Employer of Record in Mozambique

An Employer of Record (EOR) in Mozambique is a company that legally hires employees on your behalf. This means you can build a team in Mozambique without setting up a local legal entity. The EOR takes care of essential HR tasks like payroll, taxes, benefits, and employment contracts, ensuring you comply with Mozambique's labor laws. Rivermate is an EOR provider that can help you with this.

How an Employer of Record (EOR) Works in Mozambique

Using an EOR in Mozambique simplifies the process of hiring employees. Here is a step-by-step look at how it generally works:

1. You Find the Talent: You identify the candidate you want to hire in Mozambique.
2. The EOR Hires Them: The EOR legally hires the employee on your behalf. They handle all the necessary paperwork and draft a locally compliant employment contract.
3. Onboarding: The EOR manages the onboarding process, collecting personal information and registering the employee for taxes and social security.
4. Payroll and Benefits: The EOR handles monthly payroll, including calculating wages, deductions, and taxes. They also administer employee benefits.
5. Ongoing Compliance: The EOR stays up-to-date with Mozambique's labor laws to ensure ongoing compliance, protecting you from legal risks.
6. You Manage Your Team: While the EOR handles the legal and administrative side of employment, you manage your employee's day-to-day work and responsibilities.

Benefits of Using an EOR for Hiring in Mozambique

Using an EOR to hire in Mozambique offers several key advantages. It allows you to enter the market and build a team quickly and efficiently, without the cost and complexity of establishing a local entity.

• Faster Market Entry: You can hire employees and start operations in Mozambique much faster than if you had to set up your own company.
• Reduced Costs: Avoid the significant expenses associated with establishing a legal entity in a new country.
• Compliance Assurance: EORs have expertise in local labor laws, ensuring that your hiring and employment practices are fully compliant. This minimizes your legal risks.
• Simplified HR: The EOR manages all the administrative HR tasks, including payroll, taxes, and benefits. This frees you up to focus on your core business activities.
• Access to Expertise: You benefit from the EOR's local knowledge of business practices and employment regulations in Mozambique.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Mozambique includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Mozambique.

Hiring in Mozambique presents a great opportunity to tap into a dynamic and growing economy. The country has a versatile economy and is seeing growth in sectors like mining, tourism, and transportation. To hire legally, you can either set up your own local entity or partner with an Employer of Record (EOR). An EOR simplifies the process by managing employment contracts, payroll, and compliance with local labor laws.

Employment contracts & must-have clauses

While not always mandatory, it is highly recommended to have a written employment contract in Mozambique to avoid disputes. All contracts must be in Portuguese. There are two main types of contracts:

• Indefinite-term contracts: These are for ongoing work with no set end date.
• Fixed-term contracts: These are for temporary work, such as a specific project or seasonal work, and cannot exceed two years, including renewals.

A valid employment contract must include the following:

• Full identification of both the employer and employee
• The place of work
• A description of the job duties
• The start date of employment
• The duration of the contract (for fixed-term agreements)
• Salary and benefits information
• Working hours
• The length of the probation period

Probation periods

Probation periods in Mozambique allow you and the employee to assess if the working relationship is a good fit. The maximum length of a probation period depends on the type of role and contract.

During the probation period, either you or the employee can terminate the contract with seven days' written notice.

Working hours & overtime

The standard workweek in Mozambique is 48 hours, typically 8 hours per day. Overtime is allowed but is limited to 2 hours per day, 8 hours per week, and 200 hours per year.

Overtime pay rates are as follows:

• Normal workdays: 150% of the regular hourly wage
• Weekends and public holidays: 200% of the regular hourly wage

Public & regional holidays

Employees in Mozambique are entitled to paid days off for public holidays. If a public holiday falls on a Sunday, the following Monday is considered a day off.

Here are the public holidays for 2025:

Hiring contractors in Mozambique

You can hire independent contractors in Mozambique for project-based or specialized work. This offers flexibility and can reduce the overhead costs associated with full-time employees. However, it's crucial to correctly classify workers to avoid legal risks.

An independent contractor:

• Controls their own work
• Provides their own tools and equipment
• Can work for multiple clients
• Is not integrated into the company's core business

Misclassifying an employee as a contractor can lead to penalties, including back payment of wages, benefits, and taxes. An EOR can help you mitigate this risk by ensuring your workers are classified correctly according to Mozambican labor law. This helps you avoid fines and legal issues while still giving you access to the talent you need.

Understanding compensation and payroll in Mozambique is key to hiring and operating your business in the country. Payments to employees are made in Mozambican Metical (MT). All employment contracts need to be in writing. They should include important details like compensation and the start date of employment. The standard pay cycle is monthly, usually processed by the last working day of the month.

Payroll cycles & wage structure

In Mozambique, you will typically pay your employees monthly. Some industries, like agriculture and construction, might pay workers weekly or bi-weekly.

When you pay your employees, you need to provide a salary slip. This document should clearly show:

• Gross salary, which includes basic pay and any allowances.
• A breakdown of all deductions.
• The final net salary after all deductions.

Overtime & minimums

The standard work week in Mozambique is 48 hours, with a maximum of 8 hours per day. If an employee works at night, you must pay them 125% of their normal wage.

The minimum wage is not a single national rate. It varies across different sectors of the economy. The government reviews and adjusts these rates.

Employer taxes and contributions

As an employer, you are responsible for contributing to social security for your employees.

Employee taxes and deductions

You must withhold taxes and social security contributions from your employees' salaries.

