Cayman Islands - Special considerations for short-term assignments

Special considerations for short-term assignments

Taxation of international executives

Related content

Residency rules

Payroll considerations

Taxable income

Additional considerations

For the purposes of this publication, a short-term assignment is defined as an assignment that lasts for less than one year.

Residency rules

Are there special residency considerations for short-term assignments? 

The Cayman Islands does not have income tax and thus there is no domestic concept of residency for tax purposes.

Payroll considerations

Are there special payroll considerations for short-term assignments?

The Cayman Islands does not have income tax so income tax withholding does not apply.

Pension requirements

Under the Cayman Islands’ National Pensions Law (Pensions Law) every employer must provide a pension plan for every person working for the employer,including expatriates who have been working for a continuous period of nine months, in the Cayman Islands. Partners, owners, and directors must also be covered by the pension plan. In almost all instances the pension plan is to be a registered Cayman Islands pension plan. 

A person is treated as working in the Cayman Islands if:

  • he/she reports to work to an office of their employer located in the Cayman Islands or 
  • he/she are normally resident in the Cayman Islands and is paid from an office which is situated in the Cayman Islands.
Full and part-time employees are required to be covered, as are casual employees, probationary staff, and those employees on short-term contracts.
Where an employee is employed by more than one employer, each employer shall be liable to pay contributions to a pension plan for that employee on the employee’s earnings with that employer.


The contributions are related to total earnings. Earnings include salary, wages, leave pay, fees, commission or gratuity, as well as bonus payments that exceed 20 percent of basic pay. Earnings do not include severance payments, retirement long service recognition payments, and health insurance premiums that are paid by the employer. Persons earning more than KYD60,000 are not required to make pension contributions on the amount above KYD60,000.

  • Every self-employed person must contribute a sum equivalent to 10 percent of his/her earnings.
  • Every employee must have contributions paid in respect of them by their employer.
  • That employee shall not be required without their consent to pay more than 5 percent of their earnings.
  • Their employer may not contribute less than 5 percent of that employee’s earnings.

Late contributions will be subject to interest. The employee’s contributions must be deducted at regular intervals and together with the employer’s contribution paid directly into the pension fund. Contributions must be made within 15 days of the last day of the month in which the contributions were due.

Returning to the home country

If the member becomes a non-resident or is an expatriate leaving the Cayman Islands, the member may elect to apply for a refund. In general, the pension’s law states that refunds are NOT allowed from a pension plan. In the event that a member’s account is under KYD5,000, the pension law gives the Trustees of the pension plan the discretion to pay out a refund and to set the conditions under which a refund may be paid.

In general, a trustee may pay a refund if all of the following are true.

  • The value of the member’s pension account is less than KYD5,000.
  • The member’s employment is terminated
  • The member no longer resides in the Cayman Islands. A waiting period and/or proof of non-residency may be required (that is a work visa, a current utility bill in the member’s name from their new address, sworn affidavit of non-residency, and so on).

If the value of the member’s account is greater than KYD5,000, they may transfer their account (with the Superintendent of Pensions’ approval) to a retirement account in another country. Otherwise, the Pensions Law requires a two-year waiting period before the member’s pension can be paid out in a lump sum.

A person is deemed to have ceased to be a resident in the Cayman Islands when they have been absent from the Cayman Islands for a period of six months or more. When calculating a period of absence, any periods of residence in the Cayman Islands for a continuous period of less than three months will not be taken into account.

In any event, the member’s pension cannot be paid out or transferred until their employer makes the final contribution to their account. This may be six weeks or more after the member has stopped working. As a result a refund or transfer may take three months or more.

Further information is available on the National Pensions Office Web site. Copies of the National Pensions Law can be purchased from the Legislative Assembly in George Town. There are a number of supplemental documents; however, the two primary documents are The National Pensions Law (latest revision) and the National Pensions (General) Regulations (latest revision).

The Legislative Assembly can be contacted at:

Tel. +1 345 949 4236

Fax +1 345 949 9514

Taxable income

What income will be taxed during short-term assignments?


Additional considerations

Are there any additional considerations that should be considered before initiating a short-term assignment in the Cayman Islands?

All foreign nationals must obtain work permits through their employer in order to work in the Cayman Islands. Individuals cannot be in Cayman while their work permits are being processed. Permits are issued and are generally renewable for periods of one to three years, with a term limit of seven years in place for most employees, such as those not designated as Key Employees. The permits are normally granted provided there is not a suitable local candidate for the position for which the permit is applied (ascertained through running recruitment ads in local newspapers and/or through the Employment Relations Department). Employers are required to pay the work permit fees in addition to repatriation fees and work permit dependent(s) fees, if applicable.

© 2016 KPMG, a Cayman Islands partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International cooperative. (“KPMG International”) a Swiss entity. All rights reserved.

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