Information that will assist you in identifying compliance matters affecting your business travelers in Bermuda.
With the exception of the Payroll Tax (summarized below), there is no income tax, capital gains tax, or withholding tax in Bermuda. Tax revenue is derived primarily from the payroll tax, customs/import duties, real property tax, corporate services tax, and fuel taxes.
The activities of extended business travellers in Bermuda may result in Payroll Tax and/or social insurance obligations. Extended business travellers may be required to obtain a Bermuda work permit.
With the exception of the Payroll Tax (summarized below), there is no income tax, capital gains tax, or withholding tax in Bermuda.
Effective 1 April 2017, Payroll Tax is levied on every employer and self-employed person at graduated rates ranging from 6.0% to 10.25% (Employer portion) and 4.75 to 8.75% (Employee portion) of total remuneration paid, up to a maximum of $900,000 of remuneration per annum per person. The employer will remain responsible for the payment of both portions however they will have the option of deducting the employee portion in full or in part. The employer is responsible for calculating the full employee portion regardless of whether they deduct it from the employees or not.
The tax base consists of actual remuneration paid, given, or assessed by any employer or self-employed person to every employee or deemed employee. Remuneration includes any benefits derived by the employee/deemed employee or self-employed person as a result of his/her employment, whether paid in cash or in kind. The remuneration of a self-employed person or a deemed employee is the greater of his actual or notional remuneration.
Payroll Tax is not levied with respect to remuneration paid to individuals who are ordinarily employed outside Bermuda, provided that the period of employment in Bermuda (whether for one or more employers) does not exceed four consecutive weeks.
Every employer and self-employed person who is liable for tax must register with the Office of the Tax Commissioner within seven days of the end of the first tax period in which the person commences business. It is a criminal offence to fail to register. Foreign contractors/sub-contractors and professionals, who offer their services on a contract or fee basis, are also required to register and pay Payroll Tax on the value of those services performed in Bermuda.
Tax returns with full payment are due within fifteen days of the end of each period of three months commencing on the first day of April, July, October or January. Tax returns are available from the Office of the Tax Commissioner. Payroll Tax must be paid at the time that the tax return is filed. Tax returns filed late or underpaid are subject to a penalty.
Payroll Tax is levied on every employer and self-employed person at standard rates ranging from 6.0% to 15.5% of total remuneration paid, up to a maximum of $750,000 of remuneration per annum per person. Under certain circumstances, employers will recover a portion of the Payroll Tax (generally 6.0%) from employees.
Payroll tax is administered by the employer. Costs of the payroll tax can be passed along to employees, but all reporting is done at the employer level. Employees do not have any personal tax or administrative filings with regard to the payroll tax.
The Employer is responsible for remitting the payroll tax (quarterly), and for withholding and remitting the social insurance due (monthly).
Generally, all persons must obtain a work permit to engage in gainful occupation in Bermuda unless they are Bermudian (including a spouse of a Bermudian) or have been granted permanent resident status. However, there is no need for an employer to obtain a work permit to land a business visitor in Bermuda provided that:(i) the business visitor is in possession of a return ticket (as well as a valid multi-re-entry visa if the business visitor is a visa controlled national:(ii) the total length of the stay does not exceed twenty-one consecutive days; and (iii) the business visitor only undertakes certain activities prescribed by the Department of Immigration. Employers seeking to hire non-resident individuals who will make multiple visits to Bermuda over a period of time, staying no greater than thirty days for each visit, may apply for a periodic work permit. Periodic work permits may be granted for periods of one to five years. Employers may use short term work permits to employ individuals to work for periods of up to six months. At the conclusion of the term of the short term work permit, the holder will be expected to leave Bermuda, unless an extension has been sought within the proper processing period. Short term work permit holders will not normally be granted permission to reside and seek employment.