Payroll Services in Barbados

National Insurance for private-sector employees is 24.25% of pay, 13% from the employer and 11.25% from the employee, in force since 1 April 2025. It funds eight things: National Insurance at 6.75% each, the non-contributory scheme at 2% each, unemployment at 0.75% each, the training levy at 0.50% each and the Health Service Contribution at 1.50% from the employer and 1% from the employee. The employer alone pays employment injury at 0.75% and severance at 0.50%, and each side pays 0.25% to the Resilience and Regeneration Fund, which replaced the Catastrophe Fund in 2025.

Contributions are charged on insurable earnings up to a ceiling of BBD 5,360 a month, or BBD 1,238 a week, in 2026, up from BBD 5,280 in 2025. The Resilience and Regeneration Fund is the exception: it is calculated on all gross earnings, so a payroll system that caps every line at the ceiling underpays it for anyone above BBD 5,360.

Contributions and the earnings schedule are due within 15 days after the end of the month, moving to the next business day at a weekend. Late payment attracts interest and can lead to prosecution.

From income year 2026 the personal income tax rates were cut by one point each. After the BBD 25,000 personal allowance, income up to BBD 75,000 is taxed at 11.5% and income above BBD 75,000 at 27.5%, down from 12.5% and 28.5%. The Barbados Revenue Authority’s own examples put the tax on a BBD 60,000 salary at BBD 4,025 and on BBD 100,000 at BBD 12,625.

Employers deduct PAYE monthly, applying a twelfth of the allowance and of each band, and pay the tax withheld to the Revenue Commissioner on or before the 15th of the following month. Payroll systems had to be updated for the 2026 rates, so a system still using 12.5% over-deducts from every employee above the allowance.

The national minimum wage is BBD 10.71 an hour from 21 January 2026, a 2% increase on the BBD 10.50 set in June 2025, with a separate rate of BBD 11.66 for security guards. On a 40-hour week that is about BBD 1,856 a month.

Under the Holidays with Pay Act employees are entitled to at least three weeks of paid vacation after twelve months of service, and four weeks after five years. When a public holiday falls during vacation, the vacation is extended by a day.

Severance under the Severance Payments Act applies where an employee with at least 104 weeks of continuous service, working 21 hours a week or more, is made redundant. It is 2.5 weeks’ basic pay for each of the first ten years, three weeks for each year from 11 to 20 and 3.5 weeks for each year from 21 to 33, and it must be paid within two months of falling due.

Parental pay in Barbados runs through NIS rather than the employer. Paternity benefit of three weeks at 100% of average insurable weekly earnings is available for children born from 1 June 2025, to fathers with twelve months with the same employer who give four weeks’ written notice. The Family Leave Bill passed by the Senate in October 2025 extends maternity leave from 12 to 14 weeks, or 17 for multiple births, also paid through NIS.

There is no statutory right to paid uncertified sick days: employers decide their own sick leave policy, and insured employees who are off work sick claim NIS sickness benefit.

Foreign nationals need a work permit from the Immigration Department before they start. Short-term permits carry a BBD 300 application fee, with the final fee depending on the category of work and length of stay. Long-term permits last up to three years and require the employer to show that the role was advertised locally and that no Barbadian or resident can fill it.

Work permit holders on Barbadian payroll are registered for NIS and taxed through PAYE like any other employee.