Our guide to Payroll in Bermuda

Investing in Bermuda

The government of Bermuda (GOB) welcomes foreign direct investment (FDI). Bermuda’s economy is almost wholly dependent on FDI which derives primarily from the influx of international businesses – principally insurance, reinsurance, and financial services – with a small contribution from the tourism sector

General Information

Full Name: Bermuda

Population: 63,918 (World Bank, 2019)

Capital: Hamilton

Major Languages: English

Monetary Unit: Bermudian dollar

Main Exports: Planes, helicopters, petroleum gas, packaged medicaments, liquor and fruit juice

GNI per Capita: US $86,600 (World Bank, 2019)

Internet Domain: .bm

International Dialing Code: +1

Registrations and Establishing an Payroll Entity

A foreign company is required to have a legal entity in Bermuda in order to process a Bermuda payroll.

Banking

It is not mandatory to make payments to employees and authorities from an in-country bank account.

Working Week

The working week in Bermuda is Monday to Friday. The majority of businesses operate from 9 am to 5 pm, with one hour for lunch.

Employment Law

Holiday Accrual / Calculations

Employees are entitled to a period of 2 weeks of annual vacation after completing the first year of employment and are entitled to a week’s wages for each week of their annual vacation, which is paid in advance of the vacation.

Employees are entitled to receive full payment for public holidays, unless the employee does not work on his working day immediately preceding and his working day immediately following the public holiday. If an employee is required to work on a public holiday, he/she will be entitled to be paid at least one and a half times the employee’s normal hourly wage.

Maternity Leave

Employees are entitled to 13 weeks of paid leave, provided they have worked for the employer for one continuous year. Employees who have not worked for one full year, are entitled to 13 weeks of unpaid leave.

Paternity Leave

Employees are entitled to 5 days of paid paternity leave, provided they have worked for one continuous year by the expected date of birth. Employees who have not worked for a full year will be entitled to five days of unpaid leave.

Sick Leave

Employees are entitled to 8 days of sick leave with pay after the first year of continuous employment except that the employee will not be entitled to more than two consecutive days unless he provides the employer with a doctor’s certificate.

National service

Not applicable

Minimum wage

Current minimum wage: $16.40 per hour

Proposal 2025: will be between $16.81 and $17.23.

Tax, Employee Provident Fund, Social Security & Human Resource Development

Individual Income Tax (Taxes on Employment Income)

The tax year runs from 1st April to 31st March.

Payroll Tax

Taxable remuneration includes the sum of wages/salaries and benefits paid in cash or in-kind to employees, self-employed persons, and deemed employees for services provided in Bermuda. The remuneration of a self-employed person or a deemed employee is the total amount taken out of his business for personal use. Taxable Remuneration is capped at $1,000,000 per annum per person and is taxed in two portions - the Employer portion and the Employee portion. Foreign contractors and subcontractors in Bermuda must also pay Payroll Tax.

Payroll tax is paid quarterly on form PR1 and must be paid within 15 days of the end of each quarter (Jan-Mar, Apr-Jun, Jul-Sept, and Oct-Dec).

E-Tax

All Exempted Companies and companies with annual remuneration greater than $200,000 must submit Payroll Tax online at www.etax.gov.bm. Penalties will be levied where tax is not submitted in the required format. To register please click here. The Office of the Tax Commissioner encourages all taxpayers to e-file for fast and easy reporting.

Employer Portion

The employer is required to pay tax on gross taxable remuneration as defined in the Payroll Tax Act 1995.

Employee Portion

The employee portion of the payroll tax is a separate amount and must be calculated separately from the employer portion.

Employers have the option to deduct the employee portion of the payroll tax from their employees, however the responsibility to pay the full amount of tax (employer and employee portion) to the Office of the Tax Commissioner still rests with the employer.

Social Security

This tax is a fixed amount of BMS$75.30 (2025) per employee per week – where weeks are based on the number of Mondays in the month. The employer pays 50% and the employee pays 50% for employees between the ages of 16 to 64. For employees 65 and over, only the employer payment is due.

The employer is billed monthly based on the number of employees registered and this bill must be paid by the last Friday of that month.

Pension

Employers must hire a pension plan provider. Employer and employee pay the same rate – 5% of pensionable earnings.

Payroll

There are no restrictions in the law or further procedures required to provide online payslips in Bermuda.

Reports

Payroll reports must be kept for at least ten years.

New Employees

The employee must have a social insurance number that has to be obtained before working at and after the age of 18.

Leavers

There are no legislative specifications regarding the time scale for an employee’s final payment, however, the employer must ensure all records are up to date with payment to social insurance payment/pension. The employer must also produce a termination statement.

Employee Benefits

Expenses

The local legislation does not offer any other specific benefits beyond the statutory ones.

All elements such as general expenses, car mileage and company cars will be incorporated based on the company policies and how companies normally choose to pay them.

Visas & Work Permits

Bermuda does not issue work visas for those seeking employment in Bermuda. Instead, a work permit from the Bermuda Government, issued to a Bermuda immigration-approved Bermuda-registered and Bermuda-operating employer, not employee, is required by all non-Bermudian applicants for the specific full time or limited period or consulting or representative or pastoral (religious) position they accept from a specific local employer - and every time they change jobs.

• Payroll Tax applies to all residents working in Bermuda, including expatriates
• Employers must manage multiple layers of compliance: payroll tax, social insurance, pension contributions
• Bermuda operates a high wage, high cost employment market, especially in international business
• Minimum wage is $16.40/hour, with proposals in 2025 to increase to $16.81–$17.23/hour
  
• All non-Bermudians require an employer-sponsored work permit before commencing employment
  
  

Further Information

For more information, or assistance with Bermuda Tax enquiries 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.