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BOTSWANA
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Botswana Payroll and Employment of Record: Employment Contracts
Visas:
- Tourist Visa: intended solely for vacation or tourism purposes. Valid for 3 months.
- Visitor Visa: issued for social visits or medical reasons. Valid for 3 months.
- Business Visa: granted to traders and investors looking to explore business opportunities in Botswana. Valid for 3 months.
Work Permit:
Under the Employment of Non-Citizens Act, Botswana offers a single work visa, also known as a work permit, for all foreign employees working in the country. Employers are prohibited from hiring individuals without a valid Botswana work permit or a certificate of exemption. The Immigration Board will review all permits and determine their validity period.
PAID TIME OFF
Annual Vacation
- A full-time employee’s yearly paid leave entitlement is 15 working days after one year of employment.
Sick
- Employees are normally entitled to 20 days of paid sick leave per year, with the need that a doctor’s certificate be provided.
Maternity
- Female employees are normally entitled to 12 weeks of maternity leave, six weeks before and six weeks after the delivery. A doctor’s certificate must be shown by the employee. Employees are eligible for at least half of their base wage.
Paternity
There is no statutory paternity leave.
Family
- Male and female employees who have been with the company for more than four months and work at least four days a week are entitled to three days of paid leave per year for family responsibilities.
- This leave can be used if the employee’s child is born or becomes ill (until the child reaches the age of 18).
- The leave can also be taken in the event of a family member’s death (spouse or life partner, parent, adoptive parent, grandparent, child and adopted child, grandchild or sibling).
National Holidays
- Botswana has a total of 8 public holidays which are paid.
Other Paid Time Off
N/A
STATUTORY EMPLOYEE BENEFITS
Unemployment
- Unemployment benefits are not provided. There is however the Ipelegeng – Unemployment Relief. This program provides work for a maximum of one calendar month. After the month is out, interested people may reapply to be re-enlisted in the program. There are no fees involved, however the individual must be over the age of 18 and be classified as an unemployed citizen.
- Employees are usually entitled to a severance payment if they have served 60 months of continuous employment at one company.
Workers Compensation
- This provides compensation for injuries sustained or occupational diseases contracted in the course of employment, or for death as a result of such injuries or diseases, as well as for things incidental to and related with the aforementioned.
- The employer bears the total cost.
Social Security
- There is no national social security insurance yet in Botswana but the one aspect of social security that is in place is the retirement fund which is voluntary.
Retirement
- Employer and employee contributions are used to fund pension programs. Contribution levels, on the other hand, are not regulated. The average employee and employer contribution rate is 5% and 15%, respectively.
- Individuals may make extra voluntary contributions (1-10%) to the fund, but their tax deductibility is limited to the allowed tax limitations set forth in the Income Tax Act.
- The fund is administered by The Botswana Public Officers Pension Fund (BPOPF).
Health
- Botswana provides free healthcare to all of its residents. Some health treatments in the public sector may be charged a little cost, but sexual reproductive health and antiretroviral medication are provided for free.
PRIVATE EMPLOYEE BENEFITS
Workers Compensation
- Private workers compensation is available in Botswana.
Retirement
- Private retirement schemes available.
Health
- Private healthcare is available in Botswana.
Insurance
- Private life insurance is available with the options of long or short term insurance.
PERSONAL INCOME TAX
Tax Year
- Tax year runs from 1st July to 30th June.
Tax Tables
- Resident individuals
| Taxable income (BWP) | Tax on column 1 (BWP) | Tax on excess (%) | |
| Over | Not over | ||
| 0 | 48,000 | 0 | 0 |
| 48,000 | 84,000 | 0 | 5 |
| 84,000 | 120,000 | 1,800 | 12.5 |
| 120,000 | 156,000 | 6,300 | 18.75 |
| 156,000 | 13,050 | 25 | |
- Non-resident individuals
| Taxable income (BWP) | Tax on column 1 (BWP) | Tax on excess (%) | |
| Over | Not over | ||
| 0 | 84,000 | – | 5 |
| 84,000 | 120,000 | 4,200 | 12.5 |
| 120,000 | 156,000 | 8,700 | 18.75 |
| 156,000 | 15,450 | 25 | |
Taxation Method
- Tax is calculated on an annual basis but applied to each monthly payroll.
