How to Hire Remote Employees In 

Zambia

The Basics

Currency
Zambian kwacha (ZMK)
Employer Taxes
35%
Payroll Frequency
Monthly
Official Language
Bemba/English

Employment in 

Zambia

Hire Independent Contractors

Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.

For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.

For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.

As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.

While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.

Benefits of Hiring Independent Contractors
Reduced overhead: Lower cost in expenses, payroll, benefits, and more.
Greater flexibility: Contractors can be brought on as-needed. If not a good fit, you simply don’t have to move forward with the contract.
Reduced legal risk: Contractors aren’t usually protected by employment anti-discrimination and workplace safety laws.
Disadvantages of Hiring Independent Contractors
Risk of Misclassification: Not only does this deny workers their proper protections, it can also result in steep penalties and damage to your company. If the IRS determines that employee misclassification has occurred, you will be liable for a percentage of the employees wages, FICA contributions, penalty fines, unpaid taxes, up to a year in prison, and more.
Lack of Control: Contractors are drawn to being independent because it gives them greater control over the work they perform and who they work with. Because they’re not employees, you can’t tell them what to work on and how it should be done.
Lack of Loyalty: Contractors come and go as-needed. Many companies hire contractors for short-term work, which makes it difficult to cultivate loyalty.
Increased Scrutiny: Using Independent Contractors typically leads to an increased risk of being audited.

Set up a subsidiary in 

Zambia

A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.

Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Zambia can be expensive, stressful, and time-consuming. It's not for the faint of heart.

To set up a subsidiary in Zambia, you have to:

  1. Register your business name and file articles of incorporation
  2. File for local bank accounts
  3. Learn and keep track of the local employment laws
  4. Set up local payroll
  5. Hire local accounting, legal, and HR people

If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Zambia.

Use an Employer-of-Record (EOR)

An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.

An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.

Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.

At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.

Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:

  • Ability to attract talented and motivated employees from all over the world.
  • Full legal compliance: There is no risk of violating local employment laws.
  • Transparency: Employees are still your employees. All the work, processes, operations and day-to-day business belong to you, the company, just like with any other employee. Panther just takes on all of the responsibilities, obligations and admin work related to your team's employment.
  • No risk of misclassification

Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.

Paying Remote Employees

Paying employees in Zambia is not the same as paying workers in your own country. Employees have to be paid using Zambia’s employment and payroll standards.

This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.

Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.

After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:

Pay through a local entity

One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.

Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.

Work with an EOR

Outside of EORs acting as the full admin employer, many also provide remote payroll.

For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.

We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.

Zambia

 Specific Information

Working Hours

The standard workweek is 8 hours per day and these should not be more than 48 hours per week.

By including the lunch and prayer time in hours of work, working hours should not be greater than 9 hours a day.

Overtime

Work that is performed in excess of 48 hours a week is to be paid overtime at one and-a-half times the worker’s hourly rate of pay.

Work performed on paid public holidays or on a Sunday(where Sunday is not part of the normal working week) should be paid at double the worker’s hourly rate of pay.

Time off may be substituted for overtime pay.

Payroll Tax

Employer

Employer

  • Social Security
  • National Health Insurance

Minimum Wage

There is no national minimum wage applicable in Zambia.

Payroll

Pay Cycle

Employees in Zambia receive their salary in a monthly basis

13th Salary

There is no provision in the law.

Leave

Paid Time Off (PTO)

All employees, except temporary or casual employees, contracted to work for 12 months or more are entitled to annual paid leave calculated at a rate of two days per month or 24 days per year.

Public Holidays

There are 14 public holidays.

Sick Days

The duration of sick leave entitlement is based on the following:

  • In order to avail fully paid leave, the worker must provide a valid medical certificate.
  • The length of paid sick leave depends on the type of employment contract.
  • An employee on the short-term contract is paid full pay for the first 26 working days of the sick leave and thereafter, half pay (50%) for the next 26 working days of the sick leave.
  • An employee on the long-term contract is paid full pay during the first three months of the sick leave and thereafter, half pay for the next three months of the sick leave.
  • Long term contracts are all such contracts with duration in excess of 12 months.
  • If an employee does not recover from illness after six months from the date of accident/illness, employer may discharge such an employee on the recommendation of a registered medical doctor.

Maternity Leave

In Zambia, under the Employment Code Act, under the provisions of section 41, if the female employee with at least two years of continuous service is entitled for 14 weeks' maternity leave with full pay.

Paternity Leave

Fathers who have one year of continuous service with their employers are entitled to 5 days of paternity leave, to be taken within 7 days of the birth of the child.

Parental Leave

There is no provision in the law on paid or unpaid parental leave.

Other Leave

Family Responsibility Leave - Employees with at least six months of service are entitled to seven working days of paid leave.

Marriage Leave

Employees are entitled to seven days of leave.

Bereavement Leave

Employees are entitled to 12 days of paid compassionate leave for the death of a spouse, child, parent or dependent.

Termination

Termination Process

A worker who is re-hired by the same employer for the same job within two years from the contract termination date is not required to go through probation again, provided that the termination was not performance-related.

The employee is also entitled:

  • Termination of the employment contract of a fixed duration - at least 25% of the employee’s basic pay.
  • Termination of employment due to redundancy - 2 months’ basic pay for each completed year of service.
  • Employee’s death - 2 months’ basic pay for each completed year of service.
  • Termination on medical grounds: at least three months’ basic pay for each completed year of service.

Notice Period

The notice period in Zambia is:

  • 14 days of employment of more than one month but not exceeding three months;
  • 30 days for a contract of employment of more than three months, except that notice to terminate a contract of employment of more than six months shall be in writing; and
  • Twenty-four hours for a contract of employment for less than 30 days.

Severance Pay

Severance is not payable to employees working under a fixed-term contract or so-called long-term contract (defined as a contract for service exceeding 12 months, renewable for a further term or for a specific task/project with a predefined end date).

Instead, they are entitled to an end-of-service lump sum gratuity equal to 25% of the employee’s base pay over the term of the agreement.

Probation Period

Provisions were created for probationary employment of up to three months, which may be extended one time.