Employer of Record Services in Zambia

Minimum wage

Zambia has no minimum wage; however, it applies to “protected” workers like security guards, clerks, domestic and shop workers, receptionists, cleaners, and drivers.

Working hours

The standard working hours in Zambia are 40 a week, with a set overwork maximum of 48 and 60 for security guards. The overtime pay rate is 1.5 times the employee’s hourly wage.

When working on a holiday or a scheduled rest day (typically a Sunday), overtime pay is twice the employee’s hourly pay rate.

Work Breaks

Employees have a weekly rest day of 24 hours, a one-hour lunch break every working day, and a 20-minute health break each day.

Annual Paid Leave

So long as an employee isn’t casual or temporary, Zambia entitles them to 24 days payable leave in a year. However, the employee must have worked a consecutive 12 months to qualify for this leave.

Medical and Family Leave

Employees are entitled to three days of paid leave per year plus a 7-day payable family responsibility leave to cater for their spaces, children, and dependents in education, health, and care.

Sick Leave

Short-term and long-term contract employees can take unpaid sick leave in Zambia. Nonetheless, after six months, the employer can terminate the contract depending on the doctor’s recommendation and the employer’s decision.

A short-term employee is entitled to sick leave and full payment for her 26 days, followed by half payment for the next 26 days, while a long-term employee gets full pay sick leave for the first three months of their holiday and a half wages for the next three months.

Compassionate leave

In Zambia, employees are entitled to 12 days of paid compassionate leave under justifiable grounds such as the death of a spouse, child, parent, or dependent.

Maternity and Paternity Leave

Senegal gives a 12-week paid maternity leave to women who have worked for at least two years consecutively. Also, male employees are entitled to a 5-day paternity leave but must have worked for at least 12 months.

However, for a male employee to secure a paternity leave, one of the following should be true:

• The employee is the birth father.
• The employee has submitted to the employee’s employer a birth record of the child.
• The leave is taken within seven days of the birth of a child.

Public Holidays in Zambia

Zambia has 14 national holidays, as in the table below.

Generally, Zambia uses a progressive tax system, meaning employees will pay taxes based on their earnings. Also, corporate income tax varies from one industry to the other. The tax year, often known as the charge year, is scheduled from April 1st to March 31st of every year. Let’s have a look at the various taxation in Zambia.

Individual Income Tax

This kind of tax applies to employees in Zambia and is structured in the Pay As You Earn (PAYE) model for indefinite contracts. The maximum tax rate applicable in individual income tax is 37.5%.

Value Added Tax(VAT)

The VAT rate is 16% and applies to deliveries of goods and services with standard VAT rates.

Corporate Tax

Zambia’s corporate tax is at 35% and different for different organizations as follows:

• 15% for the agricultural sector and non-traditional exports
• 33% for companies listed on the Lusaka Stock exchanges
• Banks are levied corporate tax at the rate of 40%

Custom Duties

Zambia has three categories of custom duty

• 25% mainly for finished products
• 15% intermediate goods
• 0 – 5% raw materials and capital goods

Zambia’s Employment Code Act of 2019 features a maximum probation period of three or six months in specific conditions to assess the worker’s suitability for employment. Besides, the contract is terminable by both parties after a 24-hour notice is given.

However, if the worker is rehired by the same employer for the same position within two years after the termination, a probation period isn’t necessary again.

Notice Period

As per Zambia’s employment code, the employee must give notice before terminating a contract. The principle implies the following notice periods:

• Twenty-four hours for a contract that lasts no longer than one month.
• Fourteen days for a contract of more than one month but not exceeding three months.
• Thirty days for a contract exceeding three months.
•  A written notice is required for a contract over six months.

On the other hand, an employer should do the following in case they want to terminate a contract with employees in Zambia:

• Inform the employee of the termination at least 30 days before the termination.
• Hear from the employees’ side whether they plan to minimize the termination.
• Give the Labour Commissioner at least a 60-day notice of the impending redundancy. 

Severance Pay

 The employee is entitled to severance pay in the following cases.

• Termination of the employment contract of a fixed term – at least 25% of the employee’s basic pay.
• Redundancy-related terminations- 2 months’ basic pay for each year of service completed.
• Death of the employee- 2 months’ basic pay for each year of service that has been completed.
• Termination due to illness – at least three months’ basic pay for each year of service that has been completed.