An Employer of Record (EOR) is a third-party organization that takes on the legal and administrative responsibilities of employing workers in a foreign country. This service allows companies to hire employees in Zambia without establishing a local legal entity. The EOR handles crucial tasks such as payroll, taxes, benefits administration, and ensuring compliance with local labor laws.
Hiring workers from Zambia offers several benefits to international companies. Zambia is a landlocked country in southern Africa with a population of approximately 20.2 million people. The country’s official language is English, facilitating easier communication for international businesses. Zambia’s workforce is known for its growing talent pool, particularly in mining, agriculture, and services.
While specific recent workforce statistics for Zambia are limited, the country has been experiencing steady economic growth, which has led to increased employment opportunities. The government has been implementing policies to promote skills development and entrepreneurship, creating a more diverse talent pool for employers to tap into.
Here are the 6 steps to using an EOR in Zambia:
- Find talent to hire in Zambia
- Compare using an EOR to setting up a legal entity in Zambia
- Get the information needed from your talent
- Choose an EOR provider with expertise in Zambia
- Communicate your hiring needs to the EOR
- Have the EOR set up the contracts and hiring procedure
1. Find talent to hire in Zambia
Employers can leverage various platforms and strategies to find talent to hire in Zambia. The country’s growing workforce and English proficiency make it an attractive destination for international talent-seeking companies.
Online job boards are becoming increasingly popular in Zambia. Job seekers and employers alike widely use platforms like Glopin Jobs and ZambiaJobsOnline.com. LinkedIn is also gaining traction, especially for professional and managerial positions.
Recruitment agencies can be particularly helpful for companies unfamiliar with the local job market. Agencies like Prosoft Zambia and Drake Zambia have extensive networks and local expertise.
Networking events and job fairs in major cities like Lusaka and Kitwe offer opportunities to connect with potential employees. Universities such as the University of Zambia and Copperbelt University often host career fairs, providing access to fresh graduates.
2. Compare using an EOR to setting up a legal entity in Zambia
When working with employees in Zambia, you need to consider working with an EOR to set up your own legal entity. Each option has advantages and considerations, depending on your company’s goals and resources.
| Factor | Employer of Record | Setting Up Legal Entity |
|---|---|---|
| Setup Time | Quick, often within days | Several months |
| Initial Cost | Lower upfront costs | Higher initial investment |
| Ongoing Cost | Per-employee fees | Variable, potentially lower long-term |
| Complexity | Low, managed by EOR | High, requires local expertise |
| Control over Operations | Limited | Full control |
| Compliance Management | Handled by EOR | Company responsibility |
| Scalability | Flexible, easy to scale | Less flexible, tied to entity |
| Local Expertise Required | Minimal | Significant |
| Suitable for | Short-term, small-scale operations | Long-term, large-scale presence |
| Risk | Lower, shared with EOR | Higher, full company liability |
Using an EOR in Zambia offers a faster and more flexible solution for companies looking to hire a few employees or test the market. It significantly reduces the complexity of navigating Zambian labor laws and tax regulations.
On the other hand, setting up a legal entity in Zambia provides greater control over operations. For companies planning a significant, long-term presence in the country, it may be more cost-effective in the long run.
3. Get the information needed from your talent
To hire employees in Zambia, you need some information about them to ensure compliance with local labor laws and tax regulations. This process is crucial for both the employer and the employee, as it forms the basis of the employment relationship.
Typically, you’ll need to collect the following information:
- Full name and contact details
- National Registration Card (NRC) number
- Tax Payer Identification Number (TPIN)
- Educational qualifications and work experience
- Bank account details for salary payments
It’s also important to obtain copies of relevant certificates and qualifications. You’ll need to verify the status of foreign workers’ work permits.
Remember to comply with Zambian data protection laws when collecting and storing this personal information.
4. Choose an EOR provider with expertise in Zambia
When choosing an EOR provider to work with in Zambia, selecting a partner with deep expertise in the country’s employment laws, tax regulations, and business culture is crucial. This expertise can significantly impact the success of your operations and ensure full compliance with local requirements.
Look for an EOR provider with a strong track record in Zambia, experience in your industry, and the ability to provide references or case studies. Consider the services offered, including payroll processing, tax withholding and reporting, and benefits administration.
The EOR provider should demonstrate a thorough understanding of Zambian labor laws, including regulations on working hours, leave entitlements, and termination procedures. They should also be well-versed in the country’s tax system and social security requirements.
What are the best EOR providers to use in Zambia?
| It offers a skilled workforce, a cost-effective business environment, and localization features for hiring in Zambia. | Why It’s a Good Fit for Zambia |
|---|---|
| Deel | Offers compliance with Zambian laws, quick onboarding, automated tax document collection, and provides localized benefits. |
| Remote | Known for excellent customer service and understanding of Zambian labor laws |
| Multiplier | Provides efficient hiring processes and compliance management suitable for the Zambian market. |
| Remofirst | Offers a skilled workforce, cost-effective business environment, and localization features for hiring in Zambia. |
| Papaya Global | Offers robust EOR and payroll management with strong local compliance support. |
| Atlas HXM | It offers a skilled workforce, a cost-effective business environment, and localization features for hiring in Zambia. |
5. Communicate your hiring needs to the EOR
It is important to communicate your hiring needs to the EOR to ensure a smooth and effective hiring process in Zambia. This step is crucial as it sets the foundation for a successful employment relationship and helps the EOR accurately represent your company’s interests.
Provide a detailed job description, including the role’s responsibilities, required qualifications, and any specific skills needed. Clearly outline the proposed salary and benefits package, keeping Zambia’s minimum wage requirements and standard benefits practices in mind.
