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Bermuda Cost of Living Guide

Consumer facts for residents and visitors

By Keith Archibald Forbes (see About Us) at e-mail exclusively for Bermuda Online

To refer to this file use "bermuda-online.org/costoflivingguide.htm" as your Subject

Bermuda cost of living overall

The World Bank rates Bermuda as the most affluent country in the world, by far. But also be aware Bermuda's cost of living is one of the highest in the world. This is not in any way intended to deter you from coming, simply to alert you in advance to the fact that Bermuda is a lot more expensive a place to live and work than you'll be told by many head-hunters and recruiters based in other countries who have not actually lived and worked in Bermuda themselves recently or at all. 

Here are the principal factors, when compared to the USA, Canada, Europe and elsewhere: 

Alcohol & Tobacco costs are very high. There are no locally made alcoholic or non-alcoholic drinks.

Child support costs are very high. Bermuda, despite being nominally British, does not offer any child birth and/or child-support payments to parents.

Clothing, hats, shoe, etc costs are very high.

Duty-free allowances for returning residents. See http://www.bermuda-online.org/Bermudadutyfree.htm. Very stingy compared to the far more generous duty-free allowances given to traveling returning residents of the USA, Canada, UK, etc 

Education costs are very high for private schooling at pre-primary, primary, secondary level.  Government schools (public schools) are free to Bermudians and some non-nationals if they accept the multi-racial conditions and generally a lower standard. There is a community college that is not free. It awards associate degrees. There are no Bermuda-based universities. Most Bermudian and non-Bermudian residents send their children to universities in the USA, or Canada or the UK, in that order of overall preference.

Electricity. Budget at least $312 a month per family unit, based on 730 kWh per month in May 2013, very expensive by international standards. 

Furniture & Appliance costs are very high.

Grocery and related costs are very high.

Healthcare costs are very high. For this, local taxpayers pay not just once but several times for (a) for the rebuild of the King Edward VII Memorial Hospital; (b) the operational costs of the Bermuda Government's Ministry of Health; (c) for employer/employee health and hospital insurance. Only local majority-Bermudian-owned insurers can be used. Bermuda, despite being nominally British, follows the American pattern of charging for general healthcare, general practitioner consultation rates, healthcare/medical insurance, hospitals private ward daily rate and medications. There are separate charges for dentists. Bermuda has no equivalent of the UK's or Canada's National Health Service and unlike the UK does not offer free doctor's visits, free hospitalization, free surgery, free prescriptions for the over 65s. 

Household Accommodation rental and/or purchase costs are very high for accommodation such as for an apartment or flat or house or condominium. Plus, their costs for utilities, LP gas and sometimes water are extra. Unlike in the USA, Canada, UK, etc. there is no locally-produced oil or natural gas or coal.

Household insurance is very high. Only local majority-Bermudian-owned insurers can be used. For example, a small (1250 square feet) 2-bbedroom detached cottage in Paget costs $3200 a year with Argus, a 3 bedroom 1,750 square foot detached bungalow in the UK costs £120 sterling.

Internet, telephone, cable, cell phone charges, WIFI and related Communication costs are very high.

Legal costs are very high, averaging in Bermuda about $600 an hour. 

Miscellaneous costs are very high for items such as dry cleaning, general goods, general services, linen, magazines, maid service, newspapers, office supplies, postage stamps and stationery.

Personal Care costs are very high for cosmetics, hair care, moisturizer, diapers (nappies), pain relief tablets, shampoo, soap, sun block, toilet paper and toothpaste. 

Recreation and Culture costs are very high for books, camera, cinema tickets, fitness/health club membership, sports goods and movie house (cinema) tickets.  There are no UK-like theatres in Bermuda.

Restaurants, Meals Out and Hotel costs are very high.

Transport costs are very high, believed to be the highest in the world to annually license private cars, of which only one is allowed per household. Gasoline is nearly three times the USA price. Tourists may not rent cars and visitors who have driver's licenses in their home countries cannot use them in Bermuda to drive cars belonging their relatives or friends. Car insurance is expensive, car leasing is not allowed. Public transport is exceptionally good for such a small island (only 21 square miles in total land area).

