Mozambique Employer of Record & Payroll
Africa Deployments Mozambique offers our clients Employer of Record (EOR) services covering all of the regions within. We offer full-time employment or fixed terms contracts based on your requirements in Mozambique for locals or expatriates. ADS will take care of the work permit under our umbrella and will issue local work contracts to your contractors. We will also advise our client’s on best Human Resource (HR) practices when setting up the employee’s locally in Mozambique.
ADS takes care of the local tax & PAYE remittances to the Revenue Services on a monthly basis ensuring that they are fully compliant with the law. We will also ensure that their salaries are paid on time monthly and issue them with their pay slips.
Mozambique, officially the Republic of Mozambique, is a sovereign state located in southeastern Africa with a long warm Indian Ocean coastline to the east, where it is also separated from the Comoros, Mayotte and Madagascar by the Mozambique Channel.
Mozambique has abundant world-class seafood, sincere hospitality, and an expanding tourism sector. It is known for popular beaches like Tofo, offshore marine parks, and the mangrove-covered Ibo Island located in the Quirimbas Archipelago, a 250km stretch of coral islands.
The capital and largest city is Maputo, home to 1.2 million of the overall population of ±33 million. Mozambique is the only country in the world which sports a firearm on their flag.
The tropical climate endows Mozambique with rich and extensive natural resources; the country’s economy being based chiefly on fishery, agriculture, chemical manufacturing, aluminium and oil.
South Africa remains Mozambique’s main trading partner, preserving a close relationship with Portugal, with a perspective on other European markets.
What is the main language spoken in Mozambique:
Portuguese is Mozambique’s official language, spoken by ±50% of the population.
The other most spoken primary languages in Mozambique include: Makhuwa, Changana, Nyanja, Ndau, Sena, Chwabo, and Tswa.
Most Mozambicans are fluent in more than a single language.
What type of employment contracts can you offer in Mozambique:
Through our employer of record (EOR) solutions in Mozambique, we can offer the following types of employment contracts:
- Fixed Term
- Indefinite term
- Be in writing
- Be in the official local language and the local currency
- Include salary/compensation, benefits and termination requirements
- Have specific working terms and conditions
- Can be eligible for organizational perks and/or other benefits
- Tend to be more focused [as only one employer] and familiar with the specific business – due to e.g. ongoing company training etc.
- Probationary period is 3 months [standard] to 6 months [maximum – and usually applicable for senior roles]
WHAT INCOME IS TAXABLE IN Mozambique:
Any income earned in the form of cash, wages, salary, overtime, leave pay or payment in lieu of leave, commissions, gratuity, bonus, or any amount that has benefited the employee. All income will be taxed in accordance with the law and the final payroll issued monthly.
What income is exempt from taxes in Mozambique:
In general, all economic advantages provided to the employee arising from the employment or equivalent relationship are considered remuneration and taxed as employment income under the PIT Code.
Standard working hours: Number Overtime to be paid?
The standard working hours are 48 hours per week. When it comes to overtime, here are some key points:
Overtime Eligibility:
- Every employee is eligible for overtime, except for those in regulatory or supervisory positions or those with specific exemptions.
Overtime Compensation:
- Employees who work beyond the standard working hours are entitled to receive additional compensation for overtime.
- The specific rate of overtime pay should be determined based on the employment agreement or relevant labor laws in Mozambique.
Exemptions from Overtime:
- Certain responsibilities or positions may qualify for exemptions from overtime compensation.
- Employees carrying out duties that justify exemptions may not be entitled to receive overtime pay.
Mandatory contributions?
Social Security
| Contribution Type | Employer's Contribution | Employee's Contribution |
|---|---|---|
|
Social Security |
4% of monthly salary |
3% of monthly salary |
Other Taxes
| Contribution Type | Employers |
|---|---|
|
Value-Added Tax (VAT) |
Standard rate: 16% |
|
Inheritance and Gift Taxes |
Rates varying from 2% to 10% |
|
Property Transfer Taxes |
2% of selling price of the building (10% for some cases) |
|
Excise Duties |
Specific details not provided |
|
Stamp Duties and Service Charges |
Varying rates based on transaction or fixed amounts |
What is the Maternity and Paternity policy within Mozambique:
Maternal leave:
- leave be at least 60 days of which a period of six weeks compulsory leave should be after childbirth.
Paternal leave:
- Immediately after delivery or miscarriage entitled to 1 working days leave from work.
What type of leave is allowed in Mozambique:
Annual leave
- 7 days, full pay for four months of continued service that can be used during the calendar year.
- Employees are generally eligible for up to 15 days of sick leave, or 5 non-consecutive days per quarter. If the employee needs more time s/he must go to the health board. Social security will pay for 365 days of continuous sick leave for a non-occupational illness or accident.
Do I need to pay a mandatory bonus annually OR is it discretionary in Mozambique:
There seems to be a statutory 13th month salary / bonus for the public service sector – but not for the private sector.
What Gratuity / Severance payments do you need to provide for Mozambique:
Before employing your employees in Mozambique, it is always advisable to understand your risk from an employment perspective. Unfortunately, nothing is guaranteed and in the event that you need to terminate for a valid reason, we always suggest that you know what you are in for in the unlikely event you need to terminate.
Below are the types are terminations in Mozambique:
Notice period:
- Calculated based on length of service and employment type
- Generally from ±30 days / 1 month
- Prior written notice required
- Employees generally entitled to severance that is calculated based on multiples of the Mozambique national minimum wage as follows:
- Employees whose wages are:
- 1-7 times the national minimum wage: 30 days’ pay per year of service
- 8-10 times the national minimum wage: 15 days’ pay per year of service
- 11-16 time the national minimum wage: 10 days’ pay per year of service
- 16+ times the national minimum wage: 3 days’ pay per year of service
CAN YOU GIVE FRINGE BENEFITS IN Mozambique:
Yes you can but keep in mind that Fringe Benefits will be subject to employee PAYE tax. Only benefits that cannot be converted to cash will not be subject to tax. If the employer covers some of the employees expenses i.e. mobile phone then it must be subject to PAYE tax and either the employer will cover this portion for the employee or the employee will bear the PAYE tax.
Mandatory Probation period of Mozambique:
General Employees:
- Probation period: 90 days
- Probation period: 180 days
Is 13th month pay (Bonus) mandatory?
The 13th-month pay (bonus) is mandatory in Mozambique and is calculated as one month’s salary paid annually to employees.
What are the Corporate and VAT / Sales tax rates in Mozambique:
Corporate Tax Rates: 32% [in general]
VAT / Sales Tax Rates: 16% [on most goods and services]
Public Holidays in Mozambique:
- January 1 - New Year's Day
- February 03 - Heroes' Day Holiday
- April 07 - Women's Day
- May 01 - Worker's Day
- June 25 - Independence Day
- September 07 - Victory Day
- September 25 - Revolution Day
- October 04 - Day of Peace and Reconciliation
- December 25 - Family Day
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What Industries we support in Mozambique:
- Non-Governmental Organization’s (NGO) / Non- profit
- Engineering & Construction
- Government / Development Agencies
- Oil & Gas
- FMCG & Manufacturing
- Private Equality, Finance, Insurance & Banking
- Mining
- Agriculture
The information provided above is for an “informative decision” and may change at any given time without prior notice. We always suggest speaking to one of our Sales Consultants before engaging in country.
