Malawi Employer of Record & Payroll

Africa Deployments Malawi 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 Malawi 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 Malawi. 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. In addition to our services, we can offer you the employee in Malawi , Medical, Disability, Life, and Workmen’s Compensation Insurances. Malawi is a landlocked country in southeastern Africa occupying a narrow, curving strip of land along the East African Rift Valley. ‘Malawi’ means ‘fire flames’, named after the reflection of the rising sun on the waters of the vast Lake Malawi, which covers more than one fifth of the land. Malawi is home to ±20 million people and is known as “The Warm Heart of Africa” due to their kind and hospitable nature. The serene Lake Malawi was crowned “The Lake of Stars” by Scottish explorer David Livingstone, after the lantern lights which reflected off fishermen’s boats and sparkled on the lake’s surface as if they were the stars at night. Lake Malawi contains the largest number of fish species of any lake in the world. The economy is fueled by agriculture, producing crops such as tobacco, tea, cotton, sugar, coffee, peanuts and wooden products, and ±85% of Malawians live in rural areas. Malawi has two UNESCO World Heritage sites – Lake Malawi National Park, and the Chongoni Rock Art Area [127 sites that feature the richest collection of rock art in Central Africa].

Population

19.89 million (2021)

Currency

Malawian Kwacha

Capital

Lilongwe

Language

English

GDP

12.63 billion USD (2021)

Industries

Agriculture & Manufacturing

What is the main language spoken in Malawi:

English is the official language of Malawi, but overall it is a multilingual country.

Other major languages spoken in Malawi include: Chewa, Yao, Tonga, Sena, and Elomwe.

What type of employment contracts can you offer in Malawi:

Through our employer of record (EOR) solutions in Malawi, we can offer the following types of employment contracts:

Fixed Term
Indefinite term

Contracts and Offer Letters must:

Be in writing
Be in the official local language and the local currency
Include salary/compensation, benefits and termination requirements

Full-time Employees:

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 – 6 months [standard] or 12 months [exceptional circumstance only]

WHAT INCOME IS TAXABLE IN Malawi:

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 Malawi:

Fringe Benefits Tax (FBT) is tax charged on the total taxable value of fringe benefits as enjoyed by an employee but paid for by an employer. The employer, and not the employee, pays FBT. FBT is charged at 30 percent of the taxable value.

Standard working hours: Number Overtime to be paid?

The statutory working hours in Malawi are 48 hours per week. Any work performed beyond the standard working hours is considered overtime and is subject to additional compensation. Overtime in Malawi is calculated at a rate of 150% of the normal pay for hours worked beyond the statutory working hours. In addition, if an employee works over public holidays or weekends, the overtime pay rate increases to 200% of the normal pay.

Mandatory contributions?

Employee

Contribution Type	Contribution Rate
National Pension Scheme	5%

Employer

Contribution Type	Contribution Rate
National Pension Scheme	10%

Social

Contribution Type	Employers	Employees
National Pension Scheme	5%	5%
National Health Insurance	1%	1%
Workers Compensation Fund	1%	–

What is the Maternity and Paternity policy within Malawi:

Maternal leave:

In most cases:
- Paid at 100% for employees [usually part employer part insurance]
8 weeks [minimum]
Applicable every 3 years only
Extendable under medical necessity as long as a medical certificate is provided

Paternal leave:

There is no statutory paternity leave in Malawi

What type of leave is allowed in Malawi:

Annual Leave:

The minimum duration of annual leave is 14 consecutive days per year.
The leave can be increased based on the length of service or specific company policies.

Sick Leave:

The duration and conditions for sick leave may vary depending on the employment contract or company policies.
Employers may require medical documentation to support the need for sick leave.

Bereavement Leave:

Employees may be granted bereavement leave in the event of the death of a close family member.
The duration and conditions for bereavement leave can vary among employers.

Do I need to pay a mandatory bonus annually OR is it discretionary in Malawi:

There is no statutory requirement to pay a 13^th / 14^th salary / bonus in Malawi but they tend to be more common in more senior roles.

What Gratuity / Severance payments do you need to provide for Malawi:

Before employing your employees in Malawi, 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 Malawi:

Notice period:

Calculated based on length of service and employment type
Can be from ±1 month minimum
Prior written notice required

Severance [economic reasons]:

Less than 1 year – no severance
1 year to 5 years [inclusive] – 2 weeks’ pay per each year of employment
6 years to 10 years [inclusive] – 3 weeks’ pay per each year of employment
11 years onwards [inclusive] – 4 weeks’ pay per each year of employment

CAN YOU GIVE FRINGE BENEFITS IN Malawi:

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 Malawi:

Malawi does not have a specific mandatory probation period set by law.
The probation period is typically determined by the employer and stated in the employment contract.
The length of the probation period can vary, usually ranging from three to six months.

Is 13th month pay (Bonus) mandatory?

Not mandatory, applicable as per contract.

What are the Corporate and VAT / Sales tax rates in Malawi:

Corporate Tax Rates: 30% [in general]

VAT / Sales Tax Rates: 16.5% [on most goods and services]

Public Holidays in Malawi:

January 1 - New Year's Day
January 15 - John Chilembwe Day
January 16 - John Chilembwe Day
March 03 - Martyrs Day
April 07 - Good Friday
April 10 - Easter Monday
April 22 - Eid Ul-Fitr
May 01 - Labour Day
May 15 - Kamuzu Day
July 06 - Independence Day
October 15 - Mother's Day
December 25 - Christmas Day
December 26 - Boxing Day

What Industries we support in Malawi:

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.