Benin Payroll Outsourcing, Payroll Software and Employer Of Record (EOR) services.
Contact us for a payroll simulation, ask a practical question or download our free country guide for Benin.
BENIN
Deploy one employee or payroll thousands. Why not just contact us to find out how?
Save time! Don't spend hours researching!
Contact us for a payroll simulation, ask a practical question or find out how things work in the country.
Benin Payroll and Employment of Record: Employment Contracts
Benin has three general types of visas:
- Business
- Tourist
- Transient
The requirements vary depending on the type, but most employees will need to acquire a business visa and work permit to remain compliant. Most visas are only valid for 30 or 90 days. Expatriates must apply before entering Benin because visas cannot be obtained on the spot.
Probation Periods
The Labour Code allows for a probation period of up to three months. Individuals with a tax domicile in Benin, whether Beninese or foreign nationals, are generally subject to personal income tax on worldwide income. Individuals who are not residents of Benin are only taxed on income earned in Benin.
Notice Periods
The following are the notice periods:
- Hourly employees have a 15-day notice period.
- Employees, workers, and laborers have a one-month notice period.
- Supervisors and executives have the right to three months’ notice.
Minimum Wage
- The monthly minimum wage in Benin is 40,000 CFA francs; the government has also established specific minimum wage scales for a variety of occupations.
Working Hours
N / A
Overtime
- Workers are not permitted to work more than 240 hours of overtime per year.
- Overtime is paid at 112 percent of the regular hourly rate for the 41st to 48th hour per week.
- 135 percent of normal hourly rate after the 48th hour of the week.
Non Compete
- There is no explicit mention of a non-compete clause in the Law in Benin. Unless a legitimate non-compete provision is signed in a contract between both parties, the employee is free to compete fairly with their previous employer.
Severance
Employees have the right to severance pay. The amount depends on length of service:
- 30 percent of average monthly salary for the first five years of employment
- 6-10 years of service-35 percent of monthly average salary
- 10+ years of experience = 40% of average monthly salary
In most cases, an employee who is fired for gross negligence is not entitled to severance pay.
Termination
- Employers may fire an employee for a legitimate reason, such as:
- worker health
- inability to maintain employment
- competence or conduct
- organizational or technological changes
- economic hardship or company closure
If the employer fires an employee for personal reasons, the employee must be notified in writing, along with the reasons for the termination.
Collective Bargaining
A collective bargaining agreement (“collective agreement”) is an agreement entered into between an employee union and (an employer union or) an employer who is not a union member to govern the execution, context, and termination of employment agreements. Only an authorized union may sign a collective bargaining agreement with an employer.
Enforcement
N / A
PAID TIME OFF
Annual Vacation
- Employees are generally entitled to 24 paid days of annual leave per year, with increases at the following rate: after 20 years and an extra 2 days After 25 years, an extra 4 days. An extra 6 days after 30 years.
Sick
- Employees with fewer than two years of service are usually entitled to six months of sick leave. Employees with two or more years of service are usually entitled to 12 months of sick leave. If an employee has been with the company for less than a year, he or she is generally entitled to one month of paid leave.
Maternity
- Female employees are generally entitled to 6 weeks of paid leave before and 8 weeks after giving birth, with the employer covering half of the cost and social insurance covering the rest.
Paternity
- In most cases, fathers are entitled to three days of paid paternity leave.
Family
N / A
National Holidays
- Benin has a total of 13 public holidays which are paid.
Other Paid Time Off
N / A
STATUTORY EMPLOYEE BENEFITS
Unemployment
A 2005 collective agreement requires employers in the private and quasipublic sectors to provide severance pay to dismissed employees with at least one year of service who have not committed any serious misconduct. Based on the length of service, the payment amount is a percentage of the employee’s monthly salary for each year of service: Individual dismissal pays 30% a year for one to five years of service, 35% a year for six to ten years, and 50% a year for more than ten years of service; collective dismissal pays 35% a year for one to five years of service, 40% a year for six to ten years, and 45 percent a year for more than ten years of service.
