It's July 2022, have you adjusted your NIB Rate Ceiling?
That's fine. The intention of this article is to help business owners, accounts and human resource professionals (sometimes all one person) like yourselves understand what the NIB ceiling is and how to adjust it.
TL;DR - The NIB wage ceiling has increased by 4.9%. You will need to make these adjustments in your spreadsheet or payroll application to correctly calculate NIB but if you use the local solution; The Payroll App, you won't have to.
In 2010, NIB introduced automatic adjustments to the wage ceiling to occur every other year (biennial). The adjustments were to be based on the retail price index plus an additional 2%. The retail price index is a list of the prices of typical goods which shows how much the cost of living changes from one month to the next. In the Bahamas, the government department responsible for reporting on this index is the Department of Statistics. The Department of Statistics determined that in 2021, the Retail Price Index was 2.9%. This means that the percentage increase to be applied to the current wage ceiling is 4.9% (2.9% + 2% = 4.9%).
Take a look at this table that illustrates the change in the wage ceiling.
As of June 30 2022
As of July 1 2022
+ $30 ($1.17)
+ $130 ($5.07)
As an employee, what does this mean?
If you make up to $740 weekly ($1,480 bi-weekly) then you will go home with just $1.17 less or $2.34 less if you are paid bi-weekly. If you are monthly paid and make up to $3077 per month, then you will go home with $5.07 less. So it's clear that while many may be affected this increase will not affect persons paid at or near minimum wage which is the majority of workers in the country. And, for such a small increase, your minimum benefit and assistance rates have also increased as displayed in the two tables below.
As an employer, What do I need to do or change?
Based on how you run your business payroll, the changes you need to make involve setting the new wage ceiling to the new July 2022 rate as shown in the table above. The National Insurance Board provides a easy to use form on their website.
To use the NIB provided form:
Navigate to https://www.nib-bahamas.com/home
In the right menu click 'Hospitality form' if you are in a hospitality industry such as tourism or dine-in restaurant. If not, select 'Non Hospitality Form'. The appropriate form will be downloaded and open in your spreadsheet application.
Fill in the form with your employee details and follow the provided instructions to submit.
Note: This form is provided by NIB free of charge and is usually updated with the most recent wage ceilings and rates but we recommend paying attention to the calculations.
To use your accounting or payroll software:
Launch your payroll application
Navigate to the appropriate settings where these changes would normally be setup (different for each application).
Note: You may need to reach out to your application provider if you have forgotten how to access these settings. You want to ensure you capture the correct NIB at payroll time because you are prohibited from deducting missed or erroneous NIB from an employees future salary.
If you use The Payroll App:
For users of The Payroll App there are no changes to make at all. This is because, being a homegrown solution, The Payroll App is specifically tailored to do Payroll Better in The Bahamas. Any payroll ran after July 1, 2022 using The Payroll App will automatically have the new NIB wage ceiling applied. The same applies for any NIB rate changes, or future biennial wage ceiling adjustments.
Basic Terms & Definitions
The National Insurance Board or NIB in layman's term provides a social safety net for Bahamian citizens and employees. They are responsible for some income replacement for involuntary loss of income.
The wage ceiling is the limit on how much income an individual can insure with NIB.
Retail price index is a list of the prices of typical goods which shows how much the cost of living changes from one month to the next.
If you'd like a bit more detail about the calculations, or to view the benefit rate table, download and read the official notice from The National Insurance Board below.