Specify the desired start date, working hours, and any flexibility in work arrangements. Discuss your company culture and how the new hire will fit into your existing team structure. Be clear about any particular compliance concerns or industry-specific requirements that may apply to your operations in Zambia.
6. Have the EOR set up the contracts and hiring procedure
Once you have chosen which provider to work with and communicated your hiring needs, the EOR will set up the contracts and manage the hiring procedure according to Zambian labor laws and regulations.
The EOR will draft an employment contract that complies with Zambian law, including job description, compensation, working hours, leave entitlements, and termination procedures. They will ensure that the contract is in English and states all compensation amounts in Zambian Kwacha.
The EOR will also handle the registration process with relevant Zambian authorities, including the Zambia Revenue Authority for tax purposes and the National Pension Scheme Authority for social security contributions.
Throughout this process, the EOR acts as the legal employer, taking on the associated risks and responsibilities while allowing you to manage the employee’s work daily.
What help does an EOR provide in Zambia’s payroll, taxes, and benefits administration?
The EOR will support Zambia’s payroll, tax, and benefits administration, ensuring full compliance with local regulations and timely execution of all required processes. This comprehensive service is crucial for navigating the complexities of the Zambian employment system.
Regarding payroll, the EOR calculates and disburses salaries in Zambian Kwacha. They manage the Pay As You Earn (PAYE) system, which is Zambia’s method for collecting income tax from employment. The EOR ensures these payments are correctly calculated and distributed.
For taxes, the EOR handles income tax withholding and remittance to the Zambia Revenue Authority. They calculate the correct tax based on the employee’s earnings and personal circumstances, applying the progressive tax rates set by the Zambian government.
Regarding social security contributions, the EOR manages employee and employer contributions to the National Pension Scheme Authority (NAPSA). The latest information includes a 5% contribution for social security and a 1% contribution for health insurance.
The EOR also administers mandatory benefits as stipulated by Zambian labor law. This includes managing annual leave entitlements (24 days per year), public holidays (20 days per year), and sick leave. They ensure compliance with Zambia’s regulations on working hours, overtime, and rest periods.
What labor laws do you need to consider when hiring in Zambia?
When hiring in Zambia, a few key labor laws must be considered. Zambia’s labor laws generally protect employee rights, ensure fair treatment, and provide significant benefits to workers. These laws are primarily governed by the Employment Code Act No. 3 of 2019, which provides a comprehensive framework for employment relationships in the country.
Employment contracts
Employment contracts in Zambia can be oral or written, but it is strongly recommended that they be written. The contract should clearly state the terms of employment, including job description, compensation, working hours, and termination conditions.
Working hours and paid holidays
The standard workweek in Zambia is 40 hours, typically over five days. Employees are entitled to 24 days of paid annual leave and 20 national public holidays. Overtime work should be compensated at a higher rate, as specified in the employment contract or collective agreements.
Taxes
Employers are responsible for deducting and remitting income tax (PAYE) from employees’ salaries. The Zambia Revenue Authority sets the progressive tax rates.
Severance pay
Severance pay is mandatory in Zambia at the end of a contract. It should be at least 25% of the basic salary earned during employment.
Maternity and paternity leave
Pregnant employees are entitled to 14 weeks of maternity leave, at least 6 weeks taken after the birth. Fathers are entitled to at least 5 days of paternity leave within 7 days of the child’s birth.
Sick leave
Employees are entitled to paid sick leave, the duration of which depends on the length of the employment contract. The pay during sick leave ranges from 50% to 100% of the regular salary, depending on the amount of leave taken.
| Labor Law | Key Points |
|---|---|
| Employment Contracts | Can be oral or written, but written is recommended |
| Working Hours | 40 hours per week standard |
| Paid Leave | 24 days annual leave plus 20 public holidays |
| Severance Pay | Minimum 25% of basic salary earned |
| Maternity Leave | 14 weeks, 6 weeks post-birth mandatory |
| Sick Leave | Paid, duration depends on contract length |
How does the hiring process work in Zambia?
Employers typically follow a structured process that adheres to local labor laws and customs when hiring staff in Zambia. The process usually begins with identifying the vacancy and creating a job description that outlines the role’s responsibilities, qualifications, and requirements.
Once the job is advertised through various channels, such as online job boards, recruitment agencies, or company websites, applications are reviewed, and suitable candidates are shortlisted for interviews. The interview process may involve multiple rounds, including initial screenings, technical assessments, and final interviews with senior management.
After selecting the preferred candidate, the employer extends a job offer, which typically includes details about the position, salary, benefits, and other terms of employment. Upon acceptance, the employer proceeds with the formal hiring process, which involves drafting and signing an employment contract.
The contract should comply with Zambian labor laws, clearly state the terms of employment in English, and specify all compensation amounts in Zambian Kwacha. The employer must also register the new employee with relevant authorities, including the Zambia Revenue Authority for tax purposes and the National Pension Scheme Authority for social security contributions.
The onboarding process typically involves introducing the new employee to company policies, procedures, and culture. It’s also common to have a probationary period, during which both the employer and employee can assess the suitability of the arrangement.
Is Zambia a relatively easy country to hire employees remotely through an EOR?
Zambia is generally considered a relatively straightforward country for hiring employees remotely through an Employer of Record (EOR). The country’s use of English as the official language, relatively stable political environment, and growing economy contribute to a favorable environment for international business operations.
Pros
Cons
In conclusion, while there are some complexities to navigate, particularly around tax regulations and certain sector-specific skills shortages, using an EOR service can significantly simplify the hiring process in Zambia. The country’s numerous advantages, including its English-speaking workforce and growing economy, make it an attractive option for companies looking to expand their operations in Africa.
