Employer of Record in Papua New Guinea

An Employer of Record (EOR) in Papua New Guinea helps you hire employees without setting up a local company. Think of an EOR as your local HR partner. It legally employs workers on your behalf, handling all the administrative tasks that come with employment. This allows you to tap into the talent pool in Papua New Guinea quickly and efficiently. For companies looking to expand, providers like Rivermate offer a straightforward path to hiring in new countries. An EOR takes on the responsibility for payroll, taxes, benefits, and compliance with local labor laws, which can be complex.

How an Employer of Record (EOR) Works in Papua New Guinea

Using an EOR simplifies the process of hiring in Papua New Guinea. Here is how it typically works:

1. You Find the Talent: You identify the candidate you want to hire in Papua New Guinea.
2. The EOR Hires Them: The EOR legally hires the employee under its local business entity. This means the EOR is the official employer in the eyes of the law.
3. Onboarding and Contracts: The EOR manages the onboarding process and drafts a locally compliant employment contract. This ensures all agreements meet the standards set by Papua New Guinea's Department of Labour & Industrial Relations (https://www.dlir.gov.pg/).
4. Payroll and Benefits: The EOR handles all aspects of payroll, including taxes, social security contributions, and employee benefits. They make sure your employees get paid correctly and on time.
5. Ongoing HR Support: The EOR provides continuous HR support, managing things like paid time off, sick leave, and other employment-related matters.

Why use an Employer of Record in Papua New Guinea

Using an EOR in Papua New Guinea is a practical solution for businesses that want to grow their teams without the usual headaches of international expansion. It saves you time and money, but the benefits don't stop there.

• Avoid Setting Up a Company: The biggest advantage is that you don't need to establish a legal entity in Papua New Guinea. This process can be time-consuming and expensive, involving registration with the Investment Promotion Authority (https://www.ipa.gov.pg/).
• Stay Compliant with Local Laws: Papua New Guinea has its own set of labor laws and regulations. An EOR has the local expertise to ensure you are always in compliance, reducing your legal risks.
• Hire Faster: Without the need to set up a local entity, you can onboard new employees in a fraction of the time. This allows you to get your team working on your business goals much sooner.
• Focus on Your Business: By outsourcing HR and administrative tasks, you can concentrate on your core business operations and managing your team's performance.
• Access to Expertise: EORs have in-depth knowledge of the local market, including competitive salaries and benefits packages. This helps you attract and retain top talent in Papua New Guinea.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Papua New Guinea 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 Papua New Guinea.

Hiring in Papua New Guinea has its own set of rules and cultural practices. The country's employment landscape is governed by the Employment Act, which lays out the basic rights and responsibilities for both employers and employees. It's a good idea to get familiar with these regulations to make sure you're hiring in a compliant and fair way.

Employment contracts & must-have clauses

In Papua New Guinea, you can have either a written or a verbal employment contract. However, it is highly recommended to have a written contract to avoid any confusion down the line. If there's a dispute and no written agreement, the employee's version of events is often favored.

Your employment contracts can be for a fixed term or an indefinite period. Regardless of the type, make sure to include these key details:

• Names of both parties
• Job title and description
• Work location
• Start date
• Salary and payment frequency
• Working hours
• Leave entitlements
• Probation period
• Termination conditions

Probation periods

You can include a probation period in your employment contracts to assess a new hire's suitability for the role. There's no legally mandated maximum or minimum length for probation, but a period of one to three months is common. The length of the probation period should be clearly stated in the employment contract.

Working hours & overtime

The standard workweek in Papua New Guinea is typically 40 to 44 hours, spread over five or six days. An employee cannot work more than 12 hours in a single day, including overtime.

Here's a quick breakdown of overtime pay:

Public & regional holidays

Employees are entitled to paid time off for public holidays. If an employee needs to work on a public holiday, they must be paid double their standard rate.

Here are some of the public holidays in Papua New Guinea for 2025:

• New Year's Day - January 1
• National Remembrance Day of the Late First Prime Minister - February 26
• Good Friday - April 18
• Easter Saturday - April 19
• Easter Sunday - April 20
• Easter Monday - April 21
• King's Birthday - June 17
• National Remembrance Day - July 23
• National Repentance Day - August 26
• Independence Day - September 16
• Christmas Day - December 25
• Boxing Day - December 26

Hiring contractors in Papua New Guinea

You can hire independent contractors for short-term or project-based work. This can be a flexible option, as contractors are responsible for their own taxes and insurance. However, it's crucial to correctly classify your workers.

Misclassifying an employee as an independent contractor can lead to penalties under the Employment Act. The main things to consider are the level of control you have over the worker, the hours they work, and the benefits you provide.

An Employer of Record (EOR) can help you mitigate the risks of misclassification. An EOR acts as the legal employer for your workers in Papua New Guinea, taking on the responsibility for compliance with local labor laws, payroll, and taxes. This allows you to work with talent in Papua New Guinea without needing to set up a local legal entity.

Understanding compensation and payroll in Papua New Guinea is straightforward. It involves a clear set of rules for paying your team. You need to follow guidelines for how often you pay, how much you pay, and what you contribute and deduct. This ensures you are compliant with local laws and that your employees are compensated correctly.

Payroll cycles & wage structure

You should pay regular employees at least every two weeks. If you and an employee agree, you can pay them monthly. For casual employees, you must pay them at the end of each day's work.

Salaries can vary a lot. They depend on the industry, the employee's role, and their experience. For example, jobs in mining or banking often pay more than jobs in agriculture or retail.

Beyond the basic salary, many employers offer allowances. These can help cover costs like housing or transportation.

