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Everything an employer should know about hiring in
Bonaire Sint Eustatius and Saba (BES-Islands)
Hiring in Bonaire, sint eustatius and saba (bes-islands)
Bonaire, Sint Eustatius, and Saba (BES Islands) are special municipalities of the Netherlands that are located in the Caribbean. They are classified as public bodies in the Netherlands and as overseas countries and territories of the European Union. Tourism is the main sector and driver of economic growth in BES Islands. Global PEO or Employer of Record (EOR) play a pivotal role in providing companies with services related to hiring employees, and ensuring compliance with BES Islands’ legal and tax regulations. Employment regulations including probation, holidays and termination are covered by the Labor Code. The labor code stipulates that the probation period is for a maximum of two months and has to be agreed upon in writing. Residents of the BES-Islands are taxed on their worldwide income. Nonresidents are taxed on BES-Islands source income. Global PEO’s or EOR facilitate companies by ensuring compliance with the labor code and tax laws.
statutory labor requirements
Probation Period
- The probation period is for a maximum of two months and has to be agreed upon in writing.
Annual Leave
- Every employee is entitled to a number of vacation days per year equal to at least three times the contracted number of working days per week, with a minimum of fifteen days per year for employees who work six days per week.
Public Holidays
- New Year's Day (1st January)
- Good Friday (10th April)
- Easter Sunday (12th April)
- Easter Monday (13th April)
- King's Birthday (27th April)
- Labor Day (1st May)
- Ascension Day (21st May)
- Whit Sunday (31st May)
- Christmas Day (25th December)
- 2nd Day of Christmas (26th December)
Maternity Leave
- Female employees are entitled to 16 weeks of paid maternity leave
Sick Leave
- In the event an employee is unable to perform his/her labor due to sickness (that is not intentionally caused by the employee), the employer is obligated to continue payment of (100% of) the employee’s salary during a relative short period of time (unless otherwise stipulated in the labor agreement).
Notice Period
- The mandatory notice period to be taken into by an employer is:
-
- In case of an employment of less than five years: one month;
- In case the employee has been employed more than five but less than ten years: two months;
- In case the employment has lasted longer than ten years but less than fifteen years: three months;
- In case the employment has lasted more than fifteen years: four months.
income tax
- Residents of the BES-Islands are taxable on their worldwide income.
- Nonresidents are taxable only on income derived from certain sources in the BES-Islands.
- Resident individuals who receive income, wherever earned, are subject to income tax in the BES-Islands.
- The following sources of income are subject to tax in the BES-Islands:
-
- Income from movable property (dividend and interest income)
- Employment income
- Self-employment and business income
- Income from periodic allowances
- Taxable employment income consists of employment income, including directors’ fees, less itemized and standard deductions and allowances, pension premiums and social security contributions, whether paid or withheld.
- The following are the tax rates in the BES-Island
|
Taxable income |
Tax on Lower Amount (USD) |
Rate on Excess (%) |
|
|
Exceeding (USD) |
Not exceeding (USD) |
||
|
0 |
282,957 |
0 |
30.4% |
|
282,957 |
- |
86,019 |
35.4 |
deductible expenses
Personal Deductions
- The following deductions may be claimed:
- Alimony payments to a former spouse.
- Mortgage interest paid that is related to the taxpayer’s dwelling (limited to USD15,364 annually).
- Maintenance expenses related to the taxpayer’s dwelling (limited to 2% of the value of the dwelling, with a maximum deduction of USD1,676 annually). All of the maintenance expenses are deductible if the dwelling is a protected monument.
- Premiums paid for fire and natural disaster insurance related to the taxpayer’s dwelling.
- Interest paid on consumer loans (limited to USD1,397 [USD2,794 if married] annually).
- Life insurance premiums that entitle taxpayers to annuity payments (up to a maximum of 5% of the income or USD559 annually).
- Pension premiums paid by the employee.
- Qualifying donations in excess of certain threshold amounts
Business Deductions
- In general, business expenses are fully deductible.
- However, deductions of certain expenses are limited.
- The following deductions are available for self-employed individuals:
-
- Accelerated depreciation of fixed assets at a maximum rate of 331/3%.
- An investment allowance of 8% for acquisitions of or improvements to fixed assets in the year of investment and in the immediately following year.
- The investment allowance is increased to 12% for acquisitions of new buildings or improvements to existing buildings.
- This allowance applies only if the investment amounts to more than USD2,794 in a year.
|
Deductible Expenses |
|
|
Personal Deductions |
|
|
Business Deductions |
|
immigration
- Admission to the BES islands may be based on
-
- admission by right (toelating van rechtswege),
- a (temporary) residence permit, or
- stay as a tourist (‘short stay’). It should be noted that for certain nationalities a visa is required in order to be admitted to the BES islands for a short stay as a tourist.
