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

How Employer of Record (EoR) in Mozambique Works

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

Mozambique’s Labor Law requires written employment contracts for all employees with a term exceeding 90 days. These contracts should be signed by both the Employer and employee and address the following provisions:

• Mutual acknowledgement,
• Job description & Responsibilities
• And work Location

Working Hours in Mozambique

The standard working hours mandated by law are 48 hours per week.

Observed National Holidays and Vacation

There are 11 national public holidays in Mozambique, one of which is a holiday that does not have fixed date. The holidays are:

• New Year’s Day – January 1
• Mozambique Heroes’ Day – February 3
• Public Sector Holiday – April 2
• Mozambique’s Women’s Day – Date varies
• Workers’ Day – May 1
• Independence Day – June 25
• Lusaka Peace Agreement Day – September 7
• Armed Forces Day – September 25
• Peace and National Reconciliation Day – October 4
• Maputo Day – November 10
• Family Day / Christmas Day – December 25

Expats, Visas & Work Permits

Candidates who travel to the country for work reasons are eligible for a work visa. Its processing takes ten to fifteen days, and it has a validity of 30 days, which can be extended up to 60 days. The validity of a work permit in Mozambique is four years.  A Mozambique EoR offers this service to help businesses manage their clients.

Paid Leave

• Annual Leave: Employees are entitled to paid annual Leave. The amount varies depending on the year of employment – First year: minimum of 12 days; Second year and beyond: minimum of 30 days
• Sick Leave: Employees can take 15 days of medical Leave consecutively and five days per quarter non-consecutively. Under Mozambique’s social security system, employees are eligible to enjoy these benefits.
• Maternity Leave: Women employees are allowed to take 60 days of paid maternity leave and 30 days of maternity leave per year for personal reasons, such as if a child is admitted to the hospital.
• Paternal Leave: Male employees are generally eligible to take one day of paid paternity leave, which is usually taken right after the baby’s birth.
• Study Leave: Some employers offer paid or unpaid study leave for employees pursuing further education or professional development relevant to their work. This is typically not mandated by law but depends on individual company policy.
• Bereavement Leave: Employees may be eligible for bereavement leave upon the passing of a close family member. Individual employers determine the specifics regarding the duration and terms of bereavement leave, which may vary.

While the 10-day allowance serves as a baseline, companies may exercise discretion in extending the duration of bereavement leave based on the specific circumstances. Should the allocated bereavement leave be exhausted, employees may then utilise their accrued annual leave entitlement to accommodate their need for additional time off to grieve and attend to personal matters.

Statutory Deductions

Personal Income Tax

Mozambique has a progressive personal income tax system. This means the tax rate you pay depends on your total annual income. The range of the tax rates is between 10% to 32% for resident individuals and non-residents with Mozambican-source income. The rate you pay depends on your taxable income bracket.

• (0 MZN – MZN 42,000): 10% 
• (MZN 42,001 – MZN 168,000): 15% 
• (MZN 168,001 – MZN 504,000): 20% 
• (MZN 504,001 – MZN 1,512,000): 25% 
• (Above MZN 1,512,001): 32% 

Corporate Income Tax (CIT)

Resident and non-resident entities with a permanent establishment (PE) in Mozambique are subject to CIT on taxable profits. The tax rate for these entities is 32%.

Social Security Deductions

The National Institute of Social Security (INSS) manages a mandatory social security system in Mozambique.

Employers

Contribute an amount equal to 4% of the monthly declared earnings of their employees.

Employees

Contribute 3% of their monthly declared earnings.

Health Insurance

In Mozambique, employee health benefits encompass a state-funded universal healthcare system. However, employers often need more quality healthcare provisions to acquire private medical insurance.

Additional Compensation and Benefits

The overtime compensation rate depends on the time the overtime hours are worked:

• 150% of the average hourly rate for overtime worked until 8:00 PM. 
• 200% of the average hourly rate for overtime worked between 8:00 PM and the start of regular working hours the following day. 
• 200% of the average hourly rate for work performed on Sundays, public holidays, or additional rest days. 

Termination/ Severance in Mozambique

Termination

An employment contract can be terminated for different reasons as outlined in the Mozambican Labor Law:

• Completion of Work
• Employee Death
• Restructuring or Economic Reasons
• Termination for Cause

Notice Period

• Employee: An employee can terminate the employment contract by providing written notice to the Employer. This written notice should specify the intended last day of employment.
• Employer: An employer must give the employee written notice of termination at least 30 days before the last day of employment. In this scenario, the employee is entitled to severance pay according to the Mozambican Labor Law.

Severance Pay

The severance pay is calculated based on a multiple of the national minimum wage in effect at the time of termination. Here are the categories:

• 1-7 times the national minimum wage: Employees in this category receive 30 days of pay per year of service as severance pay.
• 8-10 times the national minimum wage: Employees in this category receive 15 days of pay per year of service as severance pay.
• 11-16 times the national minimum wage: Employees in this category receive ten days of pay per year of service as severance pay.
• More than 16 times the national minimum wage: Employees in this category receive three days of pay per year of service as severance pay.