Being forewarned about these costs and other cost of living prices will enable you to negotiate more accurately with a prospective Bermuda employer for a realistic starting salary and benefits package to enable you to balance your monthly budget and match it to what you can afford. It's far better to know upfront what to expect so you are not surprised but can plan accordingly than to be dismayed by revelations after you arrive that were omitted. Bermuda's charms can be very attractive to those who can command high salaries to help offset the extremely high costs of living. But for those not earning those high salaries, say under US$88,000 a year where they are now employed, they might be far better off overall staying where they are than in moving to Bermuda on a Work Permit. Why? Simply because most people expecting upward mobility go abroad to places like Bermuda and rightly expect better accommodation and conditions than they have now.

Unfortunately, organizations such as Hogg Robinson and Mercer Human Resource Consulting, completely exclude Bermuda - and similar, competitive offshore business jurisdictions - from their lists of costs of living by place. 

There is no official Cost of Living Index provided by the Bermuda Government (nor is there one in the USA). The Consumer Price Index (CPI) program is the closest thing we've got to the cost-of-living index. The CPI measures changes over time in what urban consumers pay for a basket of goods and services. According to the US Bureau of Labor Statistics BLS), the CPI is the most widely used measure of inflation.

In Canada there is a website giving some details of Cost of Living there. See http://www.expatarrivals.com/canada/cost-of-living-in-canada. There is not yet any Bermuda equivalent. In the meantime, the information given below are the nearest Bermuda has to what is on offer in Canada.

The CPI frequently is called a cost-of-living index, but it differs in important ways from a complete cost-of-living measure. BLS has for some time used a cost-of-living framework in making practical decisions about questions that arise in constructing the CPI. A cost-of-living index is a conceptual measurement goal, however, not a straightforward alternative to the CPI. A cost-of-living index would measure changes over time in the amount that consumers need to spend to reach a certain utility level or standard of living. Both the CPI and a cost-of-living index would reflect changes in the prices of goods and services, such as food and clothing that are directly purchased in the marketplace; but a complete cost-of-living index would go beyond this to also take into account changes in other governmental or environmental factors that affect consumers' well-being. It is very difficult to determine the proper treatment of public goods, such as safety and education, and other broad concerns, such as health, water quality, and crime that would constitute a complete cost-of-living framework.

The Bureau of International Economic Development, a private USA-based organization specializing in confidential and accurate cost of living indices, and some World Bank (WB) economists in a private capacity (as individuals not on behalf of the WB), claim the Bermuda costs of living are more than three times those of the USA, 280% more than in Canada and 200% more than in UK. 

In this context it is significant, when considering costs of living overall, to compare the financial definitions of poverty existing between Bermuda and the USA. In Bermuda, the poverty line has been established since 2008 as an income of less than $27,000 per annum for a single person and $76,000 for a two-parent family with two children under 16. In the USA, the Government's 2010 figures are:

Bermuda's Cost of Living main factors include

It is suggested that before coming to Bermuda, potential newcomers make their own comparisons, by comparing Bermuda's costs with where they live now. The following help to justify the claim that Bermuda costs of living are more than three times those of the USA, 280% more than in Canada and 200% more than in UK.

Estimated monthly expenses budget for newcomers & visitors

This is an unofficial but carefully researched guide and budget. It has long been said - inaccurately - that Bermuda is tax free. In fact, it has a combination of direct taxes (payroll tax on income, paid by employers and employers) plus a huge range of very high and non-deductible indirect taxes paid by every consumer rich or poor, young and old.  Newcomers should know payroll and general living taxes combined translate into a 20% tax as a percentage of income. The following list should be especially useful to:

• A single newly-employed or retired person who is not Bermudian who is not married and has no children (those who do should see "School Fees" below and add them to the budget if they apply)
• A single visitor or couple or family (prices shown do not include hotel or guesthouse or efficiency unit accommodation, as they can vary so widely in price. Nor does it include their gratuities and Government Occupancy and Resort Levy charges.
• Married newcomer couples with or without children. 
• Spouses of newcomers who are not Bermudian and not married to Bermudians are excluded by law from holding many lesser-paying jobs in Bermuda which are reserved for Bermudians and their spouses only. Costs for a retired person who is not Bermudian who is not working but would have to pay real estate taxes, may easily be much higher (see "Real Estate taxes" and Homes in Bermuda. 

