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BOTSWANA
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Under the Employment of Non-Citizens Act, Botswana has a single work visa, also known as a work permit, for all foreign employees working in the nation. Employers are not permitted to hire employees who do not have a valid Botswana work permit or a certificate of exemption. The Immigration Board analyses all permits and assigns a validity term. Employees can often renew their permits by repeating the initial application procedure.
Probation Periods
- Probation typically lasts three months for unskilled personnel and can last up to a year for experienced staff.
Notice Periods
Employment contracts cease when a defined piece of labour is done, a set length of time expires, or are legitimately terminated. A one-month notice period is required by law and must be provided by any party to an employment contract. A notification obligation may be waived by any party. If notice is not provided, the party in default pays the other party a sum equivalent to basic pay for the period a notice is due to be given, or the basic pay equal to the balance of the notice period if notice is given and partially observed. If notice is provided during the probation term, the notice period is 14 days.
Minimum Wage
- For most full-time workers in the private sector, the Botswana minimum wage is 3.8 Botswana pula per hour. Domestic employees get 2.7 Botswana pula per hour, while agricultural laborers earn 550 Botswana pula per month. Botswana’s minimum wage was last adjusted on January 1, 2015.
Working Hours
- The workweek is generally limited to 48 hours, with no more than 9 hours per day for a 5-day week and 8 hours per day for a 6-day week.
Overtime
- Employees are allowed 14 hours of overtime per week and are paid 1 1/2 times their regular hourly rate. Work on public holidays or during rest periods should be compensated at double the standard salary rate.
Non Compete
- Employers can impose restrictions on employees through non-compete agreements or a clear condition in the employment contract. Such limitations must be reasonable and for a specific period of time.
- Employees have implicit duties of secrecy, loyalty, and fiduciary duty to their employers. Employees in higher positions of employment have a higher level of fiduciary responsibility. Once clear provisions are established in the non-compete agreement or the employment agreement between the parties, the extent of the employee’s responsibilities will be known.
Severance
- Severance is paid at the rate of one day per month of service for the first five years of employment and two days for each month worked beyond that. Employment is considered confirmed after the probation term, if one is stated.
Termination
Employment contracts cease when a defined piece of labour is done, a set length of time expires, or are legitimately terminated. A one-month notice period is required by law and must be provided by any party to an employment contract.
Collective Bargaining
The Trade Disputes Act governs collective bargaining. Every collective labour agreement is intended to be legally binding on the parties who have entered into it. A collective labour agreement, on the other hand, will cease to be binding on the parties upon the expiration of one month, or such longer period as the notice may specify, immediately after any party to the agreement serves notice in writing to every other party to the agreement that it repudiates the agreement. Having stated so, no notice may be issued without the Minister’s written consent prior to the expiration of six months from the day the agreement entered into force.
Enforcement
Administration of Justice:
- Interpreting the law
- To settle conflicts via the adjudication of both criminal and civil matters.
- To guarantee that the other branches of government follow the constitution.
- To hear criminal cases brought by the state as well as civil lawsuits made by individuals and private corporations.
PAID TIME OFF
Annual Vacation
A full-time employee’s yearly paid leave entitlement is 15 working days after one year of employment. An employee is required to take all of their annual leave at the same time.
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 kid 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. The law provides for severance pay, which is given by the employer at the end of the employment relationship.
Workers Compensation
- This provides for workers’ 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.
- 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 Labour of the injury within 17 days by completing the appropriate form (BL form 43/10).
- Workers compensation claims must be filed with the nearest Labour office within 12 months of the date the injury occurred.
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. For tax reasons, the Income Tax Act restricts contributions to a maximum of 35% of contributed earnings. The average employee and employer contribution rate is 5% and 10%, respectively.
- Individuals may make extra voluntary contributions to the fund, but their tax deductibility is limited to the allowed tax limitations set forth in the Income Tax Act.
- The trustees set the retirement age, which is reflected in the fund rules. Under a normal plan, the average retirement age is 60. If a member is entirely or partially incapacitated, he or she may retire at the age of 45 or earlier.
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 available in Botswana.
Retirement
- Private retirement schemes are unclear.
Health
- Private healthcare is available in Botswana. Private health care institutions provide the greatest degree of medical treatment 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
The progressive tax system has the lowest tax bracket at 5% and the highest at 25%. This tax table is in the local currency of BWP.
Taxable Income | Rates of Taxes |
0 – 72 000 | 5% over BWP 36 000 |
72 001 – 108 000 | 12.50% |
108 001 – 144 000 | 18.75% |
144 001 + | 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. However, it is not mandatory to contribute.
Unemployment
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.
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
- Bonuses are added to an individual’s monthly income. 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.
- Employers are not compelled to provide bonuses to their employees, but they may choose to do so as part of their remuneration package.
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 Tax
- Gains on the sale of designated capital assets (immovable property and marketable securities, including shares in private firms) are included in the corporate taxpayer’s taxable income. For the period from acquisition until 30 June 1982, immovable property acquisition expenses are subject to a 10% compound annual inflation addition, and afterwards to an inflation addition based on the increase in the consumer price index to the date of sale. Other gains are not subject to inflation adjustments, but the taxable gain is fixed at 75% of the overall gain.
- The public firm whose shares are being sold is a resident corporation.
- The Botswana Stock Exchange trades the shares, units, or debentures.
- The firm has made 49 percent or more of its shares available for trading on the Botswana Stock Exchange.
- This exemption is only available if the taxpayer owned the shares, units, or debentures for at least one year before the date of disposal.
- The total amount of capital losses is deducted from the total amount of capital gains in the same tax year. Any excess loss is deductible only from aggregate profits over losses accrued in the next tax year. Capital losses cannot be deducted from other income under any conditions.
Retirement Funding
Retirement funding
- Employer and employee contributions are used to fund pension programs. Contribution levels, on the other hand, are not regulated. For tax reasons, the Income Tax Act restricts contributions to a maximum of 35% of contributed earnings. The average employee and employer contribution rate is 5% and 10%, respectively.
- Individuals may make extra voluntary contributions to the fund, but their tax deductibility is limited to the allowed tax limitations set forth in the Income Tax Act.
- The trustees set the retirement age, which is reflected in the fund rules. Under a normal plan, the average retirement age is 60. If a member is entirely or partially incapacitated, he or she may retire at the age of 45 or earlier.
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. However, it is not mandatory to contribute.
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. An individual may avoid paying tax in Botswana if he is absent from the country for more than 183 days in a year.
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 but there is a retirement fund that is not mandatory and is completely voluntary.
- In addition to central government taxes, there are no income taxes.
Unemployment
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.
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 for workers’ 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.
- 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 Labour of the injury within 17 days by completing the appropriate form (BL form 43/10).
- Workers compensation claims must be filed with the nearest Labour office within 12 months of the date the injury occurred.
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 but there is a retirement fund that is not mandatory and is completely voluntary.
- In addition to central government taxes, there are no income taxes.
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. The law provides for severance pay, which is given by the employer at the end of the employment relationship.
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 for workers’ 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.
- 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 Labour of the injury within 17 days by completing the appropriate form (BL form 43/10).
- Workers compensation claims must be filed with the nearest Labour 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. 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.
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. Eight days of leave must be taken within six months after starting work, and the remaining days must be utilized within three years.
- Female employees have the right to 12 weeks of maternity leave. They will need a doctor’s note to take this leave, and employees should be paid at least 50% of their regular salary while on maternity leave.
LEGISLATION
- Employment Act
STATUTORY BODIES
- Non-Bank Financial Institutions Regulatory Authority (NBFIRA).
- Botswana Unified Revenue Service
