Employer of Record in Malawi

What an EOR provider does in Malawi

The Malawian labor market is fairly accessible to international companies because the employment framework is simple, and the government encourages foreign investment. However, an employer still needs infrastructure in Malawi to pay wages, taxes, statutory contributions and provide employee rights.

An EOR provider, like Rivermate, not only provides the infrastructure but further simplifies hiring in Malawi by becoming the legal employer and providing local expert support. This HR support is invaluable for hiring locals, foreign nationals and teams in the country.

Malawian labor market: A snapshot

The hiring market
Greatest hiring activity:	Blantyre (Southern Region): Around 43% of job market activity. A major hub for telecommunications, banking, finance and the private sector. Lilongwe (Central Region): Around 37% of job market activity. Hosts a number of government ministries, NGOs, international development agencies and corporate headquarters.
Onboarding timelines:	Locals: 24-48 hours Foreign nationals: 6-8 weeks
In-demand sectors:	Malawi has a large NGO presence, with NGORA reporting 1462 active NGOs in the country. Consultants, project officers and managers and public health officers are just some of the roles that clients use EOR services to hire in Malawi. Hiring demands are also high in the manufacturing, construction, telecoms, ICT and commercial sectors.
Sectors with skills shortages:	Manufacturing, tourism, commercial mining, renewable energy, ICT

The salary market
Statutory employer costs:	Pension: A minimum of 10% of the employee’s monthly pensionable earnings. Life insurance: Policy must cover at least one year’s pensionable salary per employee. TEVET levy: 1% of the previous year’s basic payroll
General Daily minimum wage:	MWK 6,057.70 (effective 1 June 2026)
Personal income tax rates:	2026 rates published by the Malawian Revenue Authority: First K170,000 - Tax Exempt (0%) K170,001 - K1,570,000 - 30% K1,570,001 - K10,000,000 - 35% Above K10,000,000 - 40%

Hiring in Malawi: what it's really like

As a first-time employer in Malawi, you likely have many questions about hiring in the country. We drew on our EOR expertise, legislation and consulted with local experts on the ground to bring you insights into what hiring in Malawi is really like.

Do you need to establish a legal entity to hire in Malawi?

Any employer who wants to hire employees in Malawi compliantly, will need to establish a local legal entity. Setting up an entity can take between 29 and 62 days, but it doesn’t provide the infrastructure you need to process payroll, taxes, mandatory contributions and provide employee rights. If you’re hiring only one worker or a small team, this process may require more upfront investment than you’re willing to make.

If you don’t want to establish a local entity, you can use an EOR provider, like Rivermate. The EOR model is especially suitable for foreign companies that want to test the market, hire a single employee, build a team or convert a contractor into a full-time employee.

→ Find out how Rivermate simplifies international hiring and compliance

What are the most important first steps?

Whether you establish your own entity or partner with an EOR provider, the most important initial elements are taxes and social security. They must be done accurately and remitted on time for employers to stay compliant. Where the EOR is the legal employer, they will handle this.

How important are Malawian-compliant contracts?

Malawian-compliant contracts are very important. They must be properly documented and contain all the required clauses as per the Malawian Employment Act, 2000, Part V, Section 25. According to the Act, a contract shall be in one of the following forms:

• A contract for an unspecified period of time (commonly called an indefinite-term contract).
• A contract for a specified period of time (also called a fixed-term contract).
• A contract for a specific task

When using an EOR provider, you are provided with a checklist that helps you gather the information you need for the Employer of Record (EOR) to draft the employment contract. Once the contract is drafted and signed, onboarding can commence. For local workers, this can take 24-48 hours if all the documentation is provided. Foreign nationals have a different process to follow.

Are probation periods allowed in Malawi?

Malawi’s Employment Act, Section 26, does allow for a probationary period. For skilled workers, a probation period may be agreed by the parties, provided it does not exceed twelve months. Based on local practice, our expert advises that probation periods can be set between three months and twelve months. Should either party want to terminate the contract during probation, they give one week's notice. After probation, both parties usually give one month’s notice.

How much does it cost to hire in Malawi?

