Employees working in the country are protected by the Bahamas’ Employment Act. Bahamian employers are expected to be knowledgeable of the regulations before they onboard local workers to their company. Below is some helpful information to
Employee Contract
Public and Provincial Holidays
Leave Information
Basic
There is no specific regulation that an employment contract in the Bahamas should be in writing, nor does it specify a language to be used. It can either be verbal or written, so long as the terms are well communicated to their employees in a language both parties understand.
Probation Period
The probation period for the Bahamas is not mandatory. However, some have a mutual agreement that stipulates 12 months of probation period.
13th Month Pay
A 13th-month pay is not mandatory in the Bahamas.
Employee Benefits
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Statutory leaves
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Unemployment Insurance
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Retirement
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Pension
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Allowance
Salaries in the Bahamas are released every month.
Employees in the Bahamas should be paid a minimum wage of BSD 260.00 per week.
Employees working in excess of the required 40 hours per week will be entitled to overtime pay. For extra hours of work performed in a regular work day, employees receive 1.5 times their regular rate. For extra hours of work performed on a public holiday or a day off, employees receive 2 times their regular rate.
Employer Payroll Cost:
| Type of Contribution |
Contribution Rate |
| Social Security |
6.65% |
Employee Payroll Cost:
| Type of Contribution |
Contribution Rate |
| Social Security |
4.65% |
Employee Income Tax
Employees in the Bahamas do not pay income taxes.
VAT
The standard VAT rate is at 10%
Termination of an employment contract may occur in the following circumstances:
- Unsatisfactory work performance
- Retirement
- Resignation
- Redundancy A notice is expected to be provided by either party before a contract is ended.
The Notice period for Bahamian employees can be up to a month.
Severance pay
The Severance payment in the Bahamas varies on the reason for termination.
For termination due to redundancy, the following calculation must be followed:
| Employment Duration and Hierarchy |
Severance Pay |
| Each year served – Rank and File |
2 weeks of pay (capped at 24 week’s worth of pay) |
| Each year served – Managers and Supervisors |
1 month of pay (capped at 48 week’s worth of pay) |
For termination due to personal reasons (resignation, retirement, etc.), the following is observed:
| Employment Duration |
Severance Pay |
| Less than a year (6 to 12 months) |
1 week of pay |
| Each year served – Rank and File |
2 weeks of pay (capped at 24 week’s worth of pay) |
| Each year served – Managers and Supervisors |
1 month of pay (capped at 48 week’s worth of pay) |
Foreigners planning to work in the Bahamas must secure a work permit from the Department of Immigration to legally stay and be employed in the country. They may either apply for a short-term work permit if they are to work for only 90 days or a regular work permit for a period longer than 90 days.