Global

Details

  • Service: Tax, Global Mobility Services
  • Type: Business and industry issue, Regulatory update
  • Date: 1/1/2014

 

Bermuda 

Bermuda does not have an income tax.


Bermuda does have a payroll tax which is actually levied on the employer. This is a tiered tax that is calculated based in the total annual remuneration paid out to the employees. It can be as high as 14% for those companies whose total payroll size is over $1M, and as low as 5.75% for approved schools, colleges and other government and religious bodies. Payroll taxes are to be paid out annually by the employer at the time of tax returns.


But if you are an employee, your employer will recover some part of the payroll tax from your salary which averages to about 5.25% subject to a present salary cap of $750,000. This is applicable for both Bermudians and non-Bermudians working on the island.


Key message

No income tax in Bermuda. There is payroll tax and social insurance which business travellers would not be subject to as long as they remain on home country payroll.


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Income tax

Bermuda does not have an income tax.


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The new weekly rate will be $64.14 - Employer portion $32.07 and Employee portion $32.07.


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Compliance obligations

Social insurance and payroll tax obligations are levied on the employer to remit.


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Other issues

A non-Bermudian resident may not look for a job without first obtaining permission from the Ministry of Economy, Trade, and Industry, Department of Labour and Training, Work Permits Section, unless exempted from work permit control by law.


The following groups of people are forbidden to seek employment in Bermuda:


  • Residential Certificate holders;
  • those with permission to reside in Bermuda on an annual basis;
  • non-Bermudian partners who are not fiancé(e)s, or married and do not already have work permits;
  • visitors to Bermuda.

Applicants from overseas must not visit Bermuda while a work permit application submitted on their behalf is being considered, unless prior permission has been obtained from the Ministry of Economy, Trade, and Industry, Department of Labour and Training, Work Permits Section.

Periodic and Temporary Work Permits

A person who is employed on a periodic work permit or on a temporary work permit is considered to be a visitor and not a resident. The law allows visitors to spend no more than six continuous months in Bermuda on any one visit.


A periodic permit may be valid for any period up to one year. It allows the person to enter Bermuda any number of times during that period of validity. If a person who would otherwise be accommodated with a periodic work permit is to spend more than six months in Bermuda at any one time, the employer should apply for a standard work permit.


A temporary work permit allows a person to work in Bermuda for up to three months continuously. A temporary work permit can only be extended once to bring the person up to his or her maximum permitted stay of six months in Bermuda. After that the person must either leave Bermuda or the employer should apply for a standard work permit.


Given his or her visitor's status, a person working in Bermuda on a periodic or temporary permit is not permitted to seek alternative employment with the same employer or with another. However, the current employer of such a person may apply to hire him or her on a standard work permit in the same job at which he or she worked on a periodic or temporary permit. Further, it should be noted that the normal application process for a standard work permit, including the requirements to advertise and to submit a chest X-ray and medical certificate, applies. Upon a standard work permit being granted in these circumstances, the employee's status will change from visitor to Bermuda resident.


 

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Contact

Will McCallum

Managing Director

KPMG Bermuda

+14412955063


Amy Gernant

Senior Manager - Tax

KPMG Bermuda

+14412955063

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