Bermuda

Social insurance

Bermuda’s contributory pension scheme requires employers to make monthly contributions to the Contributory Pensions Fund for every employee above 18 years of age for each week in which the employee works more than four hours. Employers must ensure that each qualifying employee registers with the department and obtains a social insurance number. Civil and criminal penalties may apply to employers for failure to register or who fail to make contributions for each qualifying employee.

Employees contribute a matching sum via weekly payroll deduction, subject to certain exceptions. Full time students under age 26 who are employed during holidays, weekends and summer breaks, and their employers, are fully exempt from social insurance contributions. Employees over the age of 65 are exempt from contributing their half, however the employer must still contribute their portion.

The current total contribution per employee per week is BMD 78.50, with the employer contributing BMD 39.25, and the employee contributing BMD 39.25. Self-employed individuals must pay both the employer and employee portions.

Expatriate and other employees who pay into the system but fail to qualify for a pension due to insufficient contributions may apply at age 65 for a refund of the total value of the contributions made on their behalf, including both employer and employee contributions.

Payroll tax

Bermuda imposes a payroll tax on employers at a rate determined by employer category or total annual payroll. See the Other taxes section in the Corporate tax summary for more information.

Value-added tax (VAT) 

There is no VAT or sales tax in Bermuda.

Property taxes

See the Other taxes section in the Corporate tax summary for more information in relation to property taxes.

Vacation rental tax

See the Other taxes section in the Corporate tax summary for more information in relation to vacation rental taxes.

Customs duties

Customs import duties are imposed on almost all goods arriving on the island at varying rates. Passengers arriving to Bermuda are entitled to a duty-free allowance of BMD $300 for residents and BMD $50 for non-residents on accompanied goods upon landing. Typically, customs import duties are assessed at 25% for goods in excess of the allowance, however rates may vary depending on the nature of the goods.

Individuals relocating to Bermuda may qualify for duty relief under the Transfer of Residence Allowance in respect to their personal and professional goods. To qualify, the goods must have been in the possession of the individual for at least six months prior to importation and arrive within 90 days before or after the individual establishes residence in Bermuda.

Excise taxes

There are no excise taxes imposed in Bermuda.

Transfer taxes

There is no transfer tax imposed in Bermuda.

Stamp duty

Bermuda imposes stamp duty on a wide variety of legal instruments, such as transfers of property, deeds, and rental agreements. Rates vary according to the type of instrument and its value; these rates are periodically updated by Parliament.

Foreign currency purchase tax

There is a foreign currency purchase tax imposed at the rate of 1.25% on foreign currency purchased by a Bermuda resident from a local bank.