Payroll Tax Amendment Act

What this bill does

This bill changes Bermuda's payroll tax system by adjusting tax rates for both employees and employers, and creates a new tax break for medium-sized businesses that hire new full-time workers. The changes aim to provide relief for smaller employers while adjusting how much employees pay based on their salary levels.

If passed (voted YES)

• Employees earning under $48,000 will pay less payroll tax (2% instead of 4%), while higher earners will pay more (up to 9.5% on salaries over $235,000)
• Small to medium employers with payrolls between $200,000-$500,000 will pay lower employer payroll tax rates (3.5% or 6.5% instead of 7%)
• Medium-sized businesses with payrolls between $500,000-$1 million can avoid paying employer payroll tax on new full-time hires through March 2022

If rejected (voted NO)

• Current payroll tax rates remain unchanged for both employees and employers
• No new hiring incentives would be available for medium-sized businesses
• Lower-income workers continue paying the current 4% rate, while higher earners keep paying current lower rates

Who it affects

This primarily affects all Bermuda employees (through changed tax rates based on income), small to medium-sized business owners (through reduced employer rates), and medium-sized companies considering new hires (through the hiring incentive program).