Definitive guide to hiring in Zambia | Global Expansion (2024)

• 1 Hiring in Zambia - EOR Zambia
• 02 Labor Laws in Zambia
• 15 Zambia Salary and Wages
• 05 Income Tax in Zambia
• 06 Social Security in Zambia
• 07 Deductible Expenses in Zambia
• 08 Immigration Zambia
• 09 Value Added Tax (VAT) in Zambia
• 11 Mandatory Benefits in Zambia
• 12 Payroll In Zambia
• 13 Payroll Accrual in Zambia
• 14 Accrued Benefits in Zambia
• 15 Why use Global Expansion to hire in Zambia

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Hiring in Zambia - EOR Zambia

For companies that want to hire employees and run payroll in Zambia without first establishing a business entity or subsidiary, Global Expansion provides Employer of Record services (EOR Zambia).

Our EOR services streamline and simplify the global hiring process. We handle the core global HR tasks - compliance, contracts, payroll, global benefits, and more - so that you forgo hours of ongoing admin, human error, and risky compliance.

In Zambia, companies would historically establish a subsidiary or branch office to legally hire in that country. With Global Expansion this step is no longer necessary. We have subsidiaries all over the world and therefore can legally hire on your behalf. The employees are ours only on paper and report directly to managers within your company.

Labor Laws in Zambia

Employment laws in Zambia are uniquely suited to the country’s way of life, and crucial to understand if you want to employ local talent in this country. Find out more about Zambia's employment laws and regulations here.

Employment Contracts

There are 4 types of employment contracts under the labor laws in Zambia:

1. Permanent employment
   • Employees' contract expires on retirement unless terminated.
2. Long-term employment
   • This contract can last more than 12 months.
   • It is also renewable for an additional term.
3. Task-specific employment
   • This contract ends once the hired worker completes the project or task.
4. Probationary employment
   • Under this contract, the probationary period generally lasts 3 months.
   • The maximum duration is 6 months since extensions for another 3 months sometimes happen.

Employee Probation Period

The 2019 Employment Code Act allows for a 3 month probationary period to evaluate a candidate. The probationary period can be extended from 3 to 6 months. The employer has the option to terminate the contract at any time during this period.

Annual Leave in Zambia

Full-time employees are entitled to at least two days of annual leave/paid holidays per month of employment. The annual leave total includes 24 calendar days.

Holidays in Zambia

Here is the full list of public holidays in Zambia.

Maternity Leave Zambia

The 2019 Employment Code Act of Zambia grants pregnant employees 14 weeks of maternity leave, up from 12 weeks under the Employment Act of 1965. The minimum post-natal leave requirement is 6 weeks. In the event of multiple births, maternity leave can be extended to 18 weeks.

Paternity Leave Zambia

Male employees are entitled to 5 days of paid paternity leave.

Sick Leave in Zambia

The length of paid sick leave depends on the nature of the work contract. A short-term contract employee receives full compensation for the first 26 working days of sick leave, followed by half pay (50%) for the next 26 working days of sick leave.

A long-term contract employee receives full pay for the first 3 months of sick absence and half pay for the next 3 months.

Working Hours in Zambia

A typical workweek is 8 hours per day and no more than 48 hours per week, according to Zambian Labor Law. Working hours should not exceed 9 hours per day, accounting for lunch and prayer time.

Overtime in Zambia

Overtime hours are not legally restricted in Zambia. For overtime work performed outside of the standard workweek, however, a premium of at least 150% of the normal hourly wage rate is paid.

Termination of Employment in Zambia

A contract of employment may be terminated in the manner specified in the contract of employment or in any other manner (as specified in the Employment Code Act), except that if an employer terminates the contract, the employer must provide the employee with reasons for the termination of the employee's contract of employment.

Contract termination is not permitted unless there is a valid reason. Valid reasons include those related to an employee's capacity or conduct, as well as those based on an undertaking's operational requirements. A worker's contract may not be terminated due to poor performance or conduct without first giving the employee an opportunity to be heard.

A contract of employment expires:

• at the end of the term for which it is expressed to be made
• on the death of the employee before the end of the term specified in the contract
• on the employee attaining the applicable retirement age, where the contract of employment is permanent in nature
• or in any other manner in which a contract of employment lawfully expires or is deemed to expire.

Notice Period in Zambia

A worker is entitled to termination notice or payment in lieu of notice, except in cases of gross misconduct. The notice period is generally specified under the employment contract.

If it is not clearly provided under the contract of employment, the minimum duration is:

• 24 hours for a contract of employment not exceeding one month;
• 14 days for a contract of employment ranging between one to three months; and
• 30 days for a contract of employment of more than three months.

The notice to terminate a contract of employment of more than six months shall be in writing.

Severance in Zambia

Severance pay is defined under the Employment Code Act of 2019 as “wages and benefits paid to an employee on contract termination.”

The Act provides for severance pay in the following cases:

• Termination of employment contract of a fixed duration: at least 25% of the employee’s basic pay earned during the contract period;
• Termination of employment due to redundancy: 2 months’ basic pay for each completed year of service;
• Employee’s death in service: 2 months’ basic pay for each completed year of service;
• Medical discharge: at least 3 months’ basic pay for each completed year of service.

Zambia Average Salary

The average monthly wage in Zambia sits between ZMW 5,200 to ZMW 6,000, which is the equivalent of USD 300 to 350 USD.

