Workforce Africa simplifies hiring, payroll, talent management as well as your compliance needs for employees and independent contractors in Lesotho. 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 Lesotho, will help you focus on growth for greater levels of success.

How Employer of Record (EoR) in Lesotho Works

Workforce Africa makes it hassle free to hire and manage your remote staff in Lesotho 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 >>

Employment Contracts in Lesotho

• Identification of Parties: Clearly identify the employer and employee, including their full names and addresses.
• Job Title, Duties & Responsibilities: A detailed outline of the employee’s role and responsibilities.
• Remuneration and Benefits: Details of the employee’s salary, payment method, frequency, and any additional benefits.
• Working Hours and Leave: Standard working hours, overtime pay regulations and leave entitlements.

Termination Clause: Procedures for termination, including notice periods and conditions for fair dismissal.

Working Hours in Lesotho

• Maximum Workweek: 45 hours.
• Five-Day Workweek: Daily working hours are capped at 9 hours.
• Six-Day Workweek: Daily working hours are 8 hours for the first five days and 5 hours on the sixth day.
• A worker contracted on a part-time basis shall not work less than 5 hours in a day and not work less than 40 hours in a week or less than 160 hours in a month.
• Overtime Limits and Pay Rates
  • General Limit: Overtime work is limited to a maximum of 11 hours per week.
  • Compensation: Overtime is paid at a rate of at least 125% of the regular wage.

Observed National Holidays and Vacation

These national holidays are celebrated in Lesotho:

• New Year’s Day: January 1
• Moshoeshoe’s Day: March 11
• Good Friday: Date varies (March/April)
• Easter Monday: Date varies (March/April)
• Workers’ Day: May 1
• Ascension Day: Date varies (May)
• Africa Day: May 25
• King’s Birthday: July 17
• Independence Day: October 4
• Christmas Day: December 25
• Boxing Day: December 26

Expats, Visas & Work Permits

To lawfully enter Lesotho, an expatriate must first obtain an entry visa, typically issued for a short duration, permitting them to work in the country. Upon arrival, both the expatriate and their employer are required to apply for a work permit, with the employer generally responsible for initiating and sponsoring the application. Employers who engage individuals, or individuals who accept employment, in violation of these requirements commit an offence and, upon conviction, are subject to a fine of up to Five Thousand Maloti, imprisonment for up to six months, or both. A Lesotho EoR offers this service to help businesses manage their clients.

Paid Leaves

• Annual Leave: Employees are entitled to a minimum of 12 working days of paid annual leave per year.
• Sick Leave: After six months of employment, employees are entitled to 12 days of fully paid sick leave and up to 24 days of half-paid sick leave within a 12-month period.
• Maternity Leave: Female employees are entitled to 14 weeks of maternity leave; however, the leave is unpaid. Employers are not legally obligated to provide wages during this period.
• Paternity Leave: New fathers are entitled to 14 working days of paternity leave. For adoption, parents are granted 14 days of bonding leave starting from the day the adopted child arrives in the family home.
• Bereavement Leave: Employees are entitled to 5 working days of bereavement leave for the death of an immediate family member.

Statutory Deductions in Lesotho

• Tax Brackets and Rates
  • 20%: This rate applies to annual taxable income up to LSL 70,500 (approximately LSL 5,875 per month).
  • 30%: This rate applies to any annual taxable income exceeding LSL 70,500.
  • Additionally, there is a non-refundable personal tax credit of LSL 11,040 per annum (LSL 920 per month), which is deductible from the total tax liability.
• Corporate Tax
  • Standard Rate: 25% for most companies.
  • Mining Companies: 30%.
• Value-Added Tax (VAT)
  • Standard Rate: 15%.
  • Reduced Rate: 9% for certain essential goods.
• Social Security Contributions: In Lesotho, social security contributions are mandatory for both employers and employees. Here are the key details:
  • National Pension Scheme
    • Employer Contribution: 10% of the employee’s earnings.
    • Employee Contribution: 10% of their earnings.
  • National Health Insurance Fund (NHIF)
    • Employer Contribution: 2% of the employee’s earnings.
    • Employee Contribution: 1% of their earnings.

Health Insurance

• National Health Insurance (NHI) Scheme: This government initiative provides basic healthcare coverage to all citizens, offering subsidized services and treatments. While still under development, with efforts to expand coverage and enhance service quality, private health insurance is available for employees seeking additional or more comprehensive care.
• Corporate Health Plans: Many companies offer health insurance as part of employee benefits, which can include additional services such as dental and optical care, as well as wellness programs.

Additional Compensation and Benefits

• Public Holidays: Employees are entitled to paid leave on all official national holidays.
• Social Security Contributions: Both employers and employees contribute to the National Pension Scheme and the National Health Insurance Fund (NHIF).
• Employers often provide additional benefits to attract and retain top talent:
  • Health Insurance: Some employers offer group health insurance plans that cover employees and sometimes their dependents.
  • Extended Paid Time Off: Additional paid time off for vacation, sick leave, and personal days.
  • Allowances: Housing, transport, and meal allowances to help offset living costs.

Termination/ Severance in Lesotho

• Probation
  • Duration: The maximum probationary period is four months.
  • Termination During Probation: Either party can terminate the employment with one week’s notice during the probation period.
• Termination
  • Grounds for Dismissal: Employers can dismiss employees for valid reasons such as poor performance, misconduct, or operational requirements.
  • Summary Dismissal: Immediate termination without notice is allowed for serious misconduct.
  • Mutual Agreement: Employment can also be terminated by mutual agreement between the employer and employee.
• Notice Period
  • Less than 6 months of service: 7 days’ notice.
  • More than 6 months but less than1 year of service: 14 days’ notice.
  • 1 year of service or more: 1 months’ notice.
• Severance Pay
  • Eligibility: Employees are entitled to severance pay if they have completed more than one year of continuous service with the same employer.
  • Calculation: Severance pay is calculated as two weeks’ wages for each year of service. The two weeks’ wages shall be at the rate payable at the time the services are terminated.
  • Exclusions: Severance pay is not applicable if the employee is dismissed for serious misconduct.