Bermuda has no personal income tax, capital gains tax, or withholding tax—but there's a hidden cost. Payroll tax is charged to employees in bands from 0.25% to 12.5%, and employers pay their own payroll tax on top. Work permits are expensive: $5,700-$35,900/year depending on job category. Social insurance adds a flat BMD 39.25/week each for employee and employer from 1 August 2026. No VAT or sales tax. Bermuda charges 15% corporate income tax from January 2025 (OECD Pillar Two compliance). Property is taxed via ARV (Annual Rental Value). A $150,000 earner pays roughly $9,645 employee payroll tax (~6.4%). Bermuda's high cost of living offsets some tax savings. Use our calculator to compare with taxable jurisdictions.
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No personal income tax exists in Bermuda—no tax on salary, dividends, interest, or capital gains. However, payroll tax applies: employees pay banded rates of 0.25% up to BMD 48,000, 7.75% to 96,000, 10.75% to 200,000, 11.5% to 500,000 and 12.5% to 1,000,000, and employers pay their own payroll tax by employer class. This is Bermuda's main revenue source. Still significantly lower than most developed countries' income tax.
Bermuda's employee payroll tax is progressive, applied band by band to remuneration: 0.25% up to BMD 48,000, 7.75% from 48,001 to 96,000, 10.75% from 96,001 to 200,000, 11.5% from 200,001 to 500,000 and 12.5% from 500,001 to 1,000,000. For example, BMD 150,000 of salary gives about BMD 9,645 (~6.4%). The employer withholds the employee share and separately pays its own payroll tax, which depends on employer class and payroll size. The bands as written end at BMD 1,000,000.
Work permits are mandatory for non-Bermudians and costly: Standard work permit fees range from $5,700 to $35,900 annually depending on job category. Employers typically pay these fees. Global Work Permit Holders (GWPH) program for remote workers costs $4,000 for 1 year. Permanent Residency Certificate: $100,000+. These costs add significantly to employment expenses.
Bermuda introduced 15% corporate income tax effective January 1, 2025, to comply with OECD Pillar Two global minimum tax rules. Applies to multinational enterprises with global revenue above €750 million. Smaller businesses remain untaxed. Bermuda shifted from pure tax haven to OECD-compliant jurisdiction to maintain access to global markets.
Bermuda's Contributory Pension Fund requires weekly contributions from both employees and employers: a flat BMD 39.25 each per week from 1 August 2026 (about BMD 37.65 before that, per secondary source), roughly BMD 1,993 a year for an employee in 2026. This provides retirement pension, disability, and survivor benefits. Unlike payroll tax, these are flat amounts not percentage-based. Employees also typically pay about half of the hospital insurance premium (around BMD 2,578 a year on a 50/50 split, secondary source). Combined with payroll tax, total employment costs are higher than headline suggests.
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Last Updated: October 2026