How income tax works in Bermuda
Bermuda does not impose personal income tax. Salaries, wages, freelance income, business profits, dividends, interest, rental income and foreign income are not subject to an ordinary Bermuda PIT system.
The main employment tax is payroll tax, which is charged on remuneration and paid quarterly. For 2026/27, employee payroll tax is progressive, with bands starting at 0.25% and rising to 12.5% at the top end, while employers also pay their own payroll-tax portion. Employers may recover some of the employee portion through payroll.
Income tax brackets in Bermuda
| Bracket | Rate | Notes |
|---|---|---|
| All personal income | 0% | Bermuda does not tax individuals through a PIT regime. |
| Employment income | 0% | Salary is not subject to income tax, but payroll tax and social insurance can apply. |
| Payroll tax | Progressive | 2026/27 employee bands run from 0.25% to 12.5%, with quarterly filing for liability. |
Tax rates at a glance
- Personal income tax
- 0%Zero
- Highest bracket tax
- 0%
- Foreign income tax
- 0%
- Tax on wages
- 0%
- Employee payroll tax
- 0.25% - 12.5%
- Employer payroll tax
- 0% - 9.75%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
Remote foundersHigh earnersInvestorsDigital nomadsExpat employees
Watch out for
- Payroll tax is due quarterly, and employers with annual payroll of $200,000 or more must e-file.
- As of 1 April 2026, dividends paid to people providing services to local companies are taxed as part of gross remuneration above $20,000 per person per year.
- Bermuda also has separate social insurance contributions, plus employer health insurance and pension obligations, so "no income tax" does not mean "no payroll cost".
Frequently asked questions
Do expats pay income tax in Bermuda?
No. Bermuda does not levy personal income tax on expats or residents. Expats can still face payroll tax, social insurance and employer-sponsored health insurance costs.
Is Bermuda tax-free for salary?
Not fully. Salary is not taxed under a personal income tax system, but payroll tax and social insurance can still reduce take-home pay.
How do payroll taxes work in Bermuda?
Payroll tax is charged on remuneration and filed quarterly. The 2026/27 employee portion is progressive, and the employer usually remits the full amount even when part of it is recovered from the employee.