Taxes in Bermuda

Bermuda tax rates in 2026: at a glance

Bermuda has no income tax and no VAT, and its main tax is payroll tax, paid by the employer and the employee on salary. The budget is topped up with customs duties, so life on the islands is expensive. Here are the main taxes in one table.

The Bermuda dollar is pegged one to one to the US dollar.

Residency and work

Foreigners who are not Bermudian need a work permit to work - working without one is illegal.

After the pandemic the government introduced the Work from Bermuda Certificate - permission to live on the islands for a year and work remotely for a foreign employer or your own business outside Bermuda. More on the Bermuda digital nomad visa page.

Social insurance

The contributory pension system requires employers to make monthly contributions to the pension fund for every employee over 17 who works more than four hours a week. The employer must register each employee and obtain a social insurance number for them; a breach carries civil or criminal liability.

Employees pay their share through weekly payroll deductions. Students under 26 working full time during the holidays, and their employers, are fully exempt from contributions. Employees over 65 do not pay their half, but the employer still has to pay its part.

The current total contribution per employee per week is $72 (71.84 Bermudian dollars): 35.92 Bermudian dollars from the employer and 35.92 Bermudian dollars from the employee.

Expatriates who have paid contributions but cannot draw a pension because those contributions are insufficient may apply at 65 for a refund of the full amount paid, including the employer's share.

Payroll tax

Employers in Bermuda pay payroll tax. The rate depends on the employer category or on the company's total annual payroll.

Customs duties

Duty is charged on almost all goods brought onto the island. The personal exemption on arrival is 200 Bermudian dollars for residents and 50 Bermudian dollars for non-residents. The most common rate is 25%, though other rates apply to certain categories of goods.

New residents are exempt from duty on personal and professional effects for 90 days after arrival, provided the goods have been in their possession for at least six months.

Other taxes and fees

• Excise duties - not charged.
• Transfer tax - not charged.
• Stamp duty - charged on a wide range of legal documents: property transfers, deeds, leases. The rate depends on the type of document and its value and is revised by parliament from time to time.
• Foreign currency purchase tax - 1.25% on the amount a Bermuda resident buys at a local bank.

Payroll tax scale from 1 April 2026

Payroll tax is Bermuda's main tax. The employer pays it for itself and for the employee, and usually deducts the employee portion from pay. The Bermuda dollar is pegged one to one to the US dollar.

Employee portion

Rates are progressive: each applies only to the part of income in its band. No tax is charged above $1,000,000 a year.

Employer portion

Example: $120,000 salary a year

There is no income tax on top, and income from investments abroad is not taxed. We run the numbers for your salary and family in the chat.

Dividends and the self-employed

• Dividends to owners of local companies who work in them are taxed as pay. From 1 April 2026 the first $20,000 a year per person is exempt.
• The self-employed pay payroll tax on their income at the employer rate and on the employee scale.
• Income from investments abroad - interest, dividends from foreign companies, capital gains - is not taxed in Bermuda.

For business on the islands: company registration, a business account and a personal account.

Corporate income tax for large groups

Ordinary Bermuda companies pay no profit tax, and exempted companies hold a government assurance until 2035. The exception is large multinational groups with revenue of $850 million (750 million euros) or more a year: from 1 January 2025 they pay 15% under the Corporate Income Tax Act 2023. For small companies and individuals nothing changes.

Healthcare and pensions

• Health insurance is mandatory for all employees, and the employer pays at least half of the premium for basic cover.
• Government social insurance - a fixed weekly contribution shared by employee and employer.
• Occupational pension - 5% of pay each from employee and employer. Mandatory for Bermudians, their spouses and permanent residents; foreigners on work permits are usually exempt.

Property

• Land tax - annually on a progressive scale based on the property's annual rental value.
• Stamp duty on purchase - on a scale by price.
• Foreigners may buy only homes above a set rental value threshold, with a government licence and a licence fee based on the price.
• Letting by a foreigner needs separate permission.

What changes in 2026

• From 1 April 2026 the employee rates in the lower bands were cut: only 0.25% up to $48,000.
• The 2026 new hire relief: exempted companies and large employers pay no employer portion on new jobs until 31 March 2028.
• The exempt part of dividends rose to $20,000 per person a year.
• The House of Assembly approved restoring a 1% rate instead of 0.5% for employers with payroll up to $200,000 from the fourth quarter of 2026.

Alternatives to compare

• Cayman Islands taxes - no income or payroll tax, but higher duties.
• Barbados taxes - there is income tax, but the country is cheaper.
• Bermuda digital nomad visa - a year on the islands while working remotely.

Features of the Bermuda tax system

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