Workers Compensation
Social insurance: 1% to 4% of gross monthly covered payroll, depending on risk assessment. The legally mandated monthly minimum wage is used to calculate contributions. The monthly legal minimum wage is 40,000 CFA francs. Employers with at least 20 employees make monthly contributions; employers with one to 19 employees make quarterly contributions. The total cost of employer liability.
Social Security
- Employee: 3.6 percent of gross monthly covered earnings; voluntarily insured: 10% of last gross salary earned while in mandatorily covered employment. The legally mandated monthly minimum wage is used to calculate contributions. The monthly legal minimum wage is 40,000 CFA francs.
- Employer: 6.4 percent of covered gross monthly payroll. The legally mandated monthly minimum wage is used to calculate contributions. The monthly legal minimum wage is 40,000 CFA francs. Employers with at least 20 employees make monthly contributions; employers with one to 19 employees make quarterly contributions.
Retirement
- The pension is 30% of the insured’s average monthly earnings for the first 15 years of coverage, plus 2% of average monthly earnings for each 12 months of coverage beyond 180 months. In the last five years of coverage, average monthly earnings are 1.66 percent of total earnings used to calculate contributions. Employee contributions may be refunded to foreign workers who leave the country permanently and to workers who continue to work between the ages of 60 and 65. (only for contributions made while aged 60 to 65).
- Pension anticipée (early pension): The pension is reduced by 5% for each year claimed before the normal retirement age; once the normal retirement age is reached, the full pension is paid.
Health
- Medical Aid is a private option and is based on an employee voluntary basis to sign up or for the employer to offer it.
PRIVATE EMPLOYEE BENEFITS
Workers Compensation
- Private workers compensation is not yet available in Benin.
Retirement
- Private retirement schemes are unclear.
Health
- Private healthcare is available in Benin.
Insurance
- Private insurance is unclear.
PERSONAL INCOME TAX
Tax Year
- Tax year in Benin is a calendar year.
Tax Tables
Taxable Income | Rates of Taxes |
0 – 50 000 | 0% |
50 000- 130 000 | 10% |
130 000 – 280 000 | 15% |
280 000 – 530 000 | 20% |
530 000 + | 30% |
Taxation Method
- Tax in Benin is progressive.
Double Taxation
Benin has several double taxation agreements.
Residence Requirements
N / A
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
N / A
Health Insurance
- A 2005 collective agreement requires employers in the private and quasipublic sectors to provide severance pay to dismissed employees with at least one year of service who have not committed any serious misconduct. Based on the length of service, the payment amount is a percentage of the employee’s monthly salary for each year of service: Individual dismissal pays 30% a year for one to five years of service, 35% a year for six to ten years, and 50% a year for more than ten years of service; collective dismissal pays 35% a year for one to five years of service, 40% a year for six to ten years, and 45 percent a year for more than ten years of service.
Unemployment
- A 2005 collective agreement requires employers in the private and quasipublic sectors to provide severance pay to dismissed employees with at least one year of service who have not committed any serious misconduct. Based on the length of service, the payment amount is a percentage of the employee’s monthly salary for each year of service: Individual dismissal pays 30% a year for one to five years of service, 35% a year for six to ten years, and 50% a year for more than ten years of service; collective dismissal pays 35% a year for one to five years of service, 40% a year for six to ten years, and 45 percent a year for more than ten years of service.
Social Security
- Employee: 3.6 percent of gross monthly covered earnings; voluntarily insured: 10% of last gross salary earned while in mandatorily covered employment. The legally mandated monthly minimum wage is used to calculate contributions. The monthly legal minimum wage is 40,000 CFA francs.
- Employer: 6.4 percent of covered gross monthly payroll. The legally mandated monthly minimum wage is used to calculate contributions. The monthly legal minimum wage is 40,000 CFA francs. Employers with at least 20 employees make monthly contributions; employers with one to 19 employees make quarterly contributions.
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
- Bonuses are not mandatory in Benin.
Allowances
N / A
Benefits in Kind
N / A
Investment Income
Capital Gains Tax
- Unless new investment is made within three years, capital gains from the sale of business assets are taxed at the ordinary company income tax rate (under conditions). If the taxpayer ceases operations or sells his business during the three-year period, the reinvested capital gains will be taxed immediately.