Understanding the total cost of employment requires a financial simulation based on the employee’s proposed salary package. This shows a foreign employer what the hire will cost each month and over the lifespan of the employment relationship.

The table below shows the types of costs that could be included in a salary package. Not every worker in Malawi will receive variable compensation. It will depend on the industry, occupation and seniority level.

Optional benefits are at the discretion of an employer, but statutory contributions are different because they are mandated by the Malawian labor law.

Future financial obligations may arise during or at the end of an employment relationship, rather than monthly, but an employer is required to make these payments where the Employment Act mandates them.

Fixed salary	Variable compensation	Statutory obligations	Optional benefits	Future financial obligations
Base salary	Overtime Commission Annual performance bonus Profit sharing payments Differential or danger pay One-time cash bonuses Remote work allowances	Pension contribution Life insurance Worker’s compensation	Private healthcare Housing, transportation, utilities, communication and education allowances Year-end bonus	Notice payments Severance payments Accumulated leave payouts Pro-rata payments

Statutory obligations

Pension contribution: 10% of monthly pensionable salary towards Malawi’s pension system.

Life insurance: In addition to the pension contribution, an employer must maintain a life insurance policy for each employee. The level of cover is one times the employee’s annual pensionable emoluments.

Worker’s compensation: As provided for by the Worker’s Compensation Act, 2000. A new Worker’s Compensation Bill is currently in the process of being approved, but the bill has not been enacted as of October 2026.

Employment cost calculator

Statutory employee rights

Workers in Malawi are given strong protections under the Malawi Employment Act. While these employee rights don’t always have a direct impact on the monthly payroll cost, they can affect future cash flow, e.g., when an employee resigns and you need to pay out accrued annual leave or an employee works significant overtime.

Statutory benefits	Description
Working hours	Employment Act, Chapter 55:01, Part VI, 36:
48 hours a week, excluding overtime Maximum daily working hours are 8 for an employee who works six days a week and 12 hours a day for an employee who works five days a week.
Section 38 of the Act provides for exemptions to these regulations.
Public holidays	Officially, 12 main public holidays.
Overtime	Overtime is subject to limitations set out by sections 36 and 37 of the Employment Act.
Three classes of overtime exist, namely: Ordinary overtime, day-off overtime and holiday overtime.
An employee is entitled to compensation as prescribed by Section 39 of the Act, (3),(4) and (5), and Section 40 which deals with payment for working on a public holiday.
Annual leave	Employment Act, Chapter 55:01, Part VI, 44 & 45: Six-day work-week: Not less than 18 days Five-day work-week: Not less than 15 days
Sick leave	Employment Act, Chapter 55:01, Part VI, 46: After completing 12 months continuous service, an employee is entitled to at least four weeks sick leave on full pay, and eight weeks sick leave on half pay during each year. The employee shall be paid the normal rate of wages.
Paid maternity leave	Employment Act, Chapter 55:01, Part VI, 47: At least 8 weeks' maternity leave on full pay, within every three years. The employee is entitled to normal benefits and entitlements during this time. Maternity leave will not be considered an interruption or break in employment. Section 48 of the Act deals with the employee’s right to return to work after the confinement and Section 49, the termination of a contract during maternity leave.
Paid paternity leave	Employment Act Amendment, 2021, Section 47(A): A male employee shall be entitled, once every three years, to at least two weeks' paternity leave on full pay. During this time his benefits and entitlements will continue and his employment will not be considered interrupted.

Hiring foreign nationals in Malawi: what employers need to know

Hiring foreign nationals in Malawi follows a different process to local hiring because a work permit is required. The immigration process doesn’t necessarily make it harder to employ a worker, it just takes longer. In the experience of local HR experts, it usually takes between 6 and 8 weeks after the work permit application has been sent.

Expat employment contracts

The basic particulars of an expat employment contract follow the same format as prescribed in Section 27 of Malawi’s Employment Act, 2000. However, they will likely be modified to accommodate immigration and relocation terms. When partnering with an EOR, the local HR expert will work closely with you regarding any amendments to ensure the contract remains compliant with Malawian labor laws.

