Bahamas Payroll & Tax Overview
A GUIDE TO DOING BUSINESS IN BAHAMAS 2016
Contents
1.0
Key Country Facts and Public Holidays
3
2.0
Business and Culture in Bahamas
4
3.0
Visas and Work Permits
5
4.0
Tax and Social Security
6
5.0
Compliance
7
6.0
Statutory Absence/Payments
8
8.0
About This Payroll and Tax Overview
9
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1.0 Key Country Facts and Public Holidays
1.1 Official Language
The official Language is English.
1.2 Currency
The official Currency is Bahamian dollar.
1.3 Country Dial code
The country dial code is +1-242
1.4 Country abbreviation
The country abbreviation is bs.
1.5 Statutory Filing Payment Methods
The Bahamas does not levy income taxes, but requires that employers and employees to contribute social tax amounts to the
National Insurance program.
1.6 National Minimum wage
N/A
1.7 Filing Deadlines
N/A
1.8 Fiscal year
The Bahamas' fiscal year runs from July 1 to June 30.
1.9 Time Zone
Eastern Time Zone UTC-05:00
2016
2017
Holiday
Holiday type
1 January
1 January
New Year’s Day
National holiday
10 January
11 January
Majority Rules Day
National holiday
25 March
25 March
Good Friday
National holiday
28 March
28 March
Easter Monday
National holiday
16 May
16 May
Whit Monday
National holiday
3 June
3 June
Labour Day
National holiday
10 July
10 July
Independence Day
National holiday
1 August
01 August
Emancipation Day
National holiday
25 December
25 December
Christmas Day
National holiday
26 December
26 December
Boxing Day
National holiday
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2.0 Business and Culture in Bahamas
2.1 Establishing as an Employer
All businesses must be licensed in the Bahamas. Non-residents who wish to conduct business in the Bahamas must obtain
approval from the Bahamian Investment Authority. Once an application and all supporting documents have been submitted to
the Bahamian Government, the turnaround time is about seven business days before approval is granted. A new business
license is a flat fee of BS$100. Fees for an existing business vary depending on the nature of the company.
2.2 Employment
In the Bahamas full time employment is eight hours a day, five days a week. No employee may work an excess of eight hours in
any day, or more than forty hours a week. Employees who work more than eight hours in a day result in overtime pay of time
and a half. If work is done on a public holiday the rate must be paid at two times the regular rate of pay.
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3.0 Visas and Work Permits
3.1 Visas
Foreign workers are entitled to the same rights as Bahamian citizens and generally are covered by the same tax and workplace
laws.
All foreign workers who wish to live and work in the Bahamas must receive a work permit.
3.2 Work Permits
Short-term/long-term visa:
In the Bahamas, there are two kinds of work permits, short term and long term work permits. Any non-Bahamian who wishes
to work in the Bahamas for no more than 90 days can apply for a short-term visa/permit. A non-Bahamian national who intends
on working in the Bahamas for more than 90 days should apply for a long-term visa. The short-term visa can be received in
about two weeks, whereas the long term visa can take up to four to six weeks to receive. For more information, please contact:
http://www.nib-bahamas.com/.
.
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4.0 Tax and Social Security
4.1 Tax
There is no personal income tax in the Bahamas. Employees do have to pay into national insurance funds and these
contributions fund the national benefits system. The employer must pay 5.9% of the employee’s wages to the social security
system in the Bahamas, and the employee contributes 3.9% (capped at BSD26000 pa).
The self-employed are subject to a rate of 8.8% of average insurable income depending on their class (with an annual cap of
BSD26000).
There is no tax-reporting year in the Bahamas, however wage withholdings for social security must be submitted to The
National Insurance Board no later than the 15th day of the following month. . For more information about contributions, please
visit http://www.nib-bahamas.com/.
4.2 Tax Registration
While companies are not subject to direct taxes, they are subject to a host of other indirect taxes and fees including; business
licence fee, registrations and import duties. Hotel guest tax, passenger tax, casino tax and business and hotel licensing fees.
Professional advice is recommended before a company is set up in country so that all indirect fees and taxes can be understood
and accounted for.
4.3 Social Security
Employers in the Bahamas must contribute to National Insurance, which is administered by the National Insurance Board (NIB).
Contributions pay for sickness, invalidity, maternity, retirement, death, and workers ‘compensation and unemployment
benefits.
Employers must withhold National Insurance contributions and make additional contributions for all workers, regardless of
nationality, legal status, if they are work schedule or length of service.
