RATE INCREASE
What is the Contribution Rates Increase?
The National Insurance rate is the percentage of contributions paid by employed persons to provide social security benefits. Employed persons currently pay 9.8% (3.9% paid by the employee and 5.9% paid by employer). Self-employed persons pay 8.8% and Voluntarily Insured Persons pay 5%. A rate increase would increase the percentage paid by each category of insured persons.
When will it occur?
The National Insurance Contribution Rates will increase on July 1, 2024.
Why is it necessary?
The Contribution Rates increases are necessary for the sustainability of the National Insurance Fund. Given the changing demographics of The Bahamas and the increasing costs of Benefits, the reserve for the Pensions Branch will be exhausted in 2028. Immediate actions are needed to restore, not only the long-term financial sustainability of the Scheme, but also, the short-term.
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Who is affected?
The Contribution Rates increases will affect employers, gainfully employed persons and voluntarily insured persons as follows:
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For employers the percentage rate will increase from 5.9% to 6.65%
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For employees the percentage rate will increase from 3.9% to 4.65%
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For self employed persons the percentage rate will increase from 8.8% to 10.3%.
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For voluntarily insured persons the percentage rate will increase from 5.0% to 6.5%
