Employer of Record in Zambia

An Employer of Record (EOR) in Zambia is a company that legally hires employees on your behalf. This means you can build a team in Zambia without setting up a local entity, which can be a complex and expensive process. An EOR, like Rivermate, handles all the legal and HR tasks that come with employment. This includes payroll, taxes, benefits, and compliance with local labor laws. You manage your team's day to day work, while the EOR takes care of the administrative side.

How an Employer of Record (EOR) Works in Zambia

Using an EOR in Zambia simplifies the process of hiring employees. Here is how it typically works:

1. You Find the Talent: You recruit and select the candidate you want to hire in Zambia.
2. The EOR Hires Your Candidate: The EOR's local entity in Zambia legally hires the employee. They become the official employer.
3. Compliant Contracts: The EOR drafts an employment contract that complies with Zambian labor laws. These laws are overseen by the Ministry of Labour and Social Security (https://www.mlss.gov.zm/).
4. Onboarding: The EOR manages the onboarding process, including any necessary registrations with local authorities.
5. Payroll and Taxes: The EOR processes monthly payroll in Zambian Kwacha. They also handle all tax deductions, like Pay As You Earn (PAYE), and remit them to the Zambia Revenue Authority (https://www.zra.org.zm/).
6. Social Security: The EOR manages contributions to the National Pension Scheme Authority (NAPSA).
7. You Manage the Work: You direct your employee's daily tasks and responsibilities, just like any other member of your team.

Why use an Employer of Record in Zambia

Using an EOR in Zambia offers a straightforward way to grow your team in the country. It allows you to enter the market quickly and legally, without the major investment of setting up a local company.

Here are some key benefits:

• Speed: You can hire employees and start operations much faster than if you were to establish your own legal entity.
• Compliance: EORs are experts in Zambian labor law. They ensure you meet all legal requirements for employment, reducing your risk of fines or legal issues.
• Cost Savings: Setting up and maintaining a company in another country is expensive. An EOR helps you avoid these significant costs.
• Focus on Your Business: With the EOR handling HR and legal administration, you can focus on your core business goals and managing your team.
• Flexibility: An EOR allows you to hire one or many employees, giving you the flexibility to scale your team as needed.

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

Hiring in Zambia offers a chance to tap into a growing economy with a diverse talent pool. Key sectors like mining, agriculture, finance, and construction are driving demand for skilled professionals. However, successfully hiring in Zambia means understanding the local employment laws to ensure you are compliant. The Employment Code Act is the main legislation that governs employment, so it's important to be familiar with its requirements.

Employment contracts & must-have clauses

When you hire an employee in Zambia, a written contract is required for any employment relationship that is for six months or longer. It is highly recommended to have a written contract for all employees to ensure clarity.

Your employment contracts must include the following clauses:

• Names of you and your employee
• Date the employment begins
• Job title and description of duties
• Place of work
• Working hours
• Salary and how it will be paid
• Leave entitlements (annual, sick, etc.)
• Notice period for termination

Probation periods

In Zambia, you can include a probationary period in an employment contract to assess a new employee's suitability for the role.

• The initial probation period can be up to three months.
• You can extend this for another three months, but the total probation cannot exceed six months.
• During probation, either you or the employee can terminate the contract with 24 hours' notice.
• You must inform the employee in writing whether they have passed their probation before it ends.
• If you don't provide written confirmation or termination, the employee is automatically confirmed in their role.

Working hours & overtime

Standard working hours in Zambia are eight hours per day, with a maximum of 48 hours per week.

Public & regional holidays

Your employees in Zambia are entitled to paid leave on public holidays. Here are the public holidays for 2024:

• January 1: New Year's Day
• March 8: International Women's Day
• March 12: Youth Day
• March 29: Good Friday
• March 30: Holy Saturday
• April 1: Easter Monday
• April 28: Kenneth Kaunda Birthday
• May 1: Labour Day
• May 25: Africa Day
• July (First Monday): Heroes' Day
• July (Tuesday after Heroes' Day): Unity Day
• August (First Monday): Farmers' Day
• October 18: National Prayer Day
• October 24: Independence Day
• December 25: Christmas Day

Hiring contractors in Zambia

Hiring independent contractors in Zambia can give you flexibility and access to specialized skills without the long-term commitment of hiring an employee. Contractors manage their own work and are responsible for their own taxes.

However, you need to be careful about how you classify workers. If a contractor is treated like an employee (for example, you control their work hours and methods), they could be misclassified. Misclassification can lead to legal and financial penalties.

An Employer of Record (EOR) can help you mitigate this risk. An EOR can hire and pay contractors on your behalf, ensuring that they are classified correctly according to Zambian law. This allows you to work with the talent you need without worrying about compliance issues.

Understanding compensation and payroll in Zambia is key to successfully employing workers in the country. You need a clear grasp of the local labor laws to ensure you pay your team accurately and on time. This involves more than just transferring a monthly salary. You must correctly calculate and withhold taxes and social security contributions. Getting this right keeps you compliant with Zambian law and builds trust with your employees.

Payroll cycles & wage structure

In Zambia, the standard payroll cycle is monthly. You will typically pay your employees at the end of each month. Direct bank transfers are the most common payment method.

A typical compensation package in Zambia includes a basic salary plus any allowances. Common allowances include:

• Housing allowance: To help with accommodation costs.
• Transport allowance: To cover commuting expenses.
• Meal allowance: To contribute to daily food costs.

Overtime & minimums

The standard workweek in Zambia is 48 hours. If your employees work beyond these hours, you must pay them overtime. Overtime is generally calculated at one and a half times the employee's normal hourly rate. For work done on a public holiday or a Sunday (if it's not a normal workday for the employee), the rate is double the normal hourly pay.

