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NAMIBIA
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Namibia Payroll and Employer of Record: Employment Contracts
Namibia, like any other country, offers a range of visas to foreign citizens. It provides two types of work authorization for international employees. The length of time the employee intends to reside and work in Namibia is a critical element in selecting the suitable one. There are two kinds:
- A work visa that permits the bearer to stay in Namibia for up to three months for relatively short-term engagements.
- A work permit that permits the employee to stay and work in the nation for a period of one to three years.
- Many foreign corporations that wish to move personnel to Namibia get work permits rather than visas in order to embark on long-term projects.
PAID TIME OFF
Annual Vacation
A full-time employee’s yearly paid leave entitlement is up to 24 consecutive days.
Sick
Employees are entitled to at least 30 days of sick leave every 36 months (sick leave cycle) if they work five days a week, or 36 days if they work six days a week. Employees earn one day of sick leave for every 26 days worked during their first year of employment.
Maternity
After six months of work, female employees are entitled to 12 weeks of maternity leave. In general, four weeks of leave are taken before the due date and eight weeks after the birth. If there is a sickness or pregnancy problem, maternity leave might be extended by one month. The employee must submit the company with a medical certificate stating the projected date of confinement prior to the leave, as well as the actual date of return. Except for the basic salary, which is provided by social security, the employer is obligated to pay the employees’ payment.
Paternity
There are no legal requirements for paternity leave.
Family
N/A
National Holidays
Namibia has a total of 12 public holidays which are paid.
Other Paid Time Off
An employee is entitled to five working days of compassionate leave with full pay after 12 months of continuous employment. If a family member dies or suffers from a serious disease, the employee is entitled to compassionate leave.
STATUTORY EMPLOYEE BENEFITS
Unemployment
Unemployment insurance and benefits are not covered by the law.
Workers Compensation
Employers are obligated to contribute to a fund that provides monetary payments for occupational accident, disability, and death under the Employees Compensation Act. Contribution rates vary according to intrinsic occupational risk, ranging from less than 1% in most low-risk commercial/administrative positions to 8% in high-risk industries (drilling, tunnelling, and rock-blasting). Employees earning more than NAD 81,300 per year are often excluded from coverage.
Social Security
The social security system in Namibia is minimal. All workers are required to participate in the Maternity, Sick, and Death Benefit Funds. It is supported by employer and employee payments of 0.9 percent of the base income, with a monthly maximum contribution of NAD 81. (i.e. the total monthly contribution of both the employer and the employee will amount to NAD 162).
Retirement
The establishment of the Government Institutions Pension Fund (GIPF) at the end of 1989 signaled a fresh beginning for all Namibians. As a professionally managed pension fund, GIPF strives to be Namibia’s premier pension fund and a model corporate citizen.
The average retirement age is 60 years old. When the member retires, he or she will get a tax-free lump amount equal to one-third of the entire pension. In addition, if he or she earns more than N$24 000 per year, he or she will get a taxable monthly income for the rest of his or her life. The pension benefits payable are determined by the employee’s last salary and years of service. The pension is paid for the first time at the conclusion of the first month of retirement.
If an employee wishes to retire early, he or she must first obtain permission from the company. To retire early, the person must be 55 years old. The formula is the same as when a person retires at the age of 60, but the pension amount is lowered for each month the employee falls short of the standard retirement age of 60 years.
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
If the employer’s contract with worker’s compensation insurance providers is under the private model, then the workers’ compensation is covered using the free market premise.
Retirement
Private retirement schemes are available.
Health
Private health care otherwise known locally as medical aid is available in Namibia.
Insurance
Private life insurance is available in Namibia.
PERSONAL INCOME TAX
Tax Year
Tax year runs from 1st March to 28th February.
Tax Tables
Taxable Income | Rates of Taxes |
0-50 000 | 0% |
50 000 – 100 000 | 18% |
100 000 – 300 000 | 25% |
300 000 – 500 000 | 28% |
500 000 – 800 000 | 30% |
800 000 – 1 500 000 | 32% |
1 500 000 + | 37% |
Taxation Method
Namibia, as previously stated, has a source basis for taxation. When a person offers services (including employment services) within Namibia, the income is considered to be from a Namibian source if the service is delivered in Namibia and is subject to Namibian taxation. If the individual is a non-resident, he or she may be exempt from taxation in Namibia under a Double Taxation Agreement (DTA) if the terms of the DTA are satisfied.
Double Taxation
Namibia has multiple double taxation agreements.
Residence Requirements
The applicant must have had legal residence in Namibia as the spouse of a Namibian citizen for at least two years. Copies of the marriage certificate and the birth certificate of the spouse born in Namibia. Birth Certificate Copies (applicant). Letter from the Receiver of Revenue certifying the length of stay.
