Lesotho Employer of Record & Payroll
Employee Payroll and Tax compliance starts here
Africa Deployments Lesotho 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 Lesotho 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 Lesotho.
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.
Lesotho is a small 30,000km2 enclave in Africa that lies entirely within the territory of South Africa.
Despite its landlocked status and its highly mountainous terrain, Lesotho hosts some amazing wonders, such as The Sani Mountain Lodge in the Sani Pass which is regarded as Africa’s highest pub [at an elevation of 2,874m!]
Water and diamonds are Lesotho’s biggest treasures and hydro-electric power is abundant.
Lesotho’s population of ±2.3 million is proud of having the “Highest Lowest Point” of any country [at 1400m]. Being the world’s only nation to be completely above an elevation of 1,000m and have more than 80% of the country located above 1,800 meters, Lesotho is called the “Kingdom of the Sky”.
Lesotho Has One Of The Scariest Runways In The World – The Matekane Air Strip which is only 400m long and ends in a precipitous drop of about 1,600 ft.
Paleontologists and archeologists value Lesotho because it is home to one of the largest dinosaur footprints in the world.
What is the main language spoken in Lesotho:
Lesotho has 2 official languages: Sesotho and English.
Sesotho (or Southern Sesotho), a Southern Bantu language, is the national language of Lesotho, and is spoken by most Basotho.
According to UNICEF, English is widely seen as the language of prestige and economic opportunity in Lesotho.
What type of employment contracts can you offer under Employer of Record in Lesotho:
- 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 4 months [maximum] – as set by the Labour Code in Lesotho
- Generally in Lesotho, after the successful completion of the probation period, the employment automatically turns into permanent employment for an indefinite period
WHAT INCOME IS TAXABLE IN Lesotho:
What income is exempt from taxes in Lesotho:
Lesotho law requires that employers operate the pay-as-you-earn (PAYE) system for taxing the normal wages and salaries. For all the benefits, listed in sections 119 to 127 of the Act, provided to the employees, employers have to operate a separate fringe benefit tax (FBT) system or calculations.
Standard working hours: Number Overtime to be paid?
- Standard working hours in Lesotho: 8 hours per day or 48 hours per week.
- Overtime: Any additional hours worked beyond the standard working hours are considered overtime.
Mandatory contributions?
Employee
| Contribution Type | Contribution Rate |
|---|---|
|
National Pension Scheme |
10% |
|
National Health Insurance Fund (NHIF) |
1% |
Employer
| Contribution Type | Contribution Rate |
|---|---|
|
National Pension Scheme |
10% |
|
National Health Insurance Fund (NHIF) |
2% |
|
Workmen’s Compensation Fund |
Variable (depends on industry/risks) |
Social
| Contribution Type | Employers | Employees |
|---|---|---|
|
National Pension Scheme |
10% of employee’s earnings |
10% of employee’s earnings |
|
National Health Insurance Fund (NHIF) |
2% of employee’s earnings |
1% of employee’s earnings |
|
Workmen’s Compensation Fund |
Variable (depends on industry and risks) |
Not applicable (paid solely by employers)
|
What is the Maternity and Paternity policy within Lesotho:
- The general duration of maternity leave is 12 weeks and comprises six weeks before and six weeks after the birth.
- No statutory paternity leave in Lesotho
What type of leave is allowed in Lesotho:
- 21 days, full pay per year
- Sick leave during the first six months of continuous employment with the same employer is unpaid.
Do I need to pay a mandatory bonus annually OR is it discretionary in Lesotho:
In Lesotho there is no statutory requirement to pay a 13th or 14th month salary, and there is little evidence that bonuses are customary.
What Gratuity / Severance payments do you need to provide for Lesotho:
- Typically paid upon retirement, resignation, or completion of a specific tenure. Amount varies based on length of service and employment contract terms.
- Linked to employee’s length of service. Employees with over a year of service entitled to two weeks’ wages as severance pay, capped at a certain level.
- Severance not payable to employees terminated due to misconduct.
CAN YOU GIVE FRINGE BENEFITS IN Lesotho:
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 Lesotho:
- Maximum probation period set at four months by the labor code.
- Upon completion of probation, employment becomes permanent indefinitely.
Is 13th month pay (Bonus) mandatory?
Not mandatory, applicable as per contract.
What are the Corporate and VAT / Sales tax rates in Lesotho:
Corporate Tax Rates: 25% [in general]
VAT / Sales Tax Rates: 15% [on most goods and services]
Public Holidays in Lesotho:
- January 1 - New Year's Day
- March 11 - Moshoeshoe I's Day
- April 07 - Good Friday
- April 10 - Easter Monday
- May 01 - Worker's Day
- May 18 - Ascension Day
- May 25 - Africa Day
- July 17 - King's Birthday
- October 04 - Independence Day
- December 25 - Christmas Day
What Industries we support in Lesotho:
- 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.
