Bahamas Country Guide for Hiring Employees and Contractors
The Bahamas, known for its thriving tourism industry, reported an economy with a GDP of approximately $12.5 billion USD in 2023.
The tourism sector remains the largest contributor, accounting for nearly 50% of the GDP, followed by financial services, which also play a significant role. Agriculture and manufacturing are smaller but vital sectors supporting the economy.
The country’s currency is the Bahamian dollar (BSD), which is pegged to the US dollar at a one-to-one ratio.
Minimum Wage
$260 BSD per week
Overtime Wage
1.5 times the regular hourly rate
Meal Breaks
1 meal break of at least 30 minutes
Rest Breaks
No mandatory rest breaks
Working hours
8 hours/day, 40 hours/week
Salary Payment Cycle
Bi-weekly or monthly
Payroll Taxes
National Insurance Contributions
Paid Vacation
2 weeks for the first year, 3 weeks after 7 years
Overtime Hours
Over 40 hours/week
Night Shift Hours
1.25 times the regular hourly rate
Holidays
10
No Work Days
None legally mandated
To hire workers in the Bahamas, businesses are generally required to register as a local entity. The process of setting up a business entity can cost between $1,500 to $3,000 BSD, depending on the complexity of the business structure, and typically takes 2-4 weeks. Employers must provide employees with a written contract detailing terms of employment, including job description, salary, working hours, and termination clauses. Employment contracts should also include clauses on confidentiality, non-compete, and dispute resolution. The Bahamian labor laws treat employees and contractors differently, with employees entitled to greater protection and benefits under the law.
The Bahamas has a minimum wage law, with the current minimum wage set at $260 BSD per week as of 2024. This rate applies nationwide and is calculated on a weekly basis. There are no exceptions to the minimum wage law for specific jobs or types of workers. Additionally, the Bahamas does not have state-mandated minimum wage rates that differ from the federal rate. Employers are required to pay holiday pay at the standard rate for public holidays.
Standard working hours in the Bahamas are 8 hours per day and 40 hours per week. Overtime is defined as any hours worked beyond 40 hours per week, and employers must pay 1.5 times the regular hourly rate for overtime. Night shift hours, typically between 10 PM and 6 AM, are compensated at a rate of 1.25 times the regular hourly rate. The minimum legal working age in the Bahamas is 14, and there are strict laws against child labor, especially in hazardous occupations.
Employers in the Bahamas are required to deduct National Insurance Contributions (NIC) from employees’ salaries, which covers benefits such as sickness, maternity, and unemployment insurance. The NIC rate is 9.8%, split between employer (5.9%) and employee (3.9%). The Bahamas does not have an income tax, so there are no income tax deductions from salaries.
Income Level | Applicable Tax Rate |
All levels | 0% (No income tax) |
Employers in the Bahamas must provide statutory leave to employees, including paid vacation, maternity leave, paternity leave, sick leave, and adoption leave. Employees are entitled to 2 weeks of paid vacation per year, increasing to 3 weeks after 7 years of service. Maternity leave is 12 weeks, with at least 8 weeks paid. There is no mandated paternity leave. Sick leave is provided for up to 10 days per year, with a medical certificate required after 2 days.
Name of Holiday | Date |
New Year’s Day | January 1 |
Majority Rule Day | January 10 |
Good Friday | Variable (April) |
Easter Monday | Variable (April) |
Whit Monday | Variable (May/June) |
Labour Day | First Friday in June |
Independence Day | July 10 |
Emancipation Day | First Monday in August |
National Heroes Day | Second Monday in October |
Christmas Day | December 25 |
Boxing Day | December 26 |
Employers in the Bahamas are required to contribute to the National Insurance program, which provides benefits such as retirement pensions, unemployment insurance, and sickness benefits. There are no mandatory healthcare benefits, but many employers offer private health insurance as a perk. Employers are also encouraged to offer gratuity or annual bonuses, although these are not mandated by law.
The Bahamas does not follow At-Will Employment laws, meaning that employers must have a valid reason for terminating an employee. The employment termination process requires that employers provide notice, typically two weeks for employees who have been employed for less than two years, and one month for those with longer service. Employees are entitled to severance pay if terminated without cause, calculated as one week’s pay for each year of service. Employees can legally challenge terminations they believe are unfair, and disputes are often settled in labor tribunals. Employers can legally terminate employees for reasons including gross misconduct, redundancy, or breach of contract.