- The Botswana tax system is territorial, and income is taxed in Botswana if it is generated within the country. Income from services provided outside Botswana is considered to be from a Botswana source if it involves employment in the country.
Double Taxation
- Botswana has multiple double taxation agreements.
Residence Requirements
- The requirement for residency in Botswana is simple. For a tax year, an individual must have a permanent place of residence and be fully present in Botswana for at least 183 days during that tax year or the preceding tax year.
Payroll Calendars
- Employees are not required to be paid on a set schedule.
- Payrolls can be done weekly, biweekly, fortnightly, or monthly.
Rebates & Tax Credits
- A tax credit is provided unilaterally if sums received by a Botswana resident have been taxed in a foreign nation and where a double taxation agreement (DTA) has been signed. A tax credit is also given if the income was earned in Botswana and was subject to WHT. The relief is restricted to the lesser of the tax paid through deduction and the tax ordinarily paid on such income in Botswana.
- In Botswana, there are no additional substantial tax breaks/credits for individuals.
Health Insurance
- Botswana provides free healthcare to all of its residents. Some health treatments in the public sector may be charged a little cost, but sexual reproductive health and antiretroviral medication are provided for free.
Unemployment
- Unemployment benefits are not provided. There is however the Ipelegeng – Unemployment Relief. This program provides work for a maximum of one calendar month. After the month is out, interested people may reapply to be re-enlisted in the program. There are no fees involved, however the individual must be over the age of 18 and be classified as an unemployed citizen.
- Employees are usually entitled to a severance payment if they have served 60 months of continuous employment at one company.
Social Security
- There is no national social security insurance yet in Botswana but the one aspect of social security that is in place is the retirement fund which is voluntary.
PAYROLL ELEMENTS
Income
- Salary, earnings, bonuses, overtime pay, taxable benefits, allowances, and certain lump sum perks are examples of remuneration (revenue from employment). Profits or losses made by a company or trade. Income or profits derived from an individual’s status as a trust beneficiary.
Bonuses
- Employers are not compelled to provide bonuses to their employees, but they may choose to do so as part of their remuneration package.
- Gratuities paid as a result of a termination, severance, settlement, or mutual agreement must be taxed at a rate determined by the authority in accordance with a tax directive.
Allowances
- Expatriate employees are taxed on their salary and any abroad allowances, regardless of where they are paid.
- Taxable income includes living and housing allowances, tax refunds, and the value of perks such as free lodging and motor vehicle usage.
Benefits in Kind
- Benefits in cash (travel, entertainment, education, and so on) and the value of benefits in kind (home, motor vehicle, furnishings, utilities, and so on) granted to an employee are taxed as employment income.
Investment Income
- Capital Gains
In Botswana, capital gains from selling immovable property and marketable securities (including private company shares) are taxed if the source is in Botswana. The tax rates range from 0% to 25%.
- Dividend Income
For resident citizens in Botswana, any dividend income from foreign investments is included in their gross income and taxed at 10%.
- Interest Income
Interest income from banks or building societies in Botswana is tax-exempt for resident individuals up to BWP 7,800. Interest payments to residents are subject to a 10% withholding tax. Interest payments to non-residents are subject to 15% withholding tax.
- Royalties
Commercial royalties paid by a Botswana resident to a non-resident are subject to a 15% WHT.
Retirement Funding
- Employer and employee contributions are used to fund pension programs. Contribution levels, on the other hand, are not regulated. The average employee and employer contribution rate is 5% and 15%, respectively.
- Individuals may make extra voluntary contributions (1-10%) to the fund, but their tax deductibility is limited to the allowed tax limitations set forth in the Income Tax Act.
