Papua New Guinea

Understanding market competitive salaries in Papua New Guinea (PNG) is crucial for both employers and employees. Offering competitive compensation attracts and retains top talent, while ensuring employees receive fair value for their skills and experience.

Factors Influencing Market Competitiveness

Several factors influence what constitutes a competitive salary in PNG:

• Job Title and Industry: Specialization and industry significantly impact salary expectations. For instance, Country Managers/Directors in PNG command a higher average salary compared to Policy Officers.
• Experience and Qualifications: Employees with extensive experience and relevant qualifications typically earn more than those with less.
• Location: Salaries can vary depending on the region. Urban centers like Port Moresby generally offer higher salaries compared to rural areas.
• Company Size and Reputation: Multinational corporations or established local businesses may offer more competitive salaries than smaller companies.

Researching Competitive Salaries

There are several resources available to help research market competitive salaries in PNG. Websites like Paylab.com provide user-submitted salary data for various positions in PNG. While self-reported data may have limitations, it offers valuable insights into current salary trends. Another resource, Salary.com, offers salary information based on job titles, locations, and company sizes. While not PNG-specific, it can provide a general benchmark for some positions.

Additional Considerations

Beyond base salary, PNG employers should consider offering a comprehensive benefits package to remain competitive. This may include health insurance, paid time off, and retirement contributions.

Papua New Guinea sets its minimum wage standards through a government body known as the Minimum Wages Board (MWB). These regulations are outlined in the Industrial Relations Act 1962.

Minimum Wage Board Determinations

The MWB issues determinations that set the minimum wage for various categories of workers. These determinations are legally binding and employers are required to comply.

Key Aspects of Minimum Wage Determinations

• Monetary Value: The determinations specify the minimum wage amount, typically presented as an hourly or weekly rate.
• Review and Adjustments: The MWB periodically reviews minimum wage rates and may adjust them based on economic factors. There is no set timeframe for reviews, but past practices suggest adjustments can occur after several years.
• Applicability: Determinations may apply nationwide or to specific sectors or regions within Papua New Guinea.
• Important Note: The most recent publicly available Minimum Wage Board Determination is from 2014, setting the minimum wage at PGK 3.50 per hour. However, it's crucial to acknowledge the possibility of subsequent revisions that may not be readily available online.

Employer Obligations

Under the Industrial Relations Act, employers in Papua New Guinea have the following obligations regarding minimum wage:

• Paying the Minimum Wage: Employers must pay their workers no less than the minimum wage rate as defined in the applicable MWB Determination.
• Record Keeping: Employers are required to maintain proper records of employee wages and hours worked to ensure compliance with minimum wage regulations.
• Non-compliance with minimum wage regulations can lead to penalties for employers.

In Papua New Guinea, labor laws mandate certain benefits for employees, but many companies offer additional perks to attract and retain talent. Here, we delve into the different types of bonuses and allowances you might encounter in PNG.

Mandatory Benefits

Papua New Guinea adheres to a set of mandatory benefits outlined in the national labor laws. These include:

• Annual Leave: Employees are entitled to 14 days of paid vacation leave for each year of service.
• Public Holidays: Paid time off is granted for all national holidays.
• Sick Leave: Up to six days of paid sick leave are provided upon presentation of a medical certificate.
• Maternity Leave: Female employees receive six weeks of unpaid maternity leave after childbirth.
• Overtime Pay: Employees must be compensated for working overtime hours.
• Notice Period: Both employers and employees are required to provide a notice period before termination.

Optional Bonuses and Allowances

While not mandated by law, many Papua New Guinean companies offer additional benefits to make their compensation packages more attractive. These can include:

• Housing Allowances: Employers may offer financial assistance with housing costs, especially in expensive locations.
• Holiday Bonuses: Some companies provide performance-based or annual bonuses around holidays.
• Transportation Stipends: To help with commuting expenses, employers might offer allowances for transportation.
• Education Expenses: In certain cases, companies may contribute towards employee education and training programs.
• Meal Allowances: Some workplaces provide meal allowances or have subsidized cafeterias.
• Utility Expenses: Financial assistance might be offered to cover utility bills.

Additional Notes

It's important to remember that these are just examples, and the specific benefits offered will vary depending on the company, industry, and position. Always refer to the individual employment contract for a complete picture of the compensation and benefits package.

In Papua New Guinea, payroll cycle practices are influenced by both legislation and employer discretion.

Pay Frequency

The Industrial Relations Act (IRA) stipulates that full-time employees should be paid no less frequently than every two weeks (fortnightly). However, a longer pay cycle of up to one month is permissible, but only through a written agreement between the employer and employee.

Payslips and Transparency

While there's no official mandate for payslip issuance in Papua New Guinea, it's recommended that employers provide payslips for transparency and record-keeping purposes. These payslips should detail gross pay, deductions, and net pay delivered.

Taxation and Deductions

Employers are responsible for withholding income tax through the Pay As You Earn (PAYE) system and remitting it to the Internal Revenue Commission (IRC). Standard deductions for social security contributions also apply. Employers contribute 8.4% of an employee's gross salary (excluding overtime, bonuses, and commissions) towards social security, while employee contributions may vary depending on their specific scheme.

Public Holidays and Overtime

Papua New Guinea recognizes numerous public holidays. Work performed on these days typically incurs overtime pay at the employee's hourly rate. Specific regulations around public holiday pay might be outlined in individual employment contracts or collective agreements. Overtime work attracts additional pay. The rates vary depending on the day and time worked. For instance, overtime on weekdays (excluding Sundays and public holidays) is generally paid at one and a half times the regular hourly rate, while Sundays attract double the rate.

Consulting with a qualified legal or financial professional is advisable to ensure compliance with the latest Papua New Guinean employment and tax regulations.