Employer of Record & Payroll Services in Zambia

Our Employer of Record (EOR) services help businesses expand into Zambia’s emerging market without setting up a local legal entity. We enable you to hire employees in full compliance with Zambian labour laws, manage payroll, and handle end-to-end HR administration.

We have supported organizations across agro-processing, fintech, IT, manufacturing, renewable energy, and logistics, we make market entry into Zambia seamless, compliant, and scalable.

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A Recap of Zambia

Zambia, formerly the Republic of Zambia, has 19.47 million people as of 2021. Its strategic location in South Africa in proximity to large markets such as DRC and South Africa makes it an ideal hub to expand your business. The country’s capital is Lusaka, and the official language is English, with Nyanja (Chewa) and Bemba being the widely spoken languages.

The country’s currency is the Zambian Kwacha (ZMW), with 1 USD equivalent to 18 ZMW in 2023.

Zambia’s Gross Domestic Product (GDP) was 22.15 billion USD in 2021, with a growth rate of 4.6% annually. The growth continues due to the government’s constant efforts to restore the country’s economic stability and, in turn, attract new businesses. Inflation, measured by consumer prices, was 10.83%, while the unemployment rate was 13.03%.

Flexi Personnel EOR & Payroll Services in Zambia- Flexi-Personnel

Recruitment Service

Our EOR service provides hassle-free ways to hire and manage employees in Zambia

Tax Management

We simplify your finances by offering monthly invoices covering all services, including salaries, taxes, fees, and employee expenses. This saves you money on banking fees and reduces your finance team’s time managing finances

Payroll Administration

With us, you’ll have a dedicated account manager who can assist you with any Payroll, HR, or Legal questions. This means you have a single point of contact for all your employment needs

Legal Compliance

We ensure compliance with all relevant regulations by processing all funds payable to employees through payroll and providing you with monthly evidence of taxation paid to competent authorities. This guarantees that your employees are paid legally and correctly

HR Consultancy

Our in-country experts are professionally qualified in Legal and HR services and provide timely electronic pay slips for all employees. This saves you time and resources by eliminating the need for paper pay slips.

Statutory Filings

At Flexi-Personnel, we complete all statutory filings on your behalf, meaning you won’t worry about missing any important deadlines or requirements. This ensures that your business stays compliant with all necessary regulations.

Work Dynamic

Employer of Record (EOR) 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.

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Taxation and Employment Deductions

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.

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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

Types of Income Not Subject to Taxation in Zambia

Ex-Gratia, by favor Payments
Medical Expenses or Medical Discharge
Funeral Expenses
Employment Expenses
Fringe Benefits that cannot be converted into cash
Charitable Contributions

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

Zambia 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.

Maternity and Paternity Leave

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.

Work Dynamic in Zambia

Termination of Employment Contracts in Zambia

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.

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.

Termination of Employment Contracts in Zambia

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 Labor Commissioner at least a 60-day notice of the impending redundancy.

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Why you should use our EOR Services in Zambia – Flexi-Personnel

Faster expansion

Take advantage of our years of experience in Zambia’s business dynamics and thrive faster. We are informed on ways to get you started in new and emerging markets to result in a competitive edge

Reducing legal complexities

Our comprehensive employment solutions will help you streamline your operations by reducing the number of suppliers and legal complexities involved in running your business

Saving time

By working with us, we significantly reduce your processing and back-office time, allowing you can focus on other core business activities while we handle the administrative tasks

Mitigating the risk of non-compliance

We ensure our clients comply with HR, payroll, and Zambia legal requirements, thus reducing business risks

Saving resources

With our cost-effective solutions, you’ll save money compared to a traditional set-up for employees, allowing you to allocate resources to other areas of your business