- The fund is administered by The Botswana Public Officers Pension Fund (BPOPF).
Health Insurance
- Botswana provides free healthcare to all of its residents. Some health treatments in the public sector may be charged a little cost, but sexual reproductive health and antiretroviral medication are provided for free.
Risk Insurance
- There are private risk insurances available in Botswana.
Taxable Income
- Individuals are taxed on earnings, salaries, leave pay, fees, commissions, bonuses, gratuities, compensation and commutation payable under any employment or service contract, pension, and lump sum payment.
- Tax is levied on two-thirds of severance compensation or terminal gratuity.
- Pension contributions of up to 15% of compensation are deductible.
Allowable Deductions
- No business-related costs are deducted unless they are incurred as a condition of employment or for the purpose of creating the employee’s income, such as when the expenditure can be proved to impact the employee’s income level. This role might be filled by a commission-based employee.
- Deductions for payments to an approved retirement benefit plan are permissible up to a maximum of 15% of earned income when a gratuity is not granted to the employee.
- Botswana has no standard or universal deductions.
PAYROLL TAXES AND EMPLOYER CONTRIBUTIONS
Payroll Taxes
- There is no social security yet in Botswana.
Unemployment
- Unemployment benefits are not provided. There is however the Ipelegeng – Unemployment Relief. This program provides work for a maximum of one calendar month. After the month is out, interested people may reapply to be re-enlisted in the program.
- There are no fees involved, however the individual must be over the age of 18 and be classified as an unemployed citizen.
- Employees are usually entitled to a severance payment if they have served 60 months of continuous employment at one company.
Social Security
- There is no national social security insurance yet in Botswana but the one aspect of social security that is in place is the retirement fund which is voluntary.
Workers Compensation
- This provides compensation for injuries sustained or occupational diseases contracted in the course of employment, or for death as a result of such injuries or diseases, as well as for things incidental to and related with the aforementioned.
- The employer bears the total cost.
ADMINISTRATION
Income
- A PAYE system is in place, under which income tax is deducted from salary payable to workers (including non-cash perks).
- Individuals are taxed individually. Unless their yearly income is less than the tax bracket of BWP 48,000 for resident people, all individuals are required to file a tax return. The tax return must be submitted by September 30th.
- All taxpayers must file final tax returns and pay any unpaid taxes at the end of the fiscal year.
Payroll Taxes
- There is no social security yet in Botswana.
Unemployment
- Unemployment benefits are not provided. There is however the Ipelegeng – Unemployment Relief. This program provides work for a maximum of one calendar month. After the month is out, interested people may reapply to be re-enlisted in the program. There are no fees involved, however the individual must be over the age of 18 and be classified as an unemployed citizen.
- Employees are usually entitled to a severance payment if they have served 60 months of continuous employment at one company.
Social Security
- There is no national social security insurance yet in Botswana but the one aspect of social security that is in place is the retirement fund which is voluntary.
Workers Compensation
- When a person is hurt or receives a work-related sickness, he or she must notify his or her employer immediately or within 10 days of the occurrence.
- When a worker provides such notification, the employer must have him or her evaluated by a medical practitioner designated by the employer.
- The employer must notify the Department of Labor of the injury within 17 days by completing the appropriate form (BL form 43/10).
- Workers compensation claims must be filed with the nearest Labor office within 12 months of the date the injury occurred.
Statutory Benefits
- Botswana currently has a law that provides a severance pay that is given to the employee. Botswana provides free healthcare to all of its residents. Unemployment benefits are not provided. There is however the Ipelegeng – Unemployment Relief Fund.
Employee Benefits
- There are employee benefits that are mandatory and available to all employees. Employees are eligible for 15 days of paid annual leave and 8 national paid public holidays. Female employees have the right to 12 weeks of maternity leave.
LEGISLATION
- Employment Act.
- Retirement Funds Act 2014.
STATUTORY BODIES
- Botswana Unified Revenue Service.
- The Botswana Public Officers Pension Fund (BPOPF).