In Mozambique, providing the right benefits and leave is key to hiring and keeping great talent. It's not just about following the law. It's about building a strong team. Understanding the local rules for time off and other benefits is your first step.

Statutory leave

Mozambique's labor laws outline specific types of leave you must provide.

• Annual Leave: In the first year of employment, employees get 12 days of paid leave. After the first year, this increases to 30 days annually.

• Sick Leave: Employees can take up to 15 paid sick days per year. This can be taken as 5 non-consecutive days per quarter. For longer illnesses, the social security system may provide benefits for up to a year.

• Maternity Leave: Female employees are entitled to 90 days of maternity leave. The social security system pays for the first 60 days, while the remaining 30 are unpaid.

• Paternity Leave: Fathers receive seven days of unpaid paternity leave.

Public holidays & regional holidays

Your employees are entitled to paid time off for national holidays. If a holiday falls on a Sunday, the following Monday is a day off.

Typical supplemental benefits

To attract and retain the best employees, you'll want to offer more than the minimum. Here is a look at both required and common additional benefits.

How an EOR can help with setting up benefits

Setting up a benefits plan in a new country can be complex. An Employer of Record (EOR) simplifies this process for you.

An EOR acts as the legal employer for your team in Mozambique. They handle all the administrative tasks, including:

• Compliance: An EOR ensures your benefits packages meet all of Mozambique's labor laws.
• Payroll: They manage payroll and make sure all social security contributions are paid correctly and on time.
• Benefits Administration: An EOR can enroll your employees in both mandatory and supplemental benefit plans.
• Local Expertise: You get access to local HR and legal experts who understand the market and can help you create a competitive benefits package.

Using an EOR allows you to focus on growing your business while they take care of the complexities of local employment.

Let's talk about ending an employment contract in Mozambique. The process is guided by specific rules to protect employees from unfair dismissal. You can't just let someone go without a valid reason. Terminations generally happen for a few reasons: both you and the employee agree, a fixed-term contract ends, there are business-related reasons like restructuring, or for disciplinary issues. For any termination you start, you need to follow a clear procedure, which includes giving written notice and explaining the reasons.

Notice periods

When you decide to terminate an employment contract, you must provide the employee with a written notice. The length of this notice period depends on how long the employee has worked for you.

If an employee decides to leave, they also need to provide you with a written notice stating their last day of employment.

Severance pay

If you terminate an employee for reasons not related to their conduct, they are entitled to severance pay. The amount of severance pay is calculated based on the employee's salary and their years of service. The calculation is tiered based on a multiple of the national minimum wage at the time of termination.

Here is a breakdown of how it works:

• For employees earning 1-7 times the national minimum wage: 30 days of pay for each year of service.
• For employees earning 8-10 times the national minimum wage: 15 days of pay for each year of service.
• For employees earning 11-16 times the national minimum wage: 10 days of pay for each year of service.
• For employees earning more than 16 times the national minimum wage: 3 days of pay for each year of service.

How Rivermate handles compliant exits

Navigating employee terminations in another country can be complex. At Rivermate, we manage the entire offboarding process to ensure you stay compliant with all of Mozambique's labor laws.

Here’s how we make it simple and safe for you:

• Clear Process: We handle all the necessary steps for a compliant termination, from drafting the written notice to calculating the final pay.
• Legal Compliance: We ensure that every termination meets the legal requirements for notice periods and severance pay, protecting you from potential legal disputes.
• Documentation: We take care of all the required paperwork, ensuring everything is correctly filed with the local authorities.
• Expert Guidance: Our team provides you with expert advice on the best way to handle each unique situation, so you can make informed decisions.

We help you manage the end of the employment relationship correctly and respectfully, giving you peace of mind.

Navigating Mozambique's immigration system requires understanding a few key steps. To work here legally, you need both a work permit and a residence permit (often referred to as a work visa). Your employer must first get a work authorization for you from the Ministry of Labour. Only after this is approved can you apply for the visa to enter the country and then the residence permit once you arrive. Mozambique uses a quota system for foreign workers, which can affect how easily your employer can hire you.

Employment visas & sponsorship realities

Getting a work permit in Mozambique is a multi-step process that your employer initiates. The employer must be a registered entity in Mozambique to sponsor foreign workers.

The government uses a quota system to manage the number of foreign employees a company can hire.

• Within Quota: If your employer is within their hiring quota, the application is more straightforward.
• Outside Quota: If the company has exceeded its quota, the process becomes much more difficult. They must prove to the Ministry of Labour that no local candidate could fill your role.

The general application process looks like this:

1. Your employer submits a work permit application to the Ministry of Labour.
2. Once approved, you use the authorization letter to apply for a work visa at a Mozambican embassy or consulate in your country.
3. After you enter Mozambique, you must apply for a residence permit.

Processing times can vary, typically taking between 30 and 90 days, but can sometimes take up to six months, so it's important to start well in advance.

An Employer of Record (EOR) can sponsor work permits, but they must be a legally registered entity in Mozambique and comply with the hiring quotas set by the Ministry of Labour. Work permits are often specific to the location where the work will be performed.

Business travel compliance

If you are traveling to Mozambique for short-term business activities, you need a Business Visa. This visa is for things like attending meetings, negotiations, or conferences. It is not for performing hands-on work or engaging in formal employment.

Key features of a Business Visa:

• Duration: Typically granted for up to 90 days.
• Stay Limit: Each stay usually cannot be longer than 30 consecutive days.
• Requirement: You will likely need an invitation letter from a Mozambican company to apply.

This visa keeps you compliant for short trips. If the nature of your work involves more than meetings, you need to explore the proper work permit route.