- Furthermore, in case of a longer stay, foreign nationals originating from certain countries must first apply for a provisional residence permit (machtiging tot voorlopig verblijf, hereinafter to be referred to as: MVV).
- In principle, all tourists may reside within the BES islands without having a temporary residence permit (the so-called free period, vrije termijn), for a maximum period of three months within a period of six months
- Foreign nationals who wish to work on the BES islands require a work permit (tewerkstellingsvergunning), pursuant to the foreign Nationals Employment Act BES (Wet arbeid vreemdelingen BES).
- The contemplated employer of the foreign national will have to submit the application to obtain such permit.
- A temporary residence permit is granted for a maximum period of five years and is subject to restrictions pertaining to the purpose of the temporary residence.
|
Type of Visa/Permit |
Documentation |
Validity |
Eligibility |
|
Tourist Visa |
|
3 months |
|
|
Temporary Residence Permit |
|
5 years |
|
|
Work Permit |
|
N/A |
|
value added tax
- The Caribbean Netherlands General expenditure tax (Algemene bestedingsbelasting or ABB) is comparable with a sales tax.
- Caribbean Netherlands ABB will in general be due on the supply of produced goods by manufacturers, the rendering of services and the importation of goods. The tax base is in principle the remuneration.
- The sales tax is 8% for the supply of produced goods by manufactures in Bonaire or 6 percent in Saba and Sint Eustatius.
|
VAT |
|
|
Bonaire |
8% |
|
Saba |
6% |
|
Sint Eustatius |
6% |
termination
- For dismissing personnel, the mandatory rules and regulations regarding termination of employment agreements have to be taken into account.
- Generally, there are four ways to terminate an employment agreement:
-
- Termination by giving notice, in which event the prior approval from the Minister of Social Affairs and Employment (Minister van Sociale Zaken en Werkgelegenheid) has to be obtained pursuant to the Termination of Employment Agreements Act BES. Without such consent any termination by giving notice will be considered null and void. For completeness sake it is pointed out that the Termination of Employment Agreements Act BES does not apply in all events.
- Termination by mutual consent. In such event the employer and the employee themselves negotiate the terms and conditions for the termination of the employment agreement.
- Dissolution of the employment agreement by the Court of First Instance of Bonaire.
- Immediate termination of the employment agreement, which is only allowed if there is an urgent reason, justifying an immediate termination. Such urgent reason and the immediate termination would immediately have to be informed to the employee.
statutory benefits
- These are mandatory benefits as postulated by law
- These include probationary period, annual leave, public holidays, sick leave, maternity leave, notice period
- Statutory benefits also include social security benefits
|
Statutory Benefits |
|
Probationary Period |
|
Annual Leave |
|
Public Holidays |
|
Maternity Leave |
|
Sick Leave |
|
Notice Period |
|
Social Security Benefits |
payments and invoicing
- Because the wage tax is a pre-levy to the income tax, employers must file wage withholding tax returns quarterly.
- The wage tax return must be filed by the 15th day of the month following the quarter in which the salaries are paid to employees.
- However, if certain conditions are met, the employer can request to pay the wage tax per month.
- For most employees, wage withholding tax is the final tax.
- The personal income tax returns for the calendar year must be filed within two months after the issuance of the income tax return forms, unless extensions for filing are obtained.
- Any additional income tax that is payable is normally due within two months after the date of the final assessment.
employee accruals
| Christmas Bonus% | 0% |
| Christmas Bonus Over Vacations % | 0% |
| Severance per Year % | N/A |
| Vacations % | Employees are entitled to 15 days of annual leave (4.1% of annual salary) |
| Notice % | Employees are entitled to 1 months notice period (8.33% of annual salary) |
| 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 12.4% |
employer accruals
Employer Accruals Additional information
| Employment Accruals | ||
| Annual Leave | Every employee is entitled to a number of vacation days per year equal to at least three times the contracted number of working days per week, with a minimum of fifteen days per year for employees who work six days per week. | This equals 4.1% (15/365 days) |
| Maternity Leave | Female employees are entitled to 16 weeks of paid maternity leave | This equals 30.7% (16/52 weeks) |
| Sick Leave | In the event an employee is unable to perform his/her labor due to sickness (that is not intentionally caused by the employee), the employer is obligated to continue payment of (100% of) the employee’s salary during a relative short period of time (unless otherwise stipulated in the labor agreement). | Subjective |
| Social Security | Employers must contribute 13.4% of annual income | This equals 13.4% of annual income |
