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Hiring in Bermuda
Bermuda is a British overseas territory. Hamilton is the capital and the largest city of Bermuda. Tourism and Offshore financial services are the main industries of Bermuda, whereby offshore banking is the largest sector and the primary driver of economic growth. Bermuda’s main trading partners are the United States, Denmark, Canada and the United Kingdom. Global PEO or Employer of Record (EOR) play a pivotal role in providing companies with services related to hiring employees, and ensuring compliance with Bermuda’s legal and tax regulations. Employment regulations including probation, holidays and termination are covered by the Labor Code. The labor code stipulates that employees are entitled to 2 weeks of annual leave. Income taxes are not imposed on individuals in Bermuda. Therefore, Bermuda is essentially a tax haven. Global PEO’s or Employer of Record (EOR) facilitate companies by ensuring compliance with Bermuda’s Labor Code and tax laws.
statutory labor requirements
Probation Period
- Length of the probationary period is enclosed in an employment contract
- It is usually 3 months
Annual Leave
- An employee shall be entitled to a period of two weeks’ annual vacation leave after he has completed
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- the first year of continuous employment; and
- each subsequent year of continuous employment
Public Holidays
- New Year's Day (1st January)
- Good Friday (10th April)
- Bermuda Day (29th May)
- National Heroes' Day (15th June)
- Emancipation Day (of Bermuda) (30th July)
- Somers Day (31st July)
- Labor Day (7th September)
- Armistice Day (11th November)
- Christmas Day (25th December)
- Boxing Day (28th December)
Maternity Leave
- Women continuously employed one year or longer with an organization will be entitled to 13 weeks of paid leave, up from the current eight weeks of paid and four weeks of unpaid leave.
- Employees who don't fulfill the minimum service criteria can take 13 weeks of unpaid leave, up from eight.
Paternity Leave
- Fathers with at least one year's continuous employment by their baby's expected birth date will be entitled to five consecutive days of paid leave.
- Fathers must use the leave within 14 weeks of the birth and can take only one paternity leave in any 12-month period.
Sick Leave
- Employees are entitled to eight days’ sick leave with pay after the first year of continuous employment except that the employee will not be entitled to more than two consecutive days unless he provides the employer with a doctor's certificate.
Work Hours
- Typically, employees in Bermuda work a 40-hour week, from Monday through Friday from 9 a.m. to 5 p.m. including an hour's break for lunch (i.e., 35 paid hours).
Overtime
- An employee who works in excess of 40 hours a week is entitled to be paid at the overtime rate of 1.5 times his normal hourly wage.
Notice Period
- Employees are entitled to at least one week's notice if they are paid on a weekly basis, two weeks' notice if they are paid every two weeks, and in other cases, one month's notice.
- If the contract stipulates a greater amount of notice, the longer notice period will apply
Severance
- Severance Payment: Under the Act an employer is required to make a lump sum severance payment equal to:
-
- two weeks’ wages, for each completed year of continuous employment up to the first ten years; and
- three weeks’ wages for each completed year of continuous employment thereafter, up to a maximum of 26 weeks’ wages (i.e. 6 months).
- Under the Act an employee is entitled to a written itemized pay statement before the payment of any severance entitlement.
- An employee’s employment contract may provide for other payments in addition to those provided under the Act in the event of redundancy.
13th / 14th Month Pay
- No
- There is no statutory requirement to pay the 13th or 14th month salary.
- It does not seem customary.
- Workers are entitled to two weeks holiday after working for a year.
income tax
- Income taxes are not imposed on individuals in Bermuda
deductible expenses
Since income taxes are not imposed on individuals in Bermuda, deductions from income are not relevant in the context of Bermuda taxation.
immigration
- All persons must obtain specific permission by or on behalf of the Minister of Home Affairs responsible for immigration if they are to engage in gainful occupation in Bermuda, unless they are the following:
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- A Bermudian
- A spouse of a Bermudian
- A widow or widower of Bermudian
- A permanent resident
- Prior to making an application for a Standard Work Permit in an open job category, employers must demonstrate that they have made a bona fide attempt to recruit a suitably qualified Bermudian
- If no qualified and interested Bermudians are available, the employer may apply for a work permit to employ a non-Bermudian unless the position is in a closed category.
- Work permit applications must be made in writing by the employer and addressed to the Chief Immigration Officer at the Department of Immigration.
- A Global Work Permit allows a person who is already employed by a global company in another jurisdiction to transfer to the Bermuda office without the requirement to advertise the position.
- The employee must occupy a senior position within the company.
- To qualify for the Global Work Permit, the following conditions must be satisfied:
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- The company must demonstrate that the Global Work Permit holder is not being transferred to fill a vacancy or a pre-existing position in Bermuda.
- The company must demonstrate that the employee has been employed within the organization for at least one year before transferring to the Bermuda office or provide specific reasons for transferring an employee with less than one year of service.
- In addition, a Global Work Permit is automatically approved for an individual who earns at least BMD125,000 per year.
- Applicants earning less than BMD125,000 a year are considered on a case-by case basis, and approval depends substantially on demonstrating that the addition of the Global Work Permit holder will add value to Bermuda.
- A Global Entrepreneur Work Permit is issued for a one-year period for an individual to work and reside in Bermuda with respect to an exempted company or Section 114B startups.
