Alerts

Alerts

  • Effective 27 March 2017 The Department of Immigration, Corporate Services Work Permit Section team contact details change.  Please see the Work Permit Policy 2015 Section 1.2  for changes to the Finance and Business, Other and Hospitality team contact details.

Payroll Tax

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 $750,000 per person.  Foreign contractors and subcontractors in Bermuda must also pay Payroll Tax. 

Withholding Tax

Employers may withhold a statutory proportion up to 6 per cent from an employee’s salary.

Payroll Tax is administered under the authority of the Payroll Tax Act 1995 and the Payroll Tax Rates Act 1995.  

Find out about the different ways to pay taxes to the Government of Bermuda.

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.

Payroll Tax rates

The Payroll Tax rate is based on your business’s annual payroll. Payroll Tax is calculated as a percentage of total remuneration, including wages, salaries, and benefits, as reported on the tax return. The following table shows the rates based on payroll:

Annual payroll total, including exemptions Payroll Tax rate (per cent)

Where remuneration is > $200,000 p/qtr or above $1,000,000 p/a.

15.50%

Where remuneration is between $125,001 -$250,000 p/qtr or greater than $500,000 and up to $1,000,000 p/a

14.25%

Where remuneration is between $50,000 - $125,000 p/qtr or between $200,000 to $500,000 p/a.

12.25%

Where remuneration is less than $50,000 p/qtr or less than $200,000 p/a.

7.25%

Certain types of employers and employees have different tax rates, as outlined in the following table:

Type of employer Payroll Tax rate (per cent)
All Exempt undertakings 15.50%

Hotels or restaurants with an annual payroll of $200,000 and above

11.25%

Employees in special situations, including:

  • jury duty
  • on duty with the Royal Bermuda Regiment or Bermuda Volunteer Reserve
  • persons employed as farmers, fishermen, or horticulturists
  • hotel employees in December, January or February
  • retail establishments in the quarter January–March

8.25%

Bermuda Hospitals Board and the Corporations of Hamilton and St. George's

8.75%

Educational, sporting, or scientific institutions or societies.

7.25%

The Government, parish councils, government boards, Bermuda College, approved schools, registered charities, religious and cultural organizations, the Bermuda Festival Ltd., qualified taxpayers in an Economic Empowerment Zone for the first nine periods of establishing a business.

Remuneration paid to certain construction workers employed on development projects deemed to be of national importance and approved by the Economic Development Committee, provided that the remuneration paid to the employee is for direct construction labour for the approved development project only and that the employer is not in arrears with the payment of payroll tax.

6.00%

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.

Special Relief from Payroll Tax

The following groups are entitled to special relief from taxable remuneration of $600 per employee per quarter:

  • taxpayers paying 12.25, 14.25 or 15.5 per cent
  • taxpayers operating an hotel or restaurant and paying at 11.25 per cent

To quality, the employee:

  • must be on payroll at the end of the tax period
  • must have worked for the employer for a minimum of 180 hours in that quarter

Self-employed persons and deemed employees are not eligible.

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.

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