Libya Employer of Record & Payroll
Africa Deployments Libya 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 Libya 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 Libya.
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.
Libya, officially the State of Libya, is a country in the Maghreb region of North Africa, and although over 90% of Libya is desert or semi-desert, it is blessed with the longest Mediterranean coastline in Africa.
Tripoli, the capital, is a coastal oasis producing olives, vegetables, citrus fruit, tobacco, and grains.
Libya is the fourth-largest country in Africa, and third-richest, thanks to its abundant oil reserves [1st in Africa and the 9th-largest in the world].
Often referred to as an ‘ancient crossroads of civilizations’, Libya was once part of the ancient Greek empire, as well as the Roman Empire and the Ottoman Empire. The UNESCO-listed Rock-Art Sites of Tadrart Acacus prove the existence of humans as far back as 12000 BC.
Libya is home to the Sahara Desert, the world’s largest hot desert.
After Libya became independent, the country split into three regions: Tripolitania, Cyrenaica and Fezza – which are mirrored on the countries’ current flag.
The name “Libya” is derived from the Egyptian term “Libu”, after the Berber people living west of the Nile.
What is the main language spoken in Libya:
The official language of Libya is Arabic.
Most residents speak one of the varieties of Arabic as a first language, most prominently vernacular Libyan Arabic, but also Egyptian Arabic and Tunisian Arabic.
English and Italian are also widely spoken.
What type of employment contracts can you offer in Libya:
Through our employer of record (EOR) solutions in Libya, 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 6 months [standard]
WHAT INCOME IS TAXABLE IN Libya:
- Libyan and foreign nationals are subject to tax on their income from employment in Libya.
- Individuals receive their salary after deductions for social insurance contributions, employee social solidarity fund contributions, and any personal exemptions.
- There is a Jehad Tax assessed on the taxable income of Palestinian nationals.
- Corporate income tax in Libya is set at 20%.
- The specific rates and thresholds for personal income tax are not provided.
- Social security contributions are payable by all individuals working in Libya, including expatriates.
- Social security rates for employees and employers are mentioned as 15% and 11.2% respectively, but it’s unclear if these are the current rates or specific to certain cases.
What income is exempt from taxes in Libya:
Libyan and foreign nationals are only subject to tax on income derived from employment in Libya.
Income tax is levied on employment income paid in cash or in kind.
Standard working hours: Number Overtime to be paid?
In Libya, the maximum limit for overtime is set at 3 hours per day, and it is typically paid at 150% of the standard salary rate.
Mandatory contributions?
Employee
| Contribution Type | Contribution Rate |
|---|---|
|
Social Security |
3.75% |
|
Social Unity Fund |
1% |
|
Income Tax |
5% up to 1,000 LYD, 10% over 1,000 LYD
|
|
Jehad Tax |
1% if monthly income does not exceed 50 LYD, 2% if monthly income does not exceed 100 LYD, 3% on all monthly income above 100 LYD |
Employer
| Contribution Type | Contribution Rate |
|---|---|
|
Social Security |
10.5% |
Social
| Contribution Type | Employers | Employees |
|---|---|---|
|
Social Security |
10.5% |
3.75% |
|
National Health Insurance (CNAM) |
– |
1% |
What is the Maternity and Paternity policy within Libya:
Maternity Leave:
- Female employees are entitled to 14 weeks of maternity leave.
- Six weeks are taken before the predicted due date.
- Eight weeks are taken after the birth.
- In the case of multiple or complicated births, the leave is extended to 16 weeks.
- There are no provisions for paternity leave in Libyan law.
What type of leave is allowed in Libya:
Annual Leave:
- Employees in Libya are generally entitled to 30 working days of annual leave per year.
- For employees aged 59 or above with at least 20 years of continuous employment, the entitlement may increase to 45 working days of paid leave.
- Annual leave allows employees to take time off from work for rest, relaxation, and personal purposes.
- Sick leave entitlement in Libya depends on the employee’s seniority and the continuity of the sickness.
- If an employee is sick for a continuous period, they are usually entitled to 45 days of sick leave per year.
- If the sickness is not continuous, the entitlement can be extended to 60 days of sick leave per year.
Do I need to pay a mandatory bonus annually OR is it discretionary in Libya:
There is no statutory requirement / allocation for a 13th salary / bonus in Libya.
What Gratuity / Severance payments do you need to provide for Libya:
Before employing your employees in Libya, 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 Libya:
Notice period:
- Calculated based on length of service and employment type
- Can be from ±30 days [i.e. usually in Libya]
- Prior written notice required
- 15 days’ salary per year for the first five years of employment and
- 30 days‘ salary thereafter
CAN YOU GIVE FRINGE BENEFITS IN Libya:
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 Libya:
- Mandatory probation period in Libya: 6 months.
Is 13th month pay (Bonus) mandatory?
Not mandatory, applicable as per contract.
What are the Corporate and VAT / Sales tax rates in Libya:
Corporate Tax Rates: 20% [in general]
VAT / Sales Tax Rates: 0% [on most goods and services]
Public Holidays in Libya:
- February 17 - Revolution Day
- April 22 - Eid al-Fitr
- April 23 - Eid al-Fitr
- May 01 - Labour Day
- June 28 - Arafat Day
- June 29 - Eid Al-Adha
- June 30- Eid Al-Adha
- July 01 - Eid Al-Adha
- July 19 - Hijri New Year
- September 16 - Martyrs' Day
- September 27 - Birthday of Prophet Muhammed
- October 23 - Liberation Day
- December 24 - Independence Day
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What Industries we support in Libya:
- 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.
