Do Cruise Ship Crew Pay Taxes?

You’re on the other side of the world, sailing in international waters, and so far from home you don’t even know which way around the world would be faster to fly to get there. You’re still working though and most places in the world income tax income. So, how does that work? Do cruise ship crew pay taxes?

There are so many questions floating around about cruise ship crew and a big one seems to be about whether or not cruise ship crew have to pay income taxes. Let’s talk about that.

First Off – Big Disclosure: I am not a lawyer, solicitor, tax advisor, or accountant. The information that follows is for general information purposes only. This information is based off of my experience, those experiences of people I know, and research. You should always ensure that you are paying the proper taxes for your home country/state/district. If you are unsure whether taxes are taken out of your pay talk to the cruise company you work, if you are unsure about how to go about paying/filing your taxes in your home country, speak to a licensed accountant.

Do Cruise Ship Crew Pay Taxes on their Wages?

Why yes, of course…

Actually, it’s more complicated than that (isn’t everything?). Cruise ships have crew members from all around the world. On any given cruise ship you will likely find crew members from 40+ countries. That’s not an exaggeration either, on the bigger ships you are likely to find even more than that. Keeping track of the tax requirements for employees from 40+ countries (just on one ship) would be incredibly challenging.

Just like in the rest of society, people are responsible for making sure they have paid their required taxes. While cruise ships are part of giant corporations, the crew members, those people working so hard to ensure that passengers have a great vacation – aren’t any different than people living in regular society. At the end of the day each crew member is responsible for making sure that they pay the appropriate taxes for their country/state/district.

Still though, it’s not quite as simple as that.

Do Cruise Lines Take Any Taxes Out Of Your Paycheck?

That answer is different depending on which cruise line you work for, where you are from, and even what contract type you have. Do cruise ship employees pay taxes? It’s about as complicated as Avril Lavigne was in the early 2000’s.

There Are Different Types of Contracts

Did you know that cruise ship employees aren’t always hired by the cruise line? There are a few different types of contracts out there. Primarily there are contracts where you are hired directly from the cruise line and those where you are hired through a recruitment agency or brand partner of some sort. Whether or not taxes get directly taken out isn’t entirely dependent on what contract type your on, but it can play a role in it. What country you are from can also play a role both in your contract type and in whether or not taxes are taken out. Confused yet?

If You’re From the US Working for a US Cruise Line

A lot of questions about whether or not cruise ship employees pay taxes come from people from the United States. I can’t speak for all cruise lines, but I worked for a cruise line that was a part of one of the biggest cruise corporations in the world. The company had headquarters in the United States and I am a US citizen. I was also hired directly by the cruise line and not a recruitment agency or brand partner.

In the United States when you file taxes you have to file a federal tax return and a state tax return (for most states, a few states do not have income taxes). When working for the cruise line they would withhold any federal taxes that I owed but not any state taxes. So, out of each paycheck there would be the typical federal deductions – including things like social security, but, there would be no state tax taken out.

As I am from Vermont – a state that taxes income – and the cruise line did not take any money out of my paycheck for state taxes, I am still responsible for paying my fair share as a Vermont resident. While working on the ship if I had moved and become a legal resident in a state that didn’t tax income I wouldn’t have owed additional money, but that wasn’t the case in my particular situation. At the end of the year I would get my W-2 from the cruise line and when I filed my taxes I would owe money to the state of Vermont.

So, while in this instance the cruise line is taking out some taxes from my paycheck, as with all crew members, as with all adults, I am still responsible for making sure I have paid my required taxes.

If You’re Not From the Same Country Your Company Is And You’re Hired Directly By Them

There is no one size fits all for how cruise ship workers pay their taxes. Most of the time if you are working onboard, are hired directly by the company, but aren’t from the same country that your company is headquartered out of you will have to handle paying all of your taxes and they will not withhold any towards your taxes.

This is not always strictly the case though as if your company has another branch or headquarters in another country you may be hired by that branch (still directly through the cruise line, but the side of the company that is the same country as you). In that case most likely they will withhold tax on each paycheck.

Most of the time though nothing will be withheld from your paycheck towards taxes though. At the end of each pay period you would be issued a pay-stub (of sorts, it may be a full page print out) detailing your earnings. You would then use this information when you file/report your income for the purpose of taxes with your government.

Important to Note:
Many crew members are paid through direct deposit (the money is transferred directly into their bank account). There are some positions and contract types that are paid in cash. Yes, you read that correctly – they are paid in cold hard cash. Most people in these positions will find places like Western Union ashore to then transfer the money home.

Bank Cards:
In recent years cruise companies have partnered with various banks to have bank cards (Brightwell is currently a popular choice) issued to crew members that their pay is loaded onto.

What If You’re On One of Those Other Contract Types?

All those other contract types – well, let’s say 99/100 times – you will not have any taxes withheld from your paycheck. So do cruise ship workers pay taxes? Each crew member is responsible for paying the taxes in their own country.

Interestingly, you can have people doing the same job that are on different contract types. One may have been hired through a recruitment agency (and from a country where the cruise line uses that recruitment agency), whereas another may have been hired directly through the cruise line (and most likely not from a country that has an agreement with a recruitment agency).

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Does The Cruise Line Enforce Crew to Pay Their Taxes?

Not anymore than any other corporation enforces their employees to pay taxes. If you hire a contractor, say they are going to replace the roof on your house. You are employing them – they’re offering a service that you’re paying for – do you then make sure they file their taxes? No, you trust that they will pay the necessary taxes.

Crew members are kind of like the contractor fixing your roof. They do a job, the cruise line pays them for it, then the cruise ship workers pay the taxes on it. As members of society in general we assume that if people don’t pay their taxes then their respective governments will handle it. This is pretty much how it is for cruise line employees.

But, I’ve Heard About Crew Saying They Don’t Have to Pay Income Taxes So Is Working on a Cruise Ship Tax Free?

There are some countries where if you are outside of the country for more than half of the year you are not required to pay tax on your income.

Most people that work on cruise ships are away from their home country for half the year. For many that is literally one contract.

There are also some countries that don’t tax any income earned outside of the country (any foreign income).

Let’s strongly clarify something though:

Do you pay tax working on a cruise ship? You are responsible to file your taxes. Even if you live in a place that doesn’t require you to pay income tax if you are out of the country for a certain amount of time each year, and even if you are out of the country for more than that amount of time each year – even if you are from a country that doesn’t require you to pay tax on any foreign earned income –

You are still liable and responsible to properly report and file your taxes with your government.

You don’t get to determine that you aren’t required to pay your taxes, it’s the government that determines that when you file your taxes. If you don’t have to pay income taxes that particular year it really means that when you file your taxes the government says, “nope, you’re good, you aren’t required to pay X,Y, or Z”.

When this happens you get excited – thank the accountant you’re working with for filing everything correctly – and maybe enjoy an extra pint at the pub.

Want a bit more info on cruise ship pay? Check out this article from cruiseshipjobs.com.

Do Cruise Ship Crew Pay *Income* Taxes?

Yes, but it mostly depends on where you are from. Whether it is withheld out of their paycheck depends on where they are from; whether cruise ship workers have to pay taxes on their income earned while at sea depends on where they are from.

And, just like adults around the rest of the world – they’re responsible for filing their taxes and if what they owe hasn’t been withheld throughout the year then they’re responsible for paying.