Zambia Minimum Wage

The minimum wage in Zambia should cover all basic living expenses for a full-time worker. The extra allowances include housing, transport and lunch. All of these allowances are specified under different statutory wage orders

Zambia Salary Comparison

• Salaries in Zambia depend on the location and field of work.
• On average, male employees in Zambia earn 12% more than female employees across all sectors.
• On average, employees in Zambia receive a 5% salary increase every 28 months.
• The salary increase rates by experience level are as follows:
  • Junior: 3%–5%
  • Mid: 6%–9%
  • Senior: 10%–15%
• Public sector employees in Zambia typically earn 17% more than their private sector counterparts across industries.

13th / 14th Month Salary in Zambia

There is no legal obligation to pay the 13th or 14th month's salary. According to the Labor Code, an employer must pay an employee gratuity of at least 25% of the base pay at the end of a long-term contract period.

Zambia has a Pay As You Earn (PAYE) system for income from work, which means that income tax is taken out by the employer and sent to the Zambia Revenue Authority. In this instance, taxable income is comprised of profits from business activities, salary, annuities, dividends, interest, royalties, and rental income.

Zambian residents are also taxed on interest and dividends received from sources outside Zambia. Zambia has a source-based income taxation system under the Income Tax Act. Income deemed to be derived from Zambia is generally subject to Zambian income tax

The monthly tax rates for the year 2022 are as follows:

Employers must match employees' National Pension Scheme Authority (NPSA) contributions. Contributions are applicable to both foreign and local employees, with a maximum ceiling of ZMW 1,159.40 (ZMW 2,318.80 total) for the fiscal year 2021.

The National Health Insurance (NHI) Act requires both the employer and the employee to contribute 1% of the employee's basic salary to the NHI Management Authority by the 10th of the month in question.

Personal Deductions

• Alimony payments are not deductible.
• A payment to a public benefit organization that is approved by the Zambian government or owned by the Zambian government is deductible.
• The maximum amount deductible is 15% of taxable income.
• Mortgage interest is not deductible.

Standard Deductions

• The first ZK 4000 are exempt from income tax.
• The aforementioned tax free amount constitutes standard deductions as it lowers an individual’s tax payment obligations.

Business Deductions

• An expense is deductible against taxable emoluments if it is incurred wholly and exclusively for the purpose of that source of income and is not capital in nature.
• This test is difficult to satisfy in practice where an expense is incurred by an employee.
• Capital allowances may be available in limited circ*mstances.

Immigration Zambia

Learn about immigration requirements, visa policies, and work permits in Zambia.

Foreign nationals entering Zambia must have visas unless they are citizens of certain British Commonwealth countries or countries with which Zambia has signed a visa-waiver agreement, according to Zambian immigration law.

Types of Visas

There are two different ways to obtain a Zambian visa: at the Embassy of the Republic of Zambia or online through the eVisa program. The various types of visas are described below.

Visa requirements overview

Learn about the visa policy in Zambia and all the ways to obtain a regular or a work visa for Zambia.

Value Added Tax (VAT) in Zambia

A standard VAT of 16% is levied on standard-rated supplies of goods and services.

Mandatory Benefits in Zambia

It’s important to understand the legal requirements of hiring employees in Zambia (whether it’s remote or in-office) so that your business remains compliant.

As part of Global Expansion’s International PEO and Employer of Record (EOR) solution, we guarantee employees are registered with the appropriate government agency, and that they receive mandatory benefits.

Additionally, all tax deductions associated with the employee are processed at the source, meaning our in-country entity will be responsible for paying all taxes to the authorities on behalf of the new hire.

Mandatory Benefits overview

Payroll In Zambia

Here’s what you need to know to run payroll in Zambia.

Individual taxpayers who earn income that exceeds ZMW 54,000 per annum other than that from employment and subject to PAYE are required to submit a provisional tax return. Income tax is determined by reference to the charge year, being the period of 12 months ending on December 31st.

The quarterly returns for the 2022 tax charge year are due as follows:

• The first quarter return is due on March 31, 2022.
• The second quarter return is due on June 30, 2022.
• The third quarter return is due on September 30, 2022.
• The fourth quarter return is due on December 31, 2022.

The personal income tax return must be filed by June 21st following the end of the fiscal year. For example, the personal income tax return for the fiscal year 2021 must be submitted by June 21, 2022. The same deadline applies to the payment of any outstanding income tax.

Global Expansion’s EOR and international PEO solution can help you run payroll in Zambia with ease. In just a few clicks, your employees will be onboarded and enrolled into our payroll system. Additionally, we can invoice for clients locally, meaning we can enroll any new hire quickly and efficiently, whether they're an expatriate or a local national.

Country Accruals Additional Information

Both employers and employees are required to make contributions to the National Pension Scheme Authority (NAPSA). The contribution rate is 5% of the employee’s total earnings (a total 10% contribution from both the employer and employee), subject to a limit as prescribed by the authority.

The maximum contribution limit for 2020 is 1,149.60 Zambian Kwacha (ZMW) per employee per month (i.e. a total of ZMW 2,299.20 from both the employer and employee per month).

Why use Global Expansion to hire in Zambia

Establishing a branch office or subsidiary in Zambia can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because Zambian labor laws are complex.

The company also has a responsibility to comply with specific employment practices dictated by Zambian law to maintain its good standing as an equal opportunity employer.

Global Expansion makes it easy for you to expand into Zambia. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.

We enable you to stay in control of everything. Our International Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.