Payroll Tax, levied under the Payroll Tax Act 1995 and the Payroll Tax Rates Act 1995, is a tax on all employers, self-employed persons, and deemed employees on the remuneration paid in their business.
Taxable remuneration includes the sum of wages/salaries and benefits paid in cash or in kind to employees, self-employed persons, and deemed employees as a result of services provided in Bermuda. The remuneration of a self-employed person or a deemed employee is the greater of his actual or notional remuneration up to a maximum of $900,000 per person. Foreign contractors and subcontractors in Bermuda must also pay Payroll Tax. Payoll Tax is applied based on a progressive tax rate structure.
Due date for Bermuda Payroll Tax
Payroll Tax must be paid in Bermuda on 15 January, 15 April, 15 July, and 15 October every year. All Exempted Companies and companies with annual remuneration greater than $1,000,000 must submit Payroll Tax via the e-tax facility.
Exemptions from Payroll Tax
The following groups are exempt from Payroll Tax in Bermuda:
- A person is not considered an employee if he is under 16 years of age or is employed by an employer for 16 hours or less in any one calendar month. (The 16-hour provision does not apply to self-employed persons.)
- Students on weekends or vacation employment, as well as certain lay-off allowances, are excluded from taxable remuneration.
- Tax is not charged for Bermudian employees on training schemes that have been approved by the National Training Board. Submit an Application for Approval of a Training Scheme to the Office of the Tax Commissioner along with a complete description of the Scheme to get your training scheme approved for an exemption.
- There’s no Payroll Tax for employees who care for a person with a physical or mental disability at that person’s home. To receive this exemption the Office of the Tax Commissioner reviews and processes the application for the Minister of Finance’s approval. A letter seeking for the exemption must be submitted to the Office of the Tax Commissioner together with the following information and supporting documents:
- Name of the person being taken care of
- Name of the caregiver
- Employment terms and conditions
- Duration of the employment (start date, end date), if determinable
- Work permit of the caregiver, if applicable
- Doctor’s certification of the patient’s illness or incapacity or if they may require 24-hour care
- Employer contributions to approved pension, life insurance, and health insurance schemes are exempt from payroll tax. Send completed Life Insurance Scheme Exemption Forms or Retirement Scheme Exemption Forms to Office of the Tax Commissioner for approval. Applications for Health Scheme Approval can be obtained from your health scheme provider. Employers will be notified by the Office of the Tax Commissioner once a scheme has been vetted and will be issued with a certificate of approval.
Get help with Payroll Tax
The Office of the Tax Commissioner holds Payroll Tax information seminars every quarter in order to instruct taxpayers on how to file tax returns manually and online through our e-tax website. Seminars are generally held the first week of January, April, July and October. To register for a tax seminar please contact the Office of the Tax Commissioner.