Zambia has a statutory minimum wage, which varies by the category of the employee. For example, as of the latest regulations, the minimum monthly wages for some categories are:

• Domestic Workers: ZMW 1,300
• Shop Workers: ZMW 1,600
• General Workers: ZMW 1,600

Employer taxes and contributions

As an employer in Zambia, you are responsible for several payroll taxes and contributions. These are your direct responsibilities and are calculated on top of your employee's gross salary.

Employee taxes and deductions

You must also deduct certain taxes and contributions directly from your employees' salaries. You are responsible for withholding these amounts and remitting them to the correct government authorities.

In Zambia, providing competitive benefits and understanding leave policies is key to attracting and keeping great talent. It's not just about staying compliant with the law. It's about building a supportive work environment. When you take care of your team, they can do their best work. This guide breaks down what you need to know about leave and benefits in Zambia.

Statutory leave

Zambian law outlines several types of mandatory leave for employees.

• Annual Leave: You are entitled to 24 paid vacation days a year after 12 months of continuous service. This leave accrues at a rate of two days per month.
• Sick Leave: If you have worked for at least 12 months, you can get up to six months of paid sick leave. The first three months are at full pay, and the next three are at half pay. For shorter contracts, you can get up to 52 days of sick leave. You will need a medical certificate to qualify.
• Maternity Leave: Female employees get 14 weeks of paid maternity leave. To be eligible, you usually need to have worked for your employer for at least two years.
• Family Responsibility Leave: You can take up to seven days of partially paid leave each year to care for a sick child, spouse, or dependent. This is available after you have been with your employer for six months.

Public holidays & regional holidays

Employees are entitled to a paid day off for public holidays. If a holiday falls on a weekend, the following Monday is usually observed as the holiday.

Typical supplemental benefits

Beyond the legal requirements, many employers offer additional benefits to stay competitive.

How an EOR can help with setting up benefits

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

An EOR handles the legal and administrative side of employment. This includes making sure your benefits packages are compliant with Zambian law. They manage payroll, social security contributions, and all required leave policies. This frees you up to focus on growing your business and supporting your team. An EOR helps you offer competitive benefits without the headache of navigating local regulations yourself.

When you end an employment relationship in Zambia, you need to follow a clear process. It's not just about saying goodbye. You must handle termination and offboarding correctly to stay compliant with local labor laws. This involves providing a valid reason for termination, giving the proper notice, and paying any final dues. Failing to follow these steps can lead to legal issues.

Notice periods

You must give employees proper notice before their contract ends, unless they are guilty of misconduct. You can also pay them in lieu of this notice. The minimum notice period required by law depends on the length of the employment contract:

• 24 hours for a contract of one month or less.
• 14 days for a contract between one and three months.
• 30 days for a contract longer than three months.

If your employment contract specifies a longer notice period, you must adhere to that. For any contract lasting more than six months, the termination notice must be in writing.

Severance pay

Zambian law requires severance pay in certain situations, like redundancy. The amount is often determined by the employment agreement or through negotiation. When ending a contract due to redundancy, you must give at least 30 days' notice to the employee or their representative. This notice should state the number of employees affected and the timeframe for the terminations.

How Rivermate handles compliant exits

We make sure every step of the offboarding process is handled correctly and legally. We understand that navigating Zambian labor law can be complex.

Here’s how we manage the process for you:

• Documentation: We ensure all termination notices are in writing and clearly state the valid reason for the separation.
• Fair Process: For terminations related to performance or misconduct, we follow a fair procedure. This includes conducting an investigation and giving the employee a chance to respond.
• Final Payments: We calculate and process all final payments. This includes outstanding salary, accrued leave, and any required severance pay.
• Compliance Check: Our team stays up-to-date on Zambian labor laws to ensure every termination is fully compliant, protecting you from potential legal claims.

Navigating visas and work permits in Zambia is a key step to expanding your team in the country. Zambia's system distinguishes between a visa, which allows entry, and a permit, which authorizes work. For foreign nationals to work in Zambia, they need the correct work authorization. The two main types of work permits are short-term, for up to six months, and long-term, for up to two years. It's important to apply for the right permit from the start, as you cannot change from one type to another after arriving in Zambia.

Employment visas & sponsorship realities

An Employer of Record (EOR) can sponsor work permits for foreign employees in Zambia. This is a common route for companies that don't have a registered legal entity in the country. The EOR acts as the legal employer and handles all formal employment responsibilities, including work permit and visa sponsorship.

Here are some practical routes and realities of sponsorship:

• Employer of Record Sponsorship: An EOR can sponsor both short-term and long-term employment permits. They must have a registered entity in Zambia to do so.
• Employer's Role: The sponsoring employer, whether it's your company or an EOR, plays a crucial role in the application process. They must provide company documentation and justify the need to hire a foreign national.
• Labor Market Test: For a long-term Employment Permit, the employer must often demonstrate that they have tried to find a suitable Zambian candidate first.
• Permit Specificity: Work permits in Zambia are tied to a specific employer and role. If an employee changes their job or employer, they will need a new permit application.

Business travel compliance

For short-term business visits, Zambia has specific rules to follow. These visits can include activities like attending meetings, conferences, or negotiations.

Here’s a breakdown of what you need to know:

• Visa-Free Entry: Citizens of some countries can enter Zambia for business for up to 30 days without a visa.
• Business Visa: If you are not from a visa-exempt country, you will need to apply for a business visa. You can often do this online through an e-visa system.
• Permissible Activities: Business travel is for short-term activities. It does not permit employment.
• Staying Longer: If a business visitor needs to stay longer than 30 days, they must apply for a temporary employment permit.

Here is a table summarizing the different types of entries for business: