are primarily determined by the FLSA, which supersedes local law where it is more beneficial to the employee.
| Aspect | Regulation Details | Notes |
| Maximum Ordinary Hours | 40 hours per week. This is the standard maximum workweek set by the FLSA. | The CNMI Labour Code also sets the standard workweek at 40 hours for most employees. |
| Overtime Threshold | Overtime compensation is mandatory for all hours worked over 40 in a workweek. | Unlike some other jurisdictions, the FLSA generally does not require premium pay for working more than 8 hours in a day. |
| Maximum Overtime Cap | There is no statutory limit on the maximum number of overtime hours an adult employee may work. | The employer is simply required to pay the mandatory premium for all hours worked over 40. |
| Exemptions | Employees in certain executive, administrative, or professional roles who meet specific salary and duties tests are exempt from both minimum wage and overtime pay provisions (FLSA exemptions). | The CNMI utilizes the special FLSA salary level for U.S. territories when determining exemption status. |
Mandatory Overtime Pay Rates
The FLSA mandates a single minimum premium rate for all standard overtime.
| Day/Condition | Minimum Compensation Rate (Statutory) | Total Pay Rate | Notes |
| Standard Overtime (Beyond 40 hours/week) | 1.5 times the employee’s regular rate of pay (Time and a half). | 150% | This is the non-negotiable federal minimum rate. |
| Public Holiday/Weekend Work | No statutory minimum premium rate. | 100% (Normal Rate) | The FLSA does not require premium pay for work performed on weekends or public holidays; compensation is paid at the normal hourly rate, unless the employment contract or employer policy specifies otherwise. |
Compensation Method
-
Monetary Pay: The payment of the 3$150\%$ premium is mandatory.
-
Compensatory Time Off (Public Sector): While private sector employment is governed by the FLSA’s cash payment rule, certain government employees in the CNMI may be compensated with Compensatory Time (time off in lieu) at a rate of $1.5$ hours off for every $1$ hour of overtime worked.
Payroll
Payroll cycle is typically biweekly or monthly; wages paid on scheduled paydays set by employer.
13th Salary
Not mandatory; may be offered as a bonus at employer’s discretion.
Leave
Annual Leave (vacation)
There is no universal statutory requirement for private-sector annual (vacation) leave in the CNMI; the amount is generally determined by employer policy or contractual agreement. common practice is 5–15 days/year based on tenure.
Public Holidays
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 19 January 2026 | Monday | Martin Luther King Jr.’s Birthday | Standard holiday |
| 16 February 2026 | Monday | President’s Day | Standard holiday |
| 24 March 2026 | Tuesday | Commonwealth Covenant Day | |
| 3 April 2026 | Friday | Good Friday | Standard holiday |
| 25 May 2026 | Monday | Memorial Day | Standard holiday |
| 19 June 2026 | Friday | Juneteenth National Independence Day | Standard holiday |
| 3 July 2026 | Friday | Independence Day Holiday | Standard holiday |
| 4 July 2026 | Saturday | Independence Day | Standard holiday |
| 7 September 2026 | Monday | Labor Day | Standard holiday |
| 12 October 2026 | Monday | Commonwealth Cultural Day | |
| 4 November 2026 | Wednesday | Citizenship Day | |
| 11 November 2026 | Wednesday | Veterans Day | Standard holiday |
| 26 November 2026 | Thursday | Thanksgiving Day | Standard holiday |
| 8 December 2026 | Tuesday | Constitution Day | |
| 25 December 2026 | Friday | Christmas Day | Standard holiday |
Sick Days
The CNMI Labor Code does not mandate provision of sick leave for private-sector employees—such entitlements are usually determined by employer policy or collective agreements.
Maternity Leave
Maternity leave provides 6 weeks of unpaid leave to expecting mothers. They may use accrued paid leave if available.
Bereavement Leave
Typically 3–5 days for immediate family; not legally mandated.