Salary basics 

•  Senior executives of insurance companies can earn millions of dollars annually, plus have stock and other bonuses and benefits galore.  
• The average starting salaries in a Bermuda-based but international or exempted company  - for middle management positions - is at least BDA or USA$150,000 a year, gross.  Those concerned will be appropriately degreed and professionally accredited. 
• For those in less senior positions, BDA or US$$88,350 or pro-rata a month is the salary figure used to calculate the budget shown below. Those who earn more can save more. Some serious thought should be given by expatriates on whether or not it is feasible to come. For example, a professionally qualified person who is 33 years old, earns 45,000 pounds sterling a year in the United Kingdom and pays only 500 pounds a month for a 2-bedroom flat, may not find it practical to relocate to Bermuda. Private school fees will not apply to those without children. Those who earn less in Bermuda as expatriates should trim their budgets, style of living and, if possible, cost, place and style and spaciousness of accommodation. Those whose salaries do not permit them to buy a car but a moped only, or who buy a second-hand car and insure it for third-party insurance only, or whose owner can qualify for a no-claim bonus of up to 65 percent, can also reduce the budget. 

All prices are in USA or Bermuda dollars unless shown otherwise specifically and are monthly, or pro-rated.

Air Conditioning

Essential in Bermuda from May to October to live comfortably at home or in the office. Regular air conditioning units and more expensive but more versatile Carrier ductless mini split systems are available. 

Apartment or house rental agreements

Some newcomers receive a housing allowance from their employers of up to $,3500 a month. Standard monthly rental agreements - not leases - can be purchased but they should be viewed carefully before they are signed by a tenant and landlord. 

Things newcomers should always confirm include: 

• If a standard rental agreement does not say that the tenant can park his or her own car on the premises, this should be discussed by both tenant and landlord. In most cases, you should have no problems. But where they apply, avoid like the plague premises where such a basic right is not offered. It will generally mean one of two things, either that the apartment is not legally registered as a separate apartment - in which case, you cannot legally have a car on the property - or that the landlord has assigned the property to another person (not his tenant) to keep a car there, at your expense. 
• Whether the premises were house wired recently, both for regular domestic use and for telecommunications. Can you merely plug in to a wall outlet a cable television in a bedroom, living room and kitchen? Can you move a regular telephone anywhere? Will you be able to order and get high-speed Broadband (DSL) Internet service? If not, the wiring is old and may not to be replaced at huge expense and inconvenience.
• Is the hot water heater recent or how old and if old, how old? Will the landlord pay for repairs or replacements of any older unit? A plumber can take over two weeks to come. He might promise to come but not turn up a number of times. Not checking these matters may be both costly and involve a considerable wait and stress for repairs or service.
• Another common factor is noise. Stress to your landlord that you want peace and quiet, not noise from neighbors whose indoor or outdoor  parties involve amplified music at a high volume level. You will want your windows open from time to time.

Apartment or house painting

Most monthly rental agreements will stipulate that tenants, not landlords, are responsible for all periodic internal painting and upkeep but landlords will do external maintenance and upkeep.

Boats

See under "Boats" in Watersports.

Cameras and photography

Cellular & other telephones

Cigarettes

The retail cost in Bermuda of a carton is now over $60. Prices are less for residents going overseas if ordered beforehand for delivery after checking in at the airport for outward flights.

Customs (import) Duties for returning residents or visitors

Returning Bermudians, residents and visitors should expect to pay Bermuda Government import duties on purchases overseas at a much higher rate - about 300 to 500 percent higher overall - than in the USA, Canada and United Kingdom. 

