Payroll in Botswana offers employers an appealing mix of simple headline tax rates and exacting filing rules, yet even a small mis-step can trigger penalties. This guide walks you through the laws, calculations and timelines that shape Payroll in Botswana, and shows how Workforce Africa’s local expertise helps businesses stay compliant and keep employees paid on time.
Understanding The Legal Landscape
Botswana’s payroll framework sits on three pillars: the Employment Act, the Income Tax Act and the Vocational Training Act. An employer must register with the Botswana Unified Revenue Service (BURS) for Pay As You Earn within 14 days of hiring staff . Although Payroll in Botswana does not require social security contributions, the law mandates strict payslip detail and timely wage payment, with wage periods agreed in each contract and backed by sections 74 and 80 of the Employment Act .
Botswana PAYE Rates And Income Tax
Resident income tax follows five progressive bands:
- BWP 0–48,000 = 0 per cent
- 48,001–84,000 = 5 per cent
- 84,001–120,000 = 12.5 per cent plus BWP 1,800
- 120,001–156,000 = 18.75 per cent plus BWP 6,300
- Above 156,000 = 25 per cent plus BWP 13,050
Non-residents face the same marginal bands, but tax starts at 5 per cent from the first pula earned. Employers deduct PAYE monthly and pay it to BURS by the 15th of the following month. Referencing the current Botswana PAYE rates in software or spreadsheets is essential for accurate Payroll in Botswana each cycle.
Mandatory Contributions And Botswana Statutory Payroll Deductions
Despite the absence of national insurance, Payroll in Botswana still features compulsory outgoings:
- Skills Development Levy – 0.2 per cent of monthly turnover for most employers, payable together with PAYE. Small firms under BWP 250,000 turnover are exempt .
- Industrial Class and Severance – The Employment Act obliges severance pay of one day per month of service for the first five years, rising thereafter .
- Training Fund withholding – Certain sectors contribute 10 per cent of the levy to the Human Resource Development Fund .
Together these Botswana statutory payroll deductions can add 1 to 2 per cent to total employment cost, so build them into budgets when you forecast Payroll in Botswana.
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Botswana Payroll Compliance Timelines
Missing a BURS deadline attracts 10 per cent interest on the outstanding tax plus penalties. To stay ahead:
- Onboarding – Register new employees on e-TAX within 24 hours of signing their contract.
- Monthly – Submit the combined PAYE and SDL return (Form ITW-7) and pay the liability by the 15th. The same date applies if the 15th falls on a weekend.
- Annual – File the employer return ITW-10 by 31 July and issue ITW-8 certificates to staff. Payroll in Botswana requires certificates whenever an employee leaves mid-year.
Sticking to these touchpoints satisfies Botswana payroll compliance requirements and avoids interest accrual.
Payslips And Record Keeping
Employers must provide an itemised payslip showing basic pay, taxable benefits, PAYE withheld, SDL and net pay. Records must be preserved for at least five years and be available for BURS inspection . Cloud-based systems make it easier, but paper files remain acceptable for small operations.
Working Time, Leave And Net Pay Impact
The standard working week is 48 hours, with overtime capped at 14 hours and paid at 150 per cent of salary . The minimum wage currently sits at BWP 7.34 per hour . Botswana payroll compliance also hinges on correct leave accrual: employees earn at least 15 days of paid annual leave, 14 weeks of maternity leave at full pay and three days of statutory paternity leave . These entitlements influence gross-to-net calculations and must be reflected in Payroll in Botswana.
How Workforce Africa Simplifies Payroll In Botswana
At Workforce Africa we combine on-the-ground expertise with regional payroll technology to deliver compliant, on-time Payroll in Botswana for multinationals and local businesses alike. Our Employer of Record service handles registration, calculation, payslip generation and payment in pula or hard currency, removing the administrative load so HR leaders can focus on growth. If you already run an internal payroll, our advisory team can carry out a health check to confirm Botswana payroll compliance and flag optimisation opportunities.
Practical Steps To Setting Up Payroll In Botswana
- Incorporate or appoint an Employer of Record – companies without a local entity can use Workforce Africa to act as legal employer.
- Register with BURS – complete Form ITA 20 and set up e-TAX access.
- Open a local bank account – Payments to BURS must come from a Botswana bank.
- Choose payroll software – verify it supports Botswana PAYE rates and SDL.
- Gather employee data – full names, national ID, contract, remuneration and benefits.
- Set internal cut-off dates – allow at least five working days before payday for approvals.
- Run parallel checks – reconcile first three months against manual calculations.
Following these steps ensures Payroll in Botswana launches smoothly and stands up to audit.
Common Pitfalls And How To Avoid Them
- Using outdated tax bands – rates changed in April 2025; always refer to BURS updates or our knowledge base.
- Ignoring benefit valuation – housing, cars and school fees are taxable benefits that must be added to gross income .
- Overlooking exit tax certificates – ITW-8s must be issued within 30 days of departure.
- Late SDL payments – levy is due with PAYE, not quarterly.
- Misclassifying contractors – the Employment Act’s broad definition of employee can bring contractors onto Payroll in Botswana if direction and control exist.
Workforce Africa audits these pressure points as standard, safeguarding you from unexpected liabilities.
Final Thoughts
Payroll in Botswana rewards diligence: the top marginal rate is only 25 per cent, yet penalties for non-compliance can quickly outweigh the savings. By mastering Botswana PAYE rates, mapping every statutory charge and filing on time, you create a payroll function that employees trust and regulators respect. Partnering with Workforce Africa gives you that assurance from day one, letting you channel energy into building a competitive team in the region. Contact us today!
