Bermuda payroll tax rates for small businesses depend on the employer’s annual payroll, business category and the tax period being reported. For the 2026/27 tax year (1 April 2026 to 31 March 2027), the Government of Bermuda’s published guidance lists a 0.5% employer rate for taxpayers with annual payroll below BMD $200,000. A proposed 2026 amendment would restore that rate to 1.0%, but employers should confirm whether it has become law and its effective date before applying a change. This guide explains the rates, employee deductions, relief, calculations and filing steps in plain English.
Bermuda payroll tax is administered by the Office of the Tax Commissioner. The employer portion and employee portion are calculated separately, but the employer is responsible for filing and paying the combined amount. Because payroll tax rules can change, use the current Government of Bermuda 2026/27 payroll tax guidance as the starting point and confirm any subsequent legal amendments before filing.
Bermuda payroll tax rates for small businesses in 2026/27
The Government’s 2026/27 rate table lists the following employer-portion rates. The payroll thresholds are annual amounts, with equivalent quarterly thresholds noted in the official guidance. The category matters: a hotel, restaurant, qualifying retailer or exempt undertaking may not use the standard commercial rate.
| Employer category | Annual payroll (BMD) | Employer rate from 1 April 2026 |
|---|---|---|
| Small employer | Below $200,000 (below $50,000 per quarter) | 0.5% |
| Standard employer | $200,000–$350,000 | 2.0% |
| Standard employer | Over $350,000–$500,000 | 4.75% |
| Standard employer | Over $500,000–$1,000,000 | 7.0% |
| Standard employer | Over $1,000,000 | 9.5% |
| Hotel or restaurant meeting the payroll threshold | $350,000 or more | 4.0% |
| Qualifying fashion, shoe, jewellery or perfume retail establishment | Over $500,000 | 5.0% |
| Specified public bodies and licensed residential care homes | Category-specific | 3.0% where applicable |
| Educational, sporting or scientific institutions | Category-specific | 1.0% |
| Qualifying exempt or relief category | Subject to conditions | 0% or special rate |
These rates describe the employer portion, not the total payroll tax attributable to employees. For example, a business with annual payroll below BMD $200,000 should not assume that 0.5% is the total amount payable; employee payroll tax may also apply. When comparing Bermuda payroll tax rates for small businesses, account for both portions and any relief that applies. Review the Government’s current table for the exact definition and treatment of each category.
Has the small-business rate changed to 1%?
This is an important point for 2026. The Government’s published 2026/27 payroll tax calculation page lists the small-employer rate as 0.5%. Separately, the Payroll Tax Rates Amendment Act 2026 has been introduced as a bill proposing to raise the rate from 0.5% to 1.0%. The parliamentary bill record should be checked for its latest stage, assent and commencement date. A bill’s introduction or passage through one stage does not, by itself, establish that a new rate is already in force.
Before calculating a return for a quarter, confirm the law and official Tax Commissioner instructions applicable to that period. Do not backdate a proposed rate or apply it to a prior quarter without an effective legal provision. Keep a copy of the guidance relied on, particularly if your payroll period crosses a rate-change date.
How employee payroll tax rates are calculated
The employee portion uses progressive marginal rates based on each employee’s annual rate of remuneration. Each rate applies only to the slice of remuneration within its band—not to the employee’s entire pay. For 1 April 2026 to 31 March 2027, the published bands are:
| Annual remuneration band (BMD) | Employee rate |
|---|---|
| First $48,000 | 0.25% |
| $48,001–$96,000 | 7.75% |
| $96,001–$200,000 | 10.75% |
| $200,001–$500,000 | 11.50% |
| $500,001–$1,000,000 | 12.50% |
The maximum taxable remuneration is BMD $1,000,000 per person annually. Amounts above the cap are not subject to payroll tax. Where pay fluctuates, the annual rate of pay may need to be recalculated for each pay period. The Tax Commissioner provides employee-portion calculators and instructional resources on the official 2026/27 page; use the calculator applicable to the pay period.
Bermuda payroll tax rates for small businesses: worked example
Assume a standard small employer has BMD $160,000 in annual payroll and falls within the under-$200,000 category. At a 0.5% employer rate, a simple annualised illustration is $800 (BMD $160,000 × 0.005). If a 1.0% rate is legally effective for a later period, the same annualised payroll would produce an illustrative $1,600 (BMD $160,000 × 0.01).
These are illustrations of the rate difference, not a substitute for a quarterly return calculation. Actual tax depends on taxable remuneration in the relevant period, employer classification, applicable relief and the rules in force. The employee portion must be calculated separately using the marginal bands.
