Bahamas

Registrations and Establishing an Entity

To run payroll in the Bahamas, companies must register with local authorities. The process includes reserving a company name, filing incorporation documents, opening a corporate bank account, and obtaining a business licence. Registration with the National Insurance Board (NIB) is also mandatory for all employers and employees.

Banking

A local bank account is typically required for business operations, though not mandated for payroll or tax purposes. Banks are open Monday to Thursday, 09:30 to 15:00, and Friday until 16:30. ATMs and online services are widely available.

Working Week

The standard workweek is 40 hours over five days. Overtime must be paid at a minimum of 1.5 times the regular hourly rate.

Employment Law

Holiday Accrual
Employees are entitled to two weeks of paid vacation after one year of continuous employment.

Maternity Leave
Female employees are entitled to 12 weeks of maternity leave, with at least 6 weeks to be taken after childbirth.

Paternity Leave
There is currently no statutory paternity leave in the Bahamas.

Sick Leave
Employees are entitled to paid sick leave after six months of continuous service.

National Service
There is no requirement for compulsory national service in the Bahamas.

Tax & Social Security

The Bahamas does not impose personal income tax, capital gains tax, or inheritance tax.

National Insurance Contributions (NIB)

Self-employed individuals are responsible for the full 9.8% contribution. NIB covers pensions, sickness, maternity, and survivors' benefits.

Payroll

It is legally acceptable to provide employees with online payslips. Pay statements must be provided in Bahamian dollars and should reflect hours worked, rate of pay, and any deductions.

Reports

Payroll records and accounting documentation must be retained for at least five years from the date of the transaction.

Payslip Example

(Local format example not included in source)

Reporting

Employers must file contributions with NIB and renew business licences annually. Payroll summaries must align with labour and insurance regulations.

New Employees

All new hires must be registered with the NIB. Employers must provide written employment contracts and, for foreign employees, secure valid work permits.

Leavers

The notice period depends on the employee’s length of service. For example, one week’s notice is required for employees with under six months' service. Redundancy payments are required if the role is made redundant. Final pay must be settled in line with labour regulations.

Employee Benefits

The Bahamas has a national minimum wage of $260 per week. The law mandates equal pay for equal work. Many employers offer additional benefits, including pensions, housing stipends, and transportation allowances.

Expenses

Reimbursement for travel or business-related expenses is based on company policy. There are no statutory caps or specific tax regulations related to employee expense reimbursements.

Foreign nationals require a valid work permit before starting employment in the Bahamas.

• Short-Term Work Permit: For employment up to 90 days
• Annual Work Permit: Required for longer-term employment

The employer must sponsor the application and provide a letter of request, medical and police certificates, job advertisements, references, and evidence of the applicant’s qualifications.

Visa-free travel is allowed for nationals of the US, UK, Canada, and most Commonwealth countries for stays under 30 days.

There are no income tax declarations for employees; however, employers must comply strictly with NIB rules and work permit regulations. Government communications increasingly rely on electronic systems. Digital banking and outsourced payroll are widely supported, particularly in the tourism and offshore finance sectors.

Further Information

For more information, or assistance with Bahamas Tax inquiries please contact: gi@activpayroll.com

About This Payroll and Tax Overview

Please note that this document gives general guidance only and should not be regarded as an authoritative or complete statement of the law, regulations or tax position in any country. You should always seek specific advice for each specific situation. This document should not be relied upon as professional advice and activpayroll accepts no liability for reliance on its contents.