Employer taxes
Termination
Termination Process
Employment in the CNMI generally follows the “at-will” doctrine, meaning employers or employees may terminate the relationship at any time, for any lawful reason, unless bound by a contract or collective agreement. Termination cannot violate anti-discrimination or retaliation laws, ensuring safeguards against wrongful or unsafe dismissal.
For foreign workers, employment contracts—such as the Nonresident Worker Employment Agreement (NRWEA)—commonly include detailed termination clauses, specifying allowed causes, notice, and any procedural requirements.
| Salary payment interval / date | Final payment on termination | Bank account/payment-method requirement |
|---|---|---|
| Wages must be paid at “regular intervals” as agreed in the employment contract; there is no publicly located CNMI law that fixes a maximum interval (e.g., “monthly by X day”) for all employees. | When employment ends, the employer is obliged to pay all wages and sums due under employment law. | The law requires payment of wages in legal tender or equivalent. |
Notice Period
There is no statutory notice period mandated under CNMI labor law for either at-will or contract-based terminations.
Contracts (particularly NRWEAs and indefinite or fixed-term agreements) often define their own notice requirements, ranging from immediate termination in serious misconduct cases to several days or weeks’ notice depending on the role and agreement terms.
Severance Pay
The CNMI has no statutory requirement obliging employers to provide severance pay, whether due to dismissal, redundancy, or resignation. Where severance is paid, it is typically governed by specific contractual provisions or collective bargaining agreements, and not by legislated standards.
Probation
There is no statutory limit on how long probation periods may last in the CNMI.. Employer practices generally align with U.S. norms, with 30 to 90 days being common. During this time, both parties can evaluate fit, with termination often allowed on shorter notice within the probationary window
Immigration
VISA
Foreign nationals must have valid U.S. work authorization to be employed in the CNMI. The main route is the CW-1 (CNMI-Only Transitional Worker) visa, available until December 31, 2029 under U.S. law. Employers initiate the process by petitioning USCIS, then the worker applies with supporting documents (passport, contract, certifications). Processing can take weeks to months and is subject to annual numerical caps.
Other U.S. visa types (H-1B, H-2B, etc.) may also apply depending on the role. Once approved, the worker must hold the visa/permit before starting employment. Employers must complete Form I-9 verification and often E-Verify.
Exemptions: U.S. citizens and nationals do not require a visa.
Minimum Wage
The CNMI does not set its own minimum wage; instead, it is aligned with the U.S. federal minimum wage, currently USD 7.25 per hour, and has been since 2015.
MINIMUM WAGE (PER MONTH)
VAT
There is no VAT or sales tax in the CNMI. Instead, the CNMI imposes a Gross Revenue Tax (GRT) on businesses, generally at 5% of gross receipts, subject to certain thresholds and exemptions. This is a business tax and not a direct tax on employees or wages.
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Public Holidays Calendar
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 19 January 2026 | Monday | Martin Luther King Jr.’s Birthday | Standard holiday |
| 16 February 2026 | Monday | President’s Day | Standard holiday |
| 24 March 2026 | Tuesday | Commonwealth Covenant Day | |
| 3 April 2026 | Friday | Good Friday | Standard holiday |
| 25 May 2026 | Monday | Memorial Day | Standard holiday |
| 19 June 2026 | Friday | Juneteenth National Independence Day | Standard holiday |
| 3 July 2026 | Friday | Independence Day Holiday | Standard holiday |
| 4 July 2026 | Saturday | Independence Day | Standard holiday |
| 7 September 2026 | Monday | Labor Day | Standard holiday |
| 12 October 2026 | Monday | Commonwealth Cultural Day | |
| 4 November 2026 | Wednesday | Citizenship Day | |
| 11 November 2026 | Wednesday | Veterans Day | Standard holiday |
| 26 November 2026 | Thursday | Thanksgiving Day | Standard holiday |
| 8 December 2026 | Tuesday | Constitution Day | |
| 25 December 2026 | Friday | Christmas Day | Standard holiday |
Questions & Answers