Employer of Record in Bahamas

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

Businesses can only operate smoothly in Bahamas if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Bahamas below, to avoid any compliance issues.

Onboarding Process

We can help you get a new employee started in Bahamas quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment.

In Bahamas, an employee aged 17 or older is allowed to work 40 hours per week. A minimum meal interval of 30 minutes must be observed by employees who work more than 6 hours in a day. In typical working hours, Monday through Friday, the hours are 9:00 AM to 5:00 PM. The Bahamas labor laws specify that employees should not work more than 12 hours in a day, inclusive of any overtime worked.

Bahamian law requires that overtime work be compensated at a premium rate. For hours worked beyond the standard 40-hour workweek or 8-hour day, employees must receive at least 1.5 times their regular hourly wage (time-and-a-half).

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Growing your team in Bahamas is exciting, but it’s not without challenges. Local labor laws are often nuanced, and hiring without the right legal structure or processes can lead to misclassification, non-compliance penalties, or disputes. An Employer of Record removes that risk by acting as the legal employer on your behalf, taking full responsibility for compliance, contracts, payroll, and employee benefits.

This gives you the freedom to scale at your own pace, whether you're adding one employee or building out an entire function, without the burden of setting up and managing a local entity. You remain in control of day-to-day responsibilities and performance, while the EOR ensures every hire is legally protected and properly supported. It's a strategic way to expand globally without spreading your internal team too thin or exposing your business to legal liabilities in unfamiliar markets.

Employers in the Bahamas should be aware of the mandatory payroll tax obligations, particularly the social security contributions, which consist of 4.65% from employees and 6.65% from employers, applied to insurable earnings up to a certain limit. It is crucial for businesses to ensure timely and accurate remittance of these contributions to avoid penalties and maintain employee benefits.

Employers should also familiarize themselves with the due dates for various taxes, including VAT returns and real property tax. To streamline payroll management and ensure compliance with Bahamian tax laws, using payroll management software can greatly help businesses consolidate payroll data and stay compliant with local regulations.

Employees expect to be paid accurately, on time, and in full compliance with local standards. When you're hiring in Bahamas, providing a smooth payroll experience is critical to retention and trust. An Employer of Record ensures that employees receive what they’re owed, without errors, delays, or confusion about taxes or benefits.

Key Ways an EOR Supports Payroll in Bahamas:

• Reliable Salary Payments: Ensures employees are paid promptly in local currency.
• Clear Payslips & Documentation: Provides employees with compliant, understandable records.
• Correct Benefits & Contributions: Delivers legally mandated contributions and any changes in compensation, like bonuses.
• Payroll Setup & Processing: Handles salary calculations, tax withholdings, and local reporting obligations.
• Boosts Employee Confidence: Builds trust with compliant, consistent payroll operations.

In the Bahamas, foreign nationals generally need a work permit issued by the Department of Immigration to take up employment, even if they are already in the country on a visitor visa. The most common categories are the standard Work Permit (often issued for up to one year and renewable), Short-Term Work Permit for assignments up to 90 days, and permits linked to Temporary Residence for longer stays. Some nationals may also require an entry visa in addition to the work permit, depending on their country of citizenship.

Work authorization is employer-specific and role-specific, meaning the employee may only work for the sponsoring Bahamian employer in the approved position and location. Employers must demonstrate that no suitably qualified Bahamian is available for the role and that the business is compliant with local laws. Applications are document-heavy and can take several weeks or months to process, so planning ahead is essential for smooth onboarding and continued compliance.

Mandatory Leave Entitlement in Bahamas

The annual leave entitlement in Bahamas is 2 weeks (10 days) for a full time worker who has worked between 12 months and less than 7 years, increasing to 3 weeks for those working 7 years or more with the same employer. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

An Employer of Record (EOR) helps businesses manage annual leave, paid time off (PTO), and local holidays across the globe, including in Bahamas. By partnering with an EOR, companies ensure full compliance with local labor laws in Bahamas when it comes to annual leave and time-off management. EOR providers like Playroll offer platforms that simplify tracking and managing employee time off in Bahamas. By outsourcing this responsibility to Playroll, you can streamline leave management, ensure compliance, and free up time to focus on other business priorities.

In Bahamas, failing to provide the correct employee benefits can have serious consequences. Mistakes in benefits administration may result in fines and harm your reputation as an employer. An Employer of Record ensures statutory benefits and leave are handled correctly, every time, and provides comprehensive options for extra perks to reward your team.

Beyond just avoiding legal issues, a well-managed benefits program builds trust with your employees. An EOR ensures benefits are set up quickly during onboarding, updated when employee status changes, and fully compliant with national regulations. They also manage communication with employees, so there’s no confusion around what’s offered and how to access it. This combination of legal compliance and positive employee experience is hard to replicate without local infrastructure. With an EOR, you can offer peace of mind to your team (and to yourself) knowing that your benefits program in Bahamas is running as it should.