No personal income tax
Bermuda's hidden cost: 0% income tax but payroll tax runs 10.25% (typically 5.5% employee share). Work permits: $5,700-$35,900/year. A $150,000 earner pays ~$8,250 payroll tax. No capital gains, VAT, or withholding tax. 15% corporate tax from 2025. Very high cost of living.
Bermuda has no personal income tax, capital gains tax, or withholding tax—but there's a hidden cost. Payroll tax runs 10.25% total (split employer/employee, typically 5.5% employee). Work permits are expensive: $5,700-$35,900/year depending on job category. Social insurance adds ~$35/week each for employee and employer. 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 $8,250 payroll tax (~5.5%). Bermuda's high cost of living offsets some tax savings. Use our calculator to compare with taxable jurisdictions.
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Get International Health Insurance →No personal income tax exists in Bermuda—no tax on salary, dividends, interest, or capital gains. However, payroll tax applies: total 10.25% (employers pay base rate ~5%, employees pay ~5.5% depending on tax year). This is Bermuda's main revenue source. Still significantly lower than most developed countries' income tax.
Bermuda's payroll tax totals approximately 10.25% of salary. Employers pay the base rate (around 5%) while employees pay the remainder (~5.5%). Some employers absorb the full amount as a benefit. Applies to all employees working in Bermuda. Annual remuneration ceiling is $1 million—no tax on earnings above this.
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 (approximately $35.67 each per week in 2026). This provides retirement pension, disability, and survivor benefits. Unlike payroll tax, these are flat amounts not percentage-based. Combined with payroll tax, total employment costs are higher than headline suggests.
Last Updated: March 2026