What counts as taxable remuneration?
Payroll tax generally applies to taxable remuneration paid for services in Bermuda. This can include salary, wages, bonuses and benefits in cash or in kind. The treatment of a particular payment depends on the legislation and any applicable exemption or special rule. The 2026/27 Government guidance also identifies a BMD $20,000 annual dividend deduction per person; dividends above that amount may be included in gross remuneration, subject to the tax ceiling and reporting rules.
Keep records that distinguish salary, bonuses, benefits, dividends and excluded payments. Do not omit a payment solely because it is not described as ordinary wages. If an item has unusual treatment, check the official guidance or seek advice before filing.
Small-business payroll tax relief and exemptions
Some employers may qualify for relief from the employer portion. The Government’s guidance identifies qualifying new start-ups for four quarters and qualifying employers operating in an Economic Empowerment Zone (EEZ) for nine quarters. These are conditional programmes, not automatic exemptions for every newly formed business or every employer located in a particular area.
Review the Bermuda Economic Development Corporation’s New Startups Payroll Tax Relief programme and confirm eligibility, application steps and the approved relief period. Retain registration records and approval documents. A zero employer rate does not necessarily remove employee-portion calculations, returns or other reporting requirements.
Other special categories may include certain charities, educational or scientific institutions, farmers, fishermen, caregivers and remuneration in specified special situations. Each category has its own conditions. Confirm that the business and the remuneration qualify before applying a zero or reduced rate.
Quarterly payroll tax filing and payment deadlines
Bermuda payroll tax returns and payments are generally due within 15 days after each calendar quarter ends:
- January–March: 15 April
- April–June: 15 July
- July–September: 15 October
- October–December: 15 January of the following year
For example, the return for October–December 2026 is generally due by 15 January 2027. Employers with annual remuneration of BMD $200,000 or more, and all exempt companies, are required to e-file. The Tax Commissioner encourages other employers to use the Bermuda e-Tax portal as well. Confirm the filing format and payment instructions for your business.
Payroll tax records and a practical compliance checklist
Maintain sufficient records to explain how each return was prepared. A useful file includes payroll registers, employee remuneration details, benefit and bonus records, calculations for both tax portions, relief approvals, filed returns and payment confirmations. Reconcile the return to the payroll ledger and investigate differences before submission.
- Confirm the employer’s category and annual payroll band.
- Check the rate and legislation applicable to the quarter.
- Separate employer and employee calculations.
- Apply the employee marginal bands and $1 million cap correctly.
- Review remuneration, exemptions and approved relief.
- Submit the return and payment by the quarterly deadline.
- Save the return, receipt, payment evidence and supporting records.
Common mistakes to avoid
Small employers can run into difficulty by using a rate from the wrong tax year, treating a proposed amendment as law, applying an employee marginal rate to all remuneration, overlooking taxable benefits, assuming relief is automatic or missing a quarterly due date. A payroll below BMD $200,000 does not, on its own, mean that no filing or employee tax obligations exist.
Review the employer category when payroll changes, and recalculate employee annualised pay where remuneration fluctuates. If your business has an unusual classification, a relief claim or complex benefits, contact the Office of the Tax Commissioner or a qualified Bermuda payroll adviser before filing.
Frequently asked questions
What is the Bermuda payroll tax rate for a small business in 2026?
The Government’s published 2026/27 table lists 0.5% for employers with annual payroll below BMD $200,000. A proposed amendment would raise it to 1.0%; verify its legal status and effective date before using the higher rate.
Are employer and employee payroll tax the same?
No. They are calculated separately. An employer may deduct the employee portion from wages, but remains responsible for filing and paying the combined amount.
When is Bermuda payroll tax due?
Returns and payments are generally due on 15 April, 15 July, 15 October and 15 January for the preceding calendar quarter.
Can a start-up receive a 0% employer rate?
Qualifying start-ups may receive four quarters of employer-portion relief, while qualifying EEZ employers may receive up to nine quarters, subject to the programme’s conditions and approval.
Official resources and related Bermuda tax guides
For the current rate table and employee calculators, consult the Government of Bermuda’s 2026/27 payroll tax guidance. The official payroll tax service page explains the tax framework, while the Parliament’s record of the Payroll Tax Rates Amendment Act 2026 can be used to check the bill’s progress. For related tax context, read BermudaFin’s Bermuda Government Financial Outlook and Bermuda Corporate Tax Rate guide.
This article is general information, not tax, legal or accounting advice. Rates, classifications and relief conditions can change. Confirm the rules applying to your business and tax period with the Office of the Tax Commissioner or a qualified Bermuda adviser.