- Work activities may include the following:
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- Business planning
- Seeking appropriate government or regulatory approval(s)
- Meeting compliance
- Financial requirements
- Raising capital
- To apply for a Global Entrepreneur Work Permit, a letter of application must be sent to the Department of Immigration justifying the request, together with a letter from a Bermudian or Bermuda business services company verifying the intent of the applicant and a completed form.
- The Minister of Home Affairs grants a permit if the Minister is satisfied that the applicant is a bona fide investor or business person that is likely to domicile a company in Bermuda.
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Type of Visa/Permit |
Documentation |
Validity |
Eligibility |
|
Standard Work Permit |
|
1 to 5 years |
|
|
Global Work Permit |
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1 to 5 years |
|
|
Global Entrepreneur Work Permit |
|
1 year |
|
value added tax
There is no VAT or sales tax in Bermuda.
withholding tax
- There are no withholding taxes on dividends, interest, royalties, and fees for technical services.
termination
An employee’s contract of employment shall not be terminated by an employer unless there is a valid reason for termination connected with
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- the ability, performance or conduct of the employee; or
- the operational requirements of the employer’s business
- On the termination of a contract of employment, an employer, if so requested by his employee, shall provide the employee with a certificate of termination indicating
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- the name and address of the employer;
- the nature of the employer’s business;
- the length of the employee’s period of continuous employment;
- the capacity in which the employee was employed;
- the wages and other remuneration payable at the date of termination of the contract;
- where the employee so requests, the reason for the termination.
- Employees are entitled to at least one week's notice if they are paid on a weekly basis, two weeks' notice if they are paid every two weeks, and in other cases, one month's notice.
- If the contract stipulates a greater amount of notice, the longer notice period will apply.
- Severance Payment: Under the Act an employer is required to make a lump sum severance payment equal to:
-
- two weeks’ wages, for each completed year of continuous employment up to the first ten years; and
- three weeks’ wages for each completed year of continuous employment thereafter, up to a maximum of 26 weeks’ wages (i.e. 6 months).
- Under the Act an employee is entitled to a written itemized pay statement before the payment of any severance entitlement.
- An employee’s employment contract may provide for other payments in addition to those provided under the Act in the event of redundancy.
statutory benefits
- These are mandatory benefits as postulated by law
- These include probationary period, annual leave, public holidays, sick leave, maternity leave, paternity leave, overtime pay, notice period, and severance pay
- Statutory benefits also include social security benefits
|
Statutory Benefits |
|
Probationary Period |
|
Annual Leave |
|
Public Holidays |
|
Maternity Leave |
|
Paternity Leave |
|
Sick Leave |
|
Overtime Pay |
|
Notice Period |
|
Severance Pay |
|
Social Security Benefits |
payments and invoicing
Since income taxes are not imposed on individuals in Bermuda, tax returns are not required to be completed for individual income tax compliance purposes.
employee accruals
| Christmas Bonus% | 0% |
| Christmas Bonus Over Vacations % | 0% |
| Severance per Year % | Employees are entitled to severance pay that equals 2 weeks of pay after completion of 1 year of service (2.73% of annual salary) |
| Vacations % | An employee shall be entitled to a period of two weeks’ annual vacation leave (4.16% of annual salary) |
| Notice % | Employees are entitled to 30 days of notice period for one year of service or more (8.24%) |
| Christmas Bonus Over Notifications% | 0% |
| Vacations Plus% | 0% |
| Total percentage of Salary (yearly) | The total employment accruals as a percentage of salary per anum are equal to 13.81% |
employer accruals
Additional information (Country Accruals)
| Social Insurance |
1,868.00 |
| Severance per year of service |
3.84% |
| Description |
Bermuda’s contributory pension scheme requires employers to make monthly contributions to the Contributory Pensions Fund for |
Employer Accruals Additional information
| Employment Accruals | ||
| Annual Leave | An employee shall be entitled to a period of two weeks’ annual vacation leave | This equals 3.84% (2/52 weeks) of annual income |
| Maternity Leave | Women continuously employed one year or longer with an organization will be entitled to 13 weeks of paid leave, up from the current eight weeks of paid and four weeks of unpaid leave. | This equals 3.56% (13/52 weeks) of annual income |
| Paternity Leave | Fathers with at least one year's continuous employment by their baby's expected birth date will be entitled to five consecutive days of paid leave. | This equals 1.36% (5/365 days) of annual income |
| Sick Leave | Employees are entitled to eight days’ sick leave with pay after the first year of continuous employment | This equals 2.2% (8/365 days) of annual income |
| Overtime | An employee who works in excess of 40 hours a week is entitled to be paid at the overtime rate of 1.5 times his normal hourly wage. | Normal hourly rate is around 9.93 BMD. Overtime is paid at an additional 4.96 BMD. |
| Severance | Under the Act an employer is required to make a lump sum severance payment equal to: • two weeks’ wages, for each completed year of continuous employment up to the first ten years |
This equals 3.8% (2/52 weeks) of annual income |
| Social Security | The current total contribution per employee per week is BMD 71.84. The employer portion is BMD 35.92 and the employee portion is BMD 35.92. | This equals 35.92 per week and |