- Non-resident corporations’ capital gains are taxed at 30%.
Retirement Funding
- The pension is 30% of the insured’s average monthly earnings for the first 15 years of coverage, plus 2% of average monthly earnings for each 12 months of coverage beyond 180 months. In the last five years of coverage, average monthly earnings are 1.66 percent of total earnings used to calculate contributions. Employee contributions may be refunded to foreign workers who leave the country permanently and to workers who continue to work between the ages of 60 and 65. (only for contributions made while aged 60 to 65).
- Pension anticipée (early pension): The pension is reduced by 5% for each year claimed before the normal retirement age; once the normal retirement age is reached, the full pension is paid.
Health Insurance
Unclear online information.
Risk Insurance
N / A
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.
Allowable Deductions
The first XOF 50,000 of employment income is tax-free. Deductions are available for dependent children, reducing the tax due as follows:
- 0% in the case of one dependent child
- 5% in the case of two dependent children
- 10% in the case of three dependent children
- 15% in the case of four dependent children
- 20% in the case of five dependent children
- 23% in the case of six or more dependent children
PAYROLL TAXES AND EMPLOYER CONTRIBUTIONS
Payroll Taxes
N / A
Unemployment
N / A
Social Security
N / A
Workers Compensation
N / A
ADMINISTRATION
Income
- The first XOF 50,000 of employment income is tax-free.
- Individuals with a tax domicile in Benin are normally taxed on their worldwide income, whereas those who are not domiciled in the country are taxed only on their Benin-sourced income.
- Domicile is based on habitual residence, which can be demonstrated by a permanent home, primary place of residence, or economic centre.
Payroll Taxes
Employers must pay a payroll levy (versement patronal sur salaires) of 4% on the gross value of salaries, wages, allowances, and in-kind benefits.
• During their first year of operation, newly incorporated businesses are exempt from payroll tax.
Unemployment
- A 2005 collective agreement requires employers in the private and quasipublic sectors to provide severance pay to dismissed employees with at least one year of service who have not committed any serious misconduct. Based on the length of service, the payment amount is a percentage of the employee’s monthly salary for each year of service: Individual dismissal pays 30% a year for one to five years of service, 35% a year for six to ten years, and 50% a year for more than ten years of service; collective dismissal pays 35% a year for one to five years of service, 40% a year for six to ten years, and 45 percent a year for more than ten years of service.
Social Security
- Employee: 3.6 percent of gross monthly covered earnings; voluntarily insured: 10% of last gross salary earned while in mandatorily covered employment. The legally mandated monthly minimum wage is used to calculate contributions. The monthly legal minimum wage is 40,000 CFA francs.
- Employer: 6.4 percent of covered gross monthly payroll. The legally mandated monthly minimum wage is used to calculate contributions. The monthly legal minimum wage is 40,000 CFA francs. Employers with at least 20 employees make monthly contributions; employers with one to 19 employees make quarterly contributions.
Workers Compensation
- Social insurance: 1% to 4% of gross monthly covered payroll, depending on risk assessment. The legally mandated monthly minimum wage is used to calculate contributions. The monthly legal minimum wage is 40,000 CFA francs. Employers with at least 20 employees make monthly contributions; employers with one to 19 employees make quarterly contributions. The total cost of employer liability.
Statutory Benefits
- In Benin, employees are entitled to the 13 public holidays which are paid. They get 24 days of paid leave, 14 weeks of maternity and 3 days of paternity leave.
Employee Benefits
- In Benin, employees are entitled to the 13 public holidays which are paid. They get 24 days of paid leave, 14 weeks of maternity and 3 days of paternity leave.
LEGISLATION
- Constitution of the Republic of Benin 1990
- Labour Code, 1998
- Hiring, Workforce Placement and Termination of the Employment Contract
- General Collective Labour Agreement, 2005
- Act No. 98-019 of 21 March 2003 on the Code of Social Security
STATUTORY BODIES
N / A
