Zambia – Employer of Record & Payroll
Africa Deployments (ADS) Zambia offers our clients Employer of Record solutions in Zambia covering all of the regions within. As your Employer of Record, we offer full time employment or fixed terms contracts based on your requirements in Zambia for locals or work permits for expatriates. ADS will take care of the work permit under our umbrella and will issue local work contracts to your contractors. We will also advise our client’s on best Human Resource (HR) practices when setting up the employee’s locally in Zambia. We work with a large number of development agencies and NGO’s in addition to working with the private sector.
ADS as your Employer of Record, takes care of the local tax & PAYE remittances to the Revenue Services on a monthly basis ensuring that they are fully compliant with the law. We will also ensure that their salaries are paid on time monthly and issue them with their pay slips.
In addition to our services we can offer you the employee in Zambia, Medical, Disability, Life and Workmen’s Compensation Insurances.
Zambia, in southern Africa, is a landlocked country of rugged terrain and diverse wildlife, with many parks and safari areas. On its border with Zimbabwe is famed Victoria Falls – indigenously called Mosi-oa-Tunya, or “Smoke That Thunders” – plunging a misty 108m into narrow Batoka Gorge. Spanning the Zambezi River just below the falls is Victoria Falls Bridge, a spectacular viewpoint.
What income is Taxable in Zambia:
Any individual who works and lives in Zambia for more the 183 days a year will be subject to local taxes in Zambia. The Taxable income will be based on emoluments which include, wage, overtime, leave pay, commission, fee, bonus, gratuity, benefit, allowances, pension or annuity paid, given or granted under any employment or office held. All of these are considered part of taxable income and will be subject to PAYE. Cars and accommodation provided by the employer will not be taxed and employer will be liable for this tax.
Cash benefits paid in the form of allowances will be taxed in accordance with the Zambia Tax Authority for PAYE. These benefits are constituted as housing, car / transport / fuel, mobile phone / data, study and any form of allowance that is considered as a cash benefit to the employee.
Non-Resident Contractors are taxed as a flat rate of 20%. Expatriates in Zambia are subject to Zambian tax rates and there are no special reliefs or concessions.
What type of leave is allowed in Zambia:
• Annual leave – 2 days minimum per month over a 12 month period
• Sick leave – Short term contracts – 1 paid day for every 26 working days thereafter half pay for the equivalent of next 26 working days. Long term contracts – full day pay during first 3 months of sick leave and half pay for next 3 months of sick leave
• Compassionate leave – full pay with minimum of 12 days per calendar year
• Family responsibility leave – worked 6 months or more entitled to 7 days paid leave per calendar year. Employee is entitled to 3 days paid leave per year
• Mothers day – Female employee is entitled to 1 days absence from work each month without having to provide any reasons or medical certificates.
• Paternity leave – Male employee who remains in the employ for 12 consecutive months entitled to 5 continuous working days
• Maternity leave – Female employee is entitled to 14 weeks maternity leave (6 weeks minimum must be taken after delivery).
What income is exempt from taxes in Zambia:
• Ex-Gratia / by favour Payments
• Medical Expenses or Medical Discharge, Funeral expenses
• Employment Expenses
• Fringe Benefits that cannot be converted into cash
• Charitable Contributions
Can you give Fringe Benefits:
Yes you can but keep in mind that Fringe Benefits will be subject to employee PAYE tax. Only benefits that cannot be converted to cash will not be subject to tax. If the employer covers some of the employees expenses i.e. mobile phone then it must be subject to PAYE tax and either the employer will cover this portion for the employee or the employee will bear the PAYE tax.
What are the Employer & Employee contributions in Zambia:
• National Pension Scheme Authority (NAPSA) – Ceiling cap per month ZMK 1,149.60 (Employer & Employee each contribute) – 10% of employees monthly gross salary (ceiling cap)
• National Health Insurance (NHIF) – 1% (Employer & Employee each contribute on monthly gross salary)
Is there Gratuity payments for termination in Zambia:
An employer must pay the employee a gratuity at a rate of not less than 25% of the basic salary earned during the contract period. If the contract is terminated prior to the contract term the employer must payout the pro-rata amount in accordance with the contract period served.
What Double Tax Treaties are in place in Nigeria:
• South Africa
Get in touch with one of our consultants should you have any further questions regarding our Employer of Record solutions or only require a payroll solution in Zambia. ADS is an industry partner of Humentum.