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
In Namibia, a tax credit for foreign taxes paid on dividends, royalties, and similar income may be claimed, up to the amount of tax payable in Namibia. In order to claim the tax credit, proof of taxes paid in the foreign jurisdiction must be given to Inland Revenue.
Health Insurance
Currently, there is no mandated health insurance in Namibia.
Unemployment
Unemployment insurance and benefits are not covered by the law.
Social Security
The social security system in Namibia is minimal. All workers are required to participate in the Maternity, Sick, and Death Benefit Funds. It is supported by employer and employee payments of 0.9 percent of the base income, with a monthly maximum contribution of NAD 81. (i.e. the total monthly contribution of both the employer and the employee will amount to NAD 162).
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
Domestic workers in Namibia are entitled to a set minimum pay of N $9.03 per hour under Namibian labour legislation. Guaranteed and performance-based incentives are widespread in Namibia, but they are not compulsory. The employer, nevertheless, is compelled by law to compensate employees for any overtime worked under the terms of their employment contract.
Allowances
Gross employment income covers all cash and in-kind revenues for services given, including, but not limited to, the following:
- Compensation (e.g. salaries and fees).
- Benefits on the margins (e.g. free use of company assets or benefits provided by the employer).
- Allowances and subsidies are subject to business expenditure deductions.
- The value of the accommodation given by the employer.
- The monetary value assigned to the usage of a business car.
Benefits in Kind
- In most cases, benefits-in-kind are taxable remuneration.
- Employer payments to an approved Namibian medical assistance, pension, provident, retirement annuity fund, and educational insurance policy are not taxable in the employee’s hands.
- Employee payments to Namibian registered pension, provident, retirement annuity funds, and insurance policies for educational purposes are tax deductible up to NAD 40,000 per year.
Investment Income
- Non-resident shareholders tax (NRST), a WHT, will apply on dividends issued by a Namibian firm to a non-resident individual.
- Where a firm owns more than 25% of a Namibian company, NRST is due at the regular rate of 10%. In all other circumstances, the NRST due is 20%. If a DTA with Namibia is in effect, the NRST rate may be decreased. The NRST is due within 20 days of the month in which the dividends were issued. The term “dividends” refers to “any sum delivered by a firm… to its shareholders…”
- The NRST must be withheld by the Namibian firm issuing the dividend.
- On interest accruing to any individual, other than a Namibian corporation, from a registered banking institution or unit trust scheme in Namibia, a WHT of 10% is due, based on the gross amount of interest. The withheld tax is a final tax, and it is the financial institution’s responsibility to withhold it. It is the financial institution’s responsibility to withhold the tax and hand it over to the revenue authorities.
- A WHT of 10% will also be levied on the gross amount of any interest paid to a non-resident by any person. The WHT is due 20 days after the interest is paid in the previous month. Interest is regarded to be paid on the sooner of actual payment or payment in full.
Retirement Funding
- The establishment of the Government Institutions Pension Fund (GIPF) at the end of 1989 signalled a fresh beginning for all Namibians. As a professionally managed pension fund, GIPF strives to be Namibia’s premier pension fund and a model corporate citizen.
- The average retirement age is 60 years old. When the member retires, he or she will get a tax-free lump amount equal to one-third of the entire pension. In addition, if he or she earns more than N$24 000 per year, he or she will get a taxable monthly income for the rest of his or her life. The pension benefits payable are determined by the employee’s last salary and years of service. The pension is paid for the first time at the conclusion of the first month of retirement.
- If an employee wishes to retire early, he or she must first obtain permission from the company. To retire early, the person must be 55 years old. The formula is the same as when a person retires at the age of 60, but the pension amount is lowered for each month the employee falls short of the standard retirement age of 60 years.
Health Insurance
Currently, there is no mandated health insurance in Namibia.
Risk Insurance
N/A
Taxable Income
On interest accruing to any individual, other than a Namibian corporation, from a registered banking institution or unit trust scheme in Namibia, a WHT of 10% is due, based on the gross amount of interest. The withheld tax is a final tax, and it is the financial institution’s responsibility to withhold it. It is the financial institution’s responsibility to withhold the tax and hand it over to the revenue authorities.
A WHT of 10% will also be levied on the gross amount of any interest paid to a non-resident by any person. The WHT is due 20 days after the interest is paid in the previous month. Interest is regarded to be paid on the sooner of actual payment or payment in full. The minimum rate is zero percent, while the maximum rate is 37 percent.