Here, your duty allowance is only US or BDA $100 (it used to be $400 until the mid 1990s) per person per month, whether for individuals or families. It is by far the least generous place in the Northern and Eastern hemispheres in terms of import duty allowances. 

If you acquire and import goods of  a greater value, the great majority of tourists and locals pay about 35 percent of the receipted or Bermuda Customs assessed value of what you bring back. Newcomers should expect to pay this too. 

In UK, USA, Canada, Australia, New Zealand, newcomers are usually exempt from Customs Duties on what they arrive with and ship in. But not in Bermuda. For example, if you are Canadian, a stay in Bermuda or elsewhere entitles you to up to a Canadian $ 700 allowance. If you're from the USA and have been in Bermuda for at least 48 hours, you're entitled to a duty free exemption of $800 per person on returning home. Additionally, gifts under $50 in value may be sent home, to people other than to yourself, every 24 hours, duty free. And antiques (over 100 years old), prints, maps, coins and stamps are all duty free. Duty free allowances and exemptions don't prohibit you from buying more. 

Nationals of EEC countries visiting another EEC country and returning to their own have a very generous duty-free allowance.

When duties apply in your own country on goods purchased in Bermuda, you'll often find them very reasonable. 

Food & liquor shopping

Hotels

Expense of hotel rooms, by jurisdiction, most expensive first, year-round average daily rates with cooked breakfast, in US$.

Sources 

• *  Institute of North American & Atlantic Cultural History, based on information collected from guests.
• ** Business Travel International, UK.

Kitchen appliances

• Fridges & fridge/freezers, from US or BDA $1385
• Kitchen electric or gas ranges and cookers, from $925.
• Microwave ovens, from $380
• Washers from $775, dryers from $850 

Newcomers employed by the Bermuda Government

This is purely a guide, to show private sector employers and employees what the Bermuda Government does for certain staff. Some private sector employers may also follow this policy, or offer rent allowances instead, if appropriate.

When it employs expatriates, return travel for candidate, spouse and up to two children if appropriate and shipping and resettlement allowances are provided by the Bermuda Government. Because of the high cost of living in Bermuda and the finite resources in a very small land area yet with one of the highest populations anywhere per square mile or kilometer, families with more than two children are not normally approved. Employment for a spouse is sometimes available (especially if the spouse has a professional qualification) but is not guaranteed. 

For newcomers it employs, the Bermuda Government assumes responsibility to find suitable, furnished accommodation for contract officers (one bedroom for a single or married person, three bedrooms for a family with two children), and rent in excess of 25% of the contract officer's salary is fully subsidized. Candidates are expected to remain at the accommodation provided for at least three months but thereafter may choose to move into accommodation of their own choice. Rent in excess of 25% of the employee's salary will continue to be subsidized within reason.

But newcomers to Bermuda should note that each year, Bermuda Government bursaries are awarded to selected Bermudian applicants undertaking a course of study at a university, college or training institution in order to acquire professional or technical qualifications specified by the Cabinet as essential or desirable for appointment to offices in the Public Service. The annual allowance is accompanied by provisional undertaking of employment in the Public Service upon successful completion of the course of study.

There is also a supernumerary program. A supernumerary trainee is a Bermudian who is professionally and or technically qualified in a chosen career and needs post-qualification experience. Supernumerary officers are given favorable consideration for appointment to positions held by contract officers. There are now over forty trainees studying in various fields in the Bermuda Government.

Plumbing

See "Apartment or House rental agreements."

Real Estate taxes

Payable by owners of apartments, condominiums and houses, at rates approximately three times more in  Bermuda than in the USA, and Canada - usually passed on indirectly to renters in rents. See Homes in Bermuda. By comparison, the annual tax rate is CA$1500 (CA$125 monthly) for a nice 1,000 square foot condo in the Toronto area. 

School fees

If your child attends a local day private day school, at about $550 a month per child. Note that the child, if not Bermudian, will not qualify for any locally-offered scholarships when of college or university age.