How can an Umbrella Company Help with Contracting in Barbados?
Most freelance workers aren’t superheroes who successfully tackle these issues all on their own. There are companies who specialise in helping workers make the most out of their contracts.
They’re called Umbrella Companies (or, contractor management companies).
Basically, an Umbrella Company acts as your full-time employer, even though you maintain your independence as a contractor. They collect and filter payments from your clients, filtering out the necessary social security and fees. You send them your timesheets, and they send you payments.
Because they act as your “employer,’ they can sponsor you and provide a single work permit for multiple contracts in Barbados. Even better, most are experts in Barbadian and expat tax law, meaning they’ll also help you optimise your earnings in Barbados.
Although the Umbrella Company is technically your “employer,” you’re essentially freeing yourself to work even more independently. You still dictate your contracts, your hours, your schedule. The Umbrella Company simply filters out the time-consuming admin and immigration issues, allowing you to focus on your new contract.
Can I Organise My Taxes and Work Permit Myself?
Generally, you need to have an employer sponsor in order to secure the appropriate work permit and work visa for Barbados.
If you’re working independently, it can be difficult to find clients willing to sponsor you. Moreover, even if your client can do this, you’ll need a new sponsor each time you decide to take on a new contract. Of course, every new sponsor will mean more paperwork.
Also, are you familiar with the intricacies of the tax system in Barbados, as well as your own country’s laws on overseas earnings? If so, good on you!
However, if you’re like the rest of us, figuring out (much less reducing) your tax liability in Barbados and your home country can seem like full-time work in itself.
A Contractor’s Guide to Taxes in Barbados
One of the most consistently challenging aspects of contracting in Barbados is complying with the country’s tax system. As well as paying tax in Barbados, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.
How do I calculate my taxable income in Barbados
If you’re working in Barbados under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Barbados for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Barbados, but contractors may not be offered this service because of their short stay with each employer.
Anybody who can’t pay their tax in Barbados through PAYE is left with the prospect doing everything themselves.
Do you know much about Barbadian Tax Law? Does Barbados have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Barbados can range from 16 to 33.5 percent, and you need to be sure you are placed in the correct tax brackets.
Tax Filing as a Contractor in Barbados
|When Do You Need to Lodge Your Tax Return?||30 April (of the year following the income tax year)|
|Tax Filing Deadline||30 April (of the year following the income tax year)|
|Can you file it online?||Yes, https://etax.bra.gov.bb/eTaxIrd/|
How to File Taxes in Barbados as a Contractor
Step 1: Register
Register for a username and password to access the Barbados Revenue Authority’s online services here(link is external).
You will be required to provide your National Registration Number (NRN) and personal details such as your full name and date of birth. A NRN is issued to every citizen of Barbados by the Electoral Office. Non-residents with a working permit are issued a temporary TIN (which is equivalent to an NRN) by the Barbados Revenue Authority.
Step 2: File Taxes
Log in to the Electronic Tax Administration portal here (link is external) and follow the prompts to complete your tax return.
Tax Figures in Barbados
|Currency||Barbadian/Bajan Dollar (BBD)|
|Tax-free Threshold in Barbados||None|
|Income Tax Rates|
Tax Residency in Barbados
When do you become a tax resident in Barbados
You become a tax resident in Barbados when:
You become a tax resident in Barbados when:
- You spend 183 days or more in Barbados in an income (calendar year); or
- You are considered ordinarily resident in Barbados. You become ordinarily resident in Barbados when (i) you have a permanent home in Barbados and (ii) give notice to the Revenue Commission that you intend to reside in Barbados for at least 2 consecutive income years.
Does the 183 day rule apply in Barbados
Am I taxed on my global income in Barbados
Residents are taxed on their global income. Non-residents are taxed on their Barbados-source income only.
Can you set up your own Limited Company in Barbados?
|How long does it take to set up||15 days|
|How much does it cost||BBD2,310|
|Is it easy?||Starting a Business Rank: 99/190 (Source: World Bank)|
Tax Calculator in Barbados
If you are a contractor and want a calculation on your tax and net retention in Barbados, we can supply it to you free of charge.
Using an Umbrella Company for Income Tax in Barbados
Contractors in Barbados are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Barbadian umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).
The companies are experts in Barbadian taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Barbadian tax office or tax department directly including processing your tax refund if you are eligible.
How We Can Help You with Tax in Barbados
We work with numerous umbrella companies in Barbados, many of whom are experts in tax and immigration laws. If you have any questions about tax in Barbados, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Barbadian work permit.
Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Barbados but without the overhead of directly dealing with the Barbadian tax authorities. Get in touch with us today for some reliable advice on tax in Barbados!
A Contractor’s Guide to Work Permits in Barbados
Immigration is one of the primary concerns for any contractor hoping to start working in Barbados. Permanent employees will find it easy to get their Barbadian work permit because they’ll receive “sponsorship” for their entire stay from their prospective employer.
The Barbadian work permit, is dependent on this sponsorship because it confirms that you’ll be earning money during your stay in the country. Contracting in Barbados is more difficult because the work permit is tied to one employer, so you have to change it to suit each new contract. Thankfully, umbrella companies provide a convenient and effective solution to this issue.
How Does an Umbrella Company Work?
Most people want to do their work, earn their money and enjoy their spare time without taking on loads of admin in a new country. That is why an umbrella company can help.
When you’re working through an Umbrella Company, you’ll essentially be outsourcing the admin and tax issues to specialists.
While the umbrella company will charge a fee, you’ll likely end up saving more money in the long run: you’ll be able to focus on your work, expertly reduce your tax liability, and comply with all laws and regulations in Barbados (which means avoiding fees, fines, or even worse penalties).
How Can We Help You?
There’s a huge variety of Umbrella Companies with different specialities and advantages in Barbados. How do you find the right one for your circumstances?
We work closely with Umbrella Companies all throughout Barbados and match contractors with the right company for them. If you’ve already secured a contract in Barbados, we can help you find your best match (for free). Or, we can simply give you feedback on your situation (for free).