Allowable Deductions
There are no standard deductions for company costs for workers. Travel, entertainment, and motor vehicle costs may be deducted, but the employee must demonstrate that they were expended in the generating of taxable revenue. Where the employer provides allowances, this onus is more easily satisfied, although the deduction cannot generally exceed the amount. An employee may deduct payments of up to NAD 40,000 per year to a registered in Namibia authorized pension, retirement annuity, provident, and educational insurance fund.
PAYROLL TAXES AND EMPLOYER CONTRIBUTIONS
Payroll Taxes
- Social security is paid on a 50:50 basis by employers and employees.
- Contributions are computed at 0.9 percent of wages, with each contributing a minimum of N$2.70 and a maximum of N$81.00 each month.
- Payments must be made within 20 days after the end of the month.
- A salary earner who makes more than N$ 40 000 per year and non-salary income in excess of N$ 5 000 per month is required to pay tax and should register for income tax.
- Registration is completed at the IRD by completing a registration form, after which the taxpayer is issued an Income Tax Number.
- It might take up to four days to register for Pay-As-You-Earn (PAYE) tax with the Receiver of Revenue.
Unemployment
Unemployment insurance and benefits are not covered by the law.
Social Security
The social security system in Namibia is minimal. All workers are required to participate in the Maternity, Sick, and Death Benefit Funds. It is supported by employer and employee payments of 0.9 percent of the base income, with a monthly maximum contribution of NAD 81. (i.e. the total monthly contribution of both the employer and the employee will amount to NAD 162).
Workers Compensation
Employers are obligated to contribute to a fund that provides monetary payments for occupational accident, disability, and death under the Employees Compensation Act. Contribution rates vary according to intrinsic occupational risk, ranging from less than 1% in most low-risk commercial/administrative positions to 8% in high-risk industries (drilling, tunnelling, and rock-blasting). Employees earning more than NAD 81,300 per year are often excluded from coverage.
ADMINISTRATION
Income
Monthly pay-as-you-earn (PAYE) returns must be filed by employers within 15 days after the end of the month. Namibia has a source-based tax system, which implies that money earned in Namibia or presumed to be earned in Namibia is taxed in Namibia unless a special exemption is provided.
Payroll Taxes
- Social security is paid on a 50:50 basis by employers and employees.
- Contributions are computed at 0.9 percent of wages, with each contributing a minimum of N$2.70 and a maximum of N$81.00 each month.
- Payments must be made within 20 days after the end of the month.
- A salary earner who makes more than N$ 40 000 per year and non-salary income in excess of N$ 5 000 per month is required to pay tax and should register for income tax.
- Registration is completed at the IRD by completing a registration form, after which the taxpayer is issued an Income Tax Number.
- It might take up to four days to register for Pay-As-You-Earn (PAYE) tax with the Receiver of Revenue.
Unemployment
Unemployment insurance and benefits are not covered by the law.
Social Security
The social security system in Namibia is minimal. All workers are required to participate in the Maternity, Sick, and Death Benefit Funds. It is supported by employer and employee payments of 0.9 percent of the base income, with a monthly maximum contribution of NAD 81. (i.e. the total monthly contribution of both the employer and the employee will amount to NAD 162).
Workers Compensation
Employers are obligated to contribute to a fund that provides monetary payments for occupational accident, disability, and death under the Employees Compensation Act. Contribution rates vary according to intrinsic occupational risk, ranging from less than 1% in most low-risk commercial/administrative positions to 8% in high-risk industries (drilling, tunnelling, and rock-blasting). Employees earning more than NAD 81,300 per year are often excluded from coverage.
Statutory Benefits
According to the country’s labour rules, a Namibia benefits management strategy must contain time off. Employees should be given time off for Namibia’s 12 public holidays, as well as 24 days of paid yearly leave in a row. They also have the right to one day of sick leave for every five weeks they work for your organization. Employees should be entitled to 30 days of sick leave after their first year, or 36 days if they work six-day weeks. When they take the leave, they must provide a medical certificate.
Namibia also has a maternity leave policy that is mandated by law. All female employees should be entitled to four weeks of maternity leave before the birth of their child and another eight weeks afterward. There is no formal paternity leave policy in the nation.
Employee Benefits
Many benefits are likely to be included in the Namibian benefits management plan, but it is recommended starting with those that are legally guaranteed. For example, the country observes 12 national holidays, and employees should be entitled to paid time off on those holidays. In most cases, all employees are entitled to at least 24 days of paid yearly leave. In Namibia, most female employees are entitled to 12 weeks of paid maternity leave. Currently, there is no paternity leave.
LEGISLATION
The Namibian Labour Act (Act 6 of 1992) comprises broad and detailed laws dealing with fundamental job conditions, as well as rules governing service termination, dismissal of workers, and disciplinary action.
STATUTORY BODIES
https://oag.gov.na/statutory-bodies-reports