Overtime & minimums

The minimum wage in Papua New Guinea is K3.52 per hour. A standard work week is 40 hours. If an employee works more than eight hours in a day from Monday to Saturday, you must pay them overtime. Overtime pay is 1.5 times their normal hourly rate. On Sundays and public holidays, the overtime rate is double the usual pay.

Employer taxes and contributions

As an employer, you have a key responsibility to contribute to your employees' superannuation (pension) funds.

Employee taxes and deductions

You must withhold taxes and superannuation contributions from your employees' pay.

In Papua New Guinea, providing employee benefits and leave goes beyond just following the law. It's about creating a supportive workplace that attracts and keeps talented people. The country has a set of required benefits, but many companies offer more to stay competitive. Understanding both the legal requirements and common practices is key to managing your team effectively.

Statutory leave

Papua New Guinea's laws outline several types of mandatory leave for employees.

• Annual Leave Employees are entitled to 14 consecutive days of paid leave for each year of continuous service. This leave can be accumulated for up to four years if you and the employee agree.

• Sick Leave After six months of employment, an employee is entitled to six days of paid sick leave per year. A medical certificate may be required to verify the illness. Unused sick leave can accumulate up to 18 days.

• Maternity Leave Female employees are entitled to unpaid maternity leave. The length of leave depends on their service period. An employee with at least 12 months of service gets 108 days, while those with at least six months of service receive 90 days.

Public holidays & regional holidays

Employees are entitled to paid time off for national public holidays. If an employee works on a public holiday, they are typically paid at a higher rate.

Typical supplemental benefits

To attract and retain employees, many businesses offer benefits beyond the legal requirements.

How an EOR can help with setting up benefits

An Employer of Record (EOR) can simplify the process of setting up and managing employee benefits in Papua New Guinea. An EOR acts as the legal employer for your staff, handling all administrative tasks.

An EOR can help you:

• Ensure compliance An EOR stays up to date with local labor laws, making sure your benefits packages meet all legal requirements.
• Administer benefits They manage everything from health insurance to pension contributions.
• Handle payroll and taxes An EOR takes care of payroll processing and tax deductions related to benefits.
• Draft employment contracts They can create employment agreements that clearly outline all benefits and leave entitlements.

Using an EOR allows you to focus on your business operations while they handle the complexities of employee benefits and compliance.

When your business relationship with an employee in Papua New Guinea ends, you need to follow a clear process. This process, known as termination or offboarding, is guided by local employment laws to ensure fairness for both you and your employee. Following the correct steps for notice periods, final payments, and severance is essential for a smooth and compliant exit.

Notice periods

To terminate an employment contract in Papua New Guinea, you must provide the employee with a minimum notice period. The length of this notice depends on how long the employee has worked for you.

You should provide this notice in writing. Alternatively, you can pay the employee their regular wages for the notice period instead of having them work. This is known as payment in lieu of notice.

Severance pay

Employees in Papua New Guinea may be entitled to severance pay if they are dismissed without cause. This is especially true for employees who have been with the company for a long time. The amount of severance pay can vary based on the employee's length of service and the specific reasons for the dismissal. If an employee is laid off due to redundancy, they may also be entitled to severance pay.

How Rivermate handles compliant exits

Navigating employee exits in a different country can be complex. At Rivermate, we simplify this process for you. We ensure that every termination and offboarding process in Papua New Guinea is fully compliant with local labor laws.

Here’s how we handle it:

• Compliance check: We make sure every step, from notice periods to final payments, follows the legal requirements.
• Clear documentation: We manage all necessary paperwork to create a clear record of the termination process.
• Final pay calculation: We accurately calculate all final payments, including outstanding wages, accrued leave, and any required severance.
• Guidance and support: We provide you with clear guidance throughout the process to ensure a respectful and professional exit for your employee.

Getting the right visas and work permits in Papua New Guinea (PNG) is a two-step process. First, you need a work permit from the Department of Labour and Industrial Relations. Once you have the work permit, you can then apply for an employment visa from the Immigration and Citizenship Authority (ICA). Think of the work permit as the permission to hold a specific job, and the visa as the permission to enter and live in the country while you do that job. The employer is responsible for sponsoring both the work permit and the visa.

Employment visas & sponsorship realities

When you hire someone to work in Papua New Guinea, your company must act as their sponsor. This means you need a registered legal entity in the country to handle the application process. An Employer of Record (EOR) can serve as your legal entity in PNG, allowing you to hire and sponsor workers without setting up your own local company.

Here are the practical routes for employment visas:

• Long-Term Employment Visa: This is the standard option for full-time employees. It's typically valid for up to three years and requires employer sponsorship. Your EOR can manage this sponsorship for you.
• Short-Term Work Visa: For temporary projects or assignments, this visa allows employment for up to six months.
• Restricted Employment Visa: This visa is for short-term roles requiring specialized skills not available locally. It allows for a stay of 30 days or less at a time, with up to four entries in a 12-month period.

An EOR cannot sponsor independent contractors. Contractors must handle their own tax and legal compliance. The key to a successful application is proving that a local candidate could not fill the role.

Business travel compliance

For short-term business trips, you do not need a work permit. Instead, you need a business visa. This visa is for activities like attending meetings, negotiating contracts, or exploring investment opportunities. You cannot perform work on a business visa.

There are two main types of business visas:

To get a business visa, you will generally need:

• A valid passport with at least six months' validity.
• A letter from your company explaining the purpose of your visit.
• An invitation letter from your business contact in PNG.
• Proof of onward or return travel.