Work permit

After the employment contract has been finalized, the work permit application can be submitted. In Malawi, a Temporary Employment Permit (TEP) can be used to gain entry into Malawi and takes two weeks to be approved. Applicants for a new TEP must wait outside of Malawi until the application has been approved. A TEP is initially for six months and can be extended for another six months. An application to extend the TEP must be submitted 3 months before the expiry of the permit.

Once the employee is in Malawi, the Employment Permit (EP) is applied for, which takes 6-8 weeks to be approved. An EP has a duration of two years and the permit is renewable for a successive period of 2 years subject to post type and limitations.

Handling contract terminations compliantly in Malawi

Justification for termination

In the event that an employer terminates a contract, there must be a valid reason to do so, connected to employee capacity or conduct, or operational requirements of the business. It is considered good practice to follow a structured process for terminations and document it.

When termination is connected with the employee’s capacity or conduct, the employee is entitled to an opportunity to defend themselves against the allegations, unless the employer cannot reasonably be expected to provide the opportunity.

Practically, performance-based terminations require documented evidence of the employee’s KPI’s, their progress against those KPIs and any Performance Improvement Plans (PIP). If these are available, it’s easier for an employer to explain the reasons for the termination, to the employee, if the decision is challenged.

Notice periods

In Malawi, an unspecified-period contract can be terminated by either the employer or the employee at any time. According to Section 29 of the Employment Act, 2000, a notice period must be given as follows:

Contract payment frequency	Length of service (continuous employment)	Notice period
Monthly rate	Unspecified	One month’s notice
Fortnightly rate	Less than five years service For at least five years	Fortnight
One month
Weekly rate	Less than two years service For a period of not less than two years but not exceeding five years For at least five years	One week Fortnight One month
Daily or hourly rate	For less than six months For less than six months but not exceeding two years For a period of not less than two years but less than five years For a period of at least five years	One day One week Fortnight One month

For contracts of specified duration, the minimum period of notice will be fourteen calendar days.
An employer can elect to pay an employee in lieu of notice. But according to the Employment Act, Section 30, the employee must receive:

‘...a sum equal to the remuneration that would have been received and confer on the employee all other benefits due to the employee up to the expiration of the required period of notice.’

Severance allowance

Where a contract is terminated by the employer and the employee bears no fault, such as in redundancy or retrenchment, severance pay is due. As per the First Schedule of the Malawi Employment Act, 2000, severance is paid as follows:

Length of service	Severance allowance
Not less than one year, but not exceeding five years	Two weeks’ wages for each completed year of service up to and including the fifth year.
Exceeding five years, but not exceeding ten years	Two weeks’ wages for each completed year of service for the first five years, plus three weeks’ wages for each completed year of service from the sixth year up to and including the tenth year.
Exceeding ten years	Two weeks’ wages for each completed year of service for the first five years, plus three weeks’ wages for each completed year of service from the sixth year up to and including the tenth year, plus four weeks’ wages for each completed year of service from the eleventh year onwards.

How Rivermate can help you hire compliantly in Malawi

By this point, it’s clear that Malawi isn’t a particularly difficult market in which to hire workers but after you’ve found the right candidate, you still have to legally employ them. This requires you to navigate through local labor laws, payroll, taxes, mandatory benefits and immigration regulations. All of this must be done without a compliance mistake, and that’s where we can be an invaluable partner in the region. Our local experts know how to apply Malawi’s Employment Act practically and we have robust infrastructure to support you every step of the way.

Ready to hire in Malawi?

Rivermate handles the complexities so you can hire with confidence in Malawi.

Talk to a Malawian Hiring Expert

Sources:

Employment Act – MalawiLII
Employment (Amendment) Act
Employment (Normal Employment Hours Exemption) Order, 2025 – MalawiLII
https://www.labour.gov.mw/images/documents/Malawi-Pension-Act_2023.pdf
Workers’ Compensation Act – MalawiLII
https://www.mra.mw/newsexpanded/government-proposes-new-tax-measures
Public Notice - NEW TAX MEASURES FOR MID-YEAR BUDGET REVIEW
2026 Malawi Investment Climate Statement
Permits – Department of Immigration. Republic of Malaw