Workforce Africa simplifies hiring, payroll, and talent management, as well as your compliance needs for employees and independent contractors in Libya. No need for a subsidiary or entity setup. From contracts and onboarding to taxes, payroll, and admin tasks, partnering with us — the Employer of Record in Libya — will help you focus on growth for greater levels of success.
How Employer of Record (EoR) in Libya Works
Workforce Africa makes it hassle-free to hire and manage your remote staff in Libya without having to first set up a subsidiary or entity in the country. We handle staff contract management and onboarding, payroll, compliance, taxes, and other administrative matters. With Workforce Africa, you can now focus more on strategic activities and growing your business. These items include >>
1. Employment Contracts in Libya
Employment relationships in Botswana are governed by the Employment Act and associated regulations. Employers must ensure contracts are appropriately structured and compliant with statutory requirements.
A. Contract Types
Employment may be formalised under various types of contracts, including:
- Indefinite contracts (open-ended)
- Fixed-term contracts
- Part-time employment
- Casual or temporary arrangements
B. Key Contractual Elements:
Every employment contract should include essential clauses that clearly define the terms of engagement. These typically cover:
- Job title and description of duties
- Place of work
- Salary, specified in Libyan Dinars (LYD)
- Working hours and leave entitlements
- Confidentiality obligations
- Any agreed non-compete or restrictive covenants
- Notice periods and conditions for termination
- Forum for resolving disputes
2. Working Hours in Libya
A. Standard Working Week
In accordance with labor norms:
- The standard workweek is 48 hours, typically spread across 6 days
- Employees generally work 8 hours per day
- Friday is customarily observed as the weekly day of rest
B. Overtime Compensation
Employees required to work beyond standard hours are entitled to overtime pay as follows:
- 150% of the regular wage for overtime on ordinary working days
- 200% of the regular wage for night shifts, work performed on Fridays, or during public holidays.
Ramadan Adjustments: During the month of Ramadan, Muslim employees are entitled to reduced daily working hours, in recognition of religious observance. Specific reductions are typically determined by the employer in line with national guidelines.
3. Observed National Holidays and Vacation
These national holidays are celebrated in Libya:
- 1 Jan: New Year’s Day
- 17 Feb: Revolution Day
- Eid al-Fitr (Date Varies)
- 1 May: Labour Day
- Eid al-Adha (Date Varies)
- 27 Jun: Islamic New Year*
- 16 Sep: Prophet’s Birthday (Mawlid)*
- 23 Oct: Liberation Day
- 24 Dec: Independence Day
4. Expats, Visas & Work Permits
A. Entry Visa
Most foreign nationals are required to obtain a visa prior to travelling to Libya. In some cases, a visa on arrival may be granted with prior authorisation from immigration authorities.
B. Visa Application Requirements:
- Passport valid for at least 6 months beyond the date of entry
- Completed visa application form
- Recent passport-sized photograph
- Invitation letter from a host or employer in Libya
- Yellow fever vaccination certificate, if arriving from or transiting through a high-risk area
- Security clearance where applicable
Upon arrival, all foreign nationals must register with the Libya Immigration authorities within 7 days.
C. Work Permit / Employment Authorisation
Foreign nationals intending to work in Libya must obtain an employment permit before beginning any work. Employment is not permitted until the work permit has been approved and endorsed in the individual’s passport.
D. Application Process:
- The employer must first advertise the position locally to demonstrate that no suitable citizen candidate is available.
- Following this, the employer submits a comprehensive application to the Labour Office.
E. Required Documentation:
- Completed employment permit application form
- Signed employment contract
- Certified copies of academic and professional credentials
- Valid medical certificate
- Recent police clearance certificate
F. Permit Details:
- The initial employment permit is typically issued for up to 1 year
- Permits are renewable, subject to continued eligibility and compliance
A Libya EoR offers this service to help businesses manage their clients
5. Paid Leaves
- Annual Leave: Statutory annual leave entitlements vary based on length of service and age:
- Less than 5 years of service: 30 days per year
- 5 years or more of service: 40 days per year
- Employees aged 50+ or with 20+ years of service: 45 days per year
- Pay: 100% of the employee’s regular salary during the leave period
- Sick Leave: Employees are entitled to paid sick leave per illness episode, as follows:
- 30 days at full pay (100%)
- An additional 60 days at 75% pay
- The total sick leave benefit is capped at 3 months per calendar year.
- Maternity Leave: Female employees are entitled to 100 days of maternity leave (approximately 14 weeks) with full pay. Upon returning to work, they are also entitled to nursing breaks during working hours. The Social Security Fund (SSF) covers the first 3 months of paid maternity leave.