4.4 Other Taxes
While companies are not subject to direct taxes, they are subject to a host of other indirect taxes and fees including; business
licence fee, registrations and import duties. Hotel guest tax, passenger tax, casino tax and business and hotel licensing fees.
Professional advice is recommended before a company is set up in country so that all indirect fees and taxes can be understood
and accounted for.
Data Retention
Employers must retain all data for a minimum of 7 years
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5.0 Compliance
5.1 Employer Registration
Employers must register with the NIB by filing Form R.1. Employees are required to register themselves.
The tax is levied on wages, which generally includes basic pay, tips and gratuities. Bonuses, overtime and severance payments
generally are not considered income for the purposes of calculating social tax liability. Employers must calculate taxes for
employees paid on a commission basis, by assessing it on the average weekly or monthly wage the worker made in the prior
year for the period concerned.
Employers must make payments by the 15th of every month following the month in which wages were earned. Employers
must include a C10 Form along with all contributions.
Interest is assessed to payments made on or after the 1st of the month after contributions were due.
5.2 Starters/Registration
The Company registration is usually done by a lawyer. The company is incorporated on the date that the incorporation
documents are submitted to the Companies Registry. A registration fee of USD 330 is paid at the Registrar General’s office (USD
300 for the Memorandum and USD 30 for the articles of association). Once the final incorporation certificate is ready, an
additional fee of USD 4 per page is charged to obtain a certified copy of the memorandum and articles of association.
5.3 Leavers/De-registration
Employers must provide employees with the following amounts of notice and severance pay before terminating an
employment contract:
•
•
•
employed at least six months, but less than one year: one week's notice and one week's salary,
employed at least one year: two weeks' notice and two weeks' basic pay for each year of service up to a total of 24
weeks pay,
employed in a supervisory or managerial position: one month's notice and one month's basic pay for each year of
service up to a total of 48 weeks' pay.
Employers must make payments for all unused annual leave earned the year in which the employee is terminated upon
termination. Notice must be given orally or in writing and employers may provide employers with compensation for the notice
time in lieu of the notice itself.
Employees terminating an employment contract must provide two weeks' notice if they have been employed at least one year
and less than two. Employees employed at least two years must provide four weeks' notice.
Both parties may terminate the employment contract with severance pay or notice if there is a fundamental breach of contract.
Employers dismissing employees due to redundancy have the following different notice and severance payment requirements:
•
•
For those employed one year or more: two weeks' notice, and two weeks' pay per year of service up to 24 weeks' pay;
for those employed in a supervisory or managerial position: one month's notice, and one month's basic pay for each
year up to 48 weeks' pay.
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6.0 Statutory Absence/Payments
6.1 Annual Leave
The Bahamas entitles employees to annual leave, giving them ten paid days off a year after one to five years of employment
and fifteen days a year for over ten years of employment.
6.2 Sick leave
There are also benefits for those who are unable to work due to ill health. A $200 per month payment is available to those who
have been certified as permanently unable to work. Sickness assistance is for those who are only temporarily unable to work or
who have not made enough contributions to qualify for sickness benefit. Sickness benefit is paid when a minimum number of
contributions have been made and is paid at 60% of the claimant’s average wage. This can be claimed for a maximum of 40
weeks.
6.3 Maternity leave
There is a maternity benefit which may be paid for up to 13 weeks depending upon the health of the claimant. It is dependent
upon a minimum number of contributions and is a minimum payment of around $62 and a maximum of around $266 per week.
Women who qualify for this can also claim a maternity grant, which is a one off payment of $400.
6.4 Benefits
There are a number of other benefits which can be paid such as disablement benefit, retirement benefit, death benefit and
funeral benefit. Making national insurance contributions also entitles a worker to free medical healthcare if the condition is
work-related.
Unemployment benefit is paid to those who are actively seeking work and it is subject to a minimum number of contributions
into the national insurance scheme. The minimum benefit payable is around $62 and the maximum is $200 per week. Those
who have been self-employed are not eligible.
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8.0 About This Payroll and Tax Overview
8.1 Copyright
All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means,
including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the
publisher.
8.2 Disclaimer
Every effort has been made to ensure that all information in this booklet is correct at the time of publication. This information
should be used as reference only and not as a sole source of decision making.
8.3 The Global Payroll Association
Global Payroll Association is the first international payroll association of its kind. We are a central hub for ‘all-things payroll’. A
one-stop-shop supplying comprehensive directories, interactive training and in-depth country resources. We are here to help
you with your global payroll needs, no matter how complex, connecting you with the world’s leading experts and offering a
forum to network with other like-minded global professionals.
Global Payroll Association welcomes international payroll, HR and financial professionals of all levels.
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