- Paternity Leave: There is no statutory entitlement to paternity leave. However, many employers grant 3 to 5 days of paid paternity leave based on internal policy or collective agreements.
- Hajj Leave: Employees are allowed to take one unpaid leave of absence during their period of employment to perform the Hajj pilgrimage.
6. Statutory Deductions
A. Social Security Contributions
- Employers are required to contribute 10.5% of each employee’s gross salary if they are registered as a Libyan entity. For foreign branches operating in Libya, the employer contribution rate is slightly higher, at 11.25%. These contributions cover statutory benefits such as accident insurance, sickness, and maternity leave.
- Employees contribute 5.125% of their gross salary, which is withheld from their wages by the employer and remitted directly to the Social Security Fund.
- In addition to the employer and employee contributions, the Libyan government provides an additional 1.025% for employees working under Libyan entities. This treasury-funded amount is used to subsidize family-related benefits and support the pension system.
B. Tax Brackets and Rates
Personal Income Tax (PIT)
| Taxable income (annual, LYD) | Rate |
| 0 – 12 000 | 5% |
| > 12 000 | 10% |
Plus Jehad Tax: 1% (< 50 LYD/mo), 2% (≤ 100 LYD/mo), 3% (> 100 LYD/mo).
C. Corporate Income Tax
- 20% flat CIT on profits, plus (until Feb 2025) 4% Jehad levy; Jehad on corporates repealed for FYs ending after 3 Feb 2025.
- VAT/GST: Libya does not yet apply VAT. Imports attract a 5% service fee.
7. Health Insurance
Libya is rolling out a Comprehensive Health Insurance Project to supplement public hospitals; until fully operational, employers customarily purchase private medical policies for staff (especially expatriates) to ensure access to reliable care.
8. Additional Compensation and Benefits
- Health Care: Citizens have access to public healthcare services, which are free at the point of use, although service quality may vary. For skilled local employees and expatriates, it is common for employers to offer private medical insurance, ensuring access to higher-standard care.
- Social Security Medical Benefits: Employees registered with the Social Security Fund (SSF) are entitled to:
- In-kind medical services at designated facilities.
- Cash sickness and maternity benefits, subject to eligibility and contribution requirements.
- These benefits are funded through mandatory employer and employee contributions to the SSF.
- Workers’ Compensation: Coverage for work-related injuries and occupational diseases is provided through the SSF employment injury scheme, financed by the employer’s contribution. Employees are entitled to medical treatment and compensation in cases of work-related harm.
- Pension Benefits: Employees contributing to the SSF are eligible for old-age pension benefits. The statutory retirement age is:
- 65 years for men
- 60 years for women
- Pensions are provided through the SSF old-age insurance scheme, offering income support upon retirement.
9. Termination/Severance in Libya
A. Permissible Grounds for Termination of Employment
Employment may be lawfully terminated for the following reasons:
- Incapacity due to health or disability
- Unsatisfactory job performance
- Misconduct or disciplinary violations
- Redundancy, restructuring, or economic downturn
- Mutual agreement between employer and employee
Termination on discriminatory grounds, such as gender, religion, or political affiliation, is strictly prohibited.
B. Notice Requirements
For indefinite contracts, either party must provide at least 30 calendar days’ written notice.
For fixed-term contracts, employment ends automatically upon the contract’s expiry, unless an early termination clause is included and invoked.
C. Severance Pay
- Libyan nationals are generally not entitled to statutory severance unless otherwise provided in company policy or collective agreements.
- Expatriate employees, on the other hand, are typically entitled to:
- 15 days’ pay per year for the first 5 years of service
- 30 days’ pay per year for each subsequent year
- Some interpretations suggest a range of 0.5 to 1 month’s salary per year, so it’s essential to consult the employment contract or applicable collective agreement.
- Certificate of Service: Upon request, the employer is required to issue a certificate of service confirming the employee’s role, duration of employment, and reason for departure.
D. Probationary Period
The law permits a probationary period of up to 30 days, unless a longer period is specifically agreed upon in writing by both parties.
D. Termination Process
A valid termination process in Libya must adhere to the following steps:
- Provide written notice stating a lawful reason for termination
- Either serve the statutory notice period or provide payment in lieu of notice
- In cases of economic terminations or redundancies, notify the relevant trade union and the Employment Office at least one month in advance
- Settle all outstanding entitlements by the next regular payday, including:
- Final salary
- Payment for any unused leave
- Social security contributions
- Severance pay (where applicable)
Employees have the right to contest dismissals before the Labour Court, which may order reinstatement or compensation if the termination is deemed unjust.