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SIERRA LEONE
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Sierra Leone Payroll and Employer of Record: Employment Contracts
While Sierra Leone offers a variety of visas, the following are the most relevant:
- Work permit/Visa: The most common option for foreign employees. The intended employer must sponsor each employee for the duration of their stay. Work permits are renewed yearly. Together with a work permit an employee must also obtain a resident visa. If the employee switches to another employer they will need to apply again for a work permit. In order to obtain a work permit, a job offer must first be secured.
PAID TIME OFF
Annual Vacation
Employees are generally entitled to the following paid annual leave: 19 days of leave after one to five years of employment and 22 days of leave after five to ten years of employment. After ten years of service, you are entitled to 28 days of paid leave.
Sick
Employees are generally entitled to a minimum of five paid sick days per year.
Maternity
Employees who are female are legally allowed 12 weeks of paid maternity leave.
Paternity
N/A
Family
N/A
National Holidays
Sierra Leone has a total of 11 public holidays which are paid.
Other Paid Time Off
N/A
STATUTORY EMPLOYEE BENEFITS
Unemployment
There is no government-provided unemployment insurance program. Thus, the country’s labor law does not require employers to contribute to an unemployment insurance fund.
Workers Compensation
In the case of an injury, disability, or death resulting from and occurring in the course of employment, the Workers’ Compensation Act of 1965 offers compensation to employees or their families. Based on the severity of the damage or impairment and the worker’s earnings at the time of the incident, the amount of compensation is decided.
Social Security
Employee: 5% of monthly earnings; 15% for the voluntarily insured. Contributions are calculated using no minimum or maximum earnings.
Employer: 10% of monthly payroll. Contributions are calculated using no minimum or maximum earnings.
Retirement
Age 60 with a minimum of 180 months of paid or credited contributions. Contributions made prior to 2001 are credited to public-sector employees who were still on the job on January 1, 2002.
Early retirement: At the age of 55, with a minimum of 180 months of paid contributions.
Age gratuity: Paid to the insured upon retirement.
The pension is not accessible abroad.
30 % of the insured’s average earnings plus 2 % of average earnings for each and every 12 months of paid or credited contributions in excess of 180 months is paid. Average earnings are the insured’s average monthly earnings over the last five years. The minimum monthly old-age pension is 50 % of the national monthly minimum wage.
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.
There is a national health insurance program that is mandatory for all residents who are fully employed.
PRIVATE EMPLOYEE BENEFITS
Workers Compensation
There is no private workers compensation yet in Sierra Leone.
Retirement
There are no private pension options yet in Sierra Leone.
Health
Private health care is available in Sierra Leone.
Insurance
Private life insurance is available in Sierra Leone.
PERSONAL INCOME TAX
Tax Year
Tax year runs from January 1st to December 31st.
Tax Tables
Resident and non-resident individuals are taxed at a rate of 15.00 % on taxable income.
Taxation Method
Taxes are levied on income earned during the calendar year. Sierra Leone uses a proportional tax system for their income tax.
Double Taxation
Sierra Leone has a few double taxation agreements.
Residence Requirements
A resident is someone who lives in Sierra Leone for more than 182 days in a 12-month period that begins or ends in the year of assessment.
Payroll Calendars
Employees are typically paid on a monthly basis.
Rebates & Tax Credits
Rebates and tax credits are made available to people and businesses in Sierra Leone under certain conditions in an effort to encourage investment, foster economic growth and support particular industries or activities.
Health Insurance
Sierra Leone’s healthcare is not free. The Sierra Leone health care system is divided into two tiers of care: peripheral healthcare units (PHUs) with an extended community health program and secondary care, which includes 21 district and three referral hospitals; there are also 45 private clinics and 27 private hospitals, the majority of which are located in the Freetown area.
Unemployment
There is no government-provided unemployment insurance program. Thus, the country’s labor law does not require employers to contribute to an unemployment insurance fund.
Social Security
Employee: 5% of monthly earnings; 15% for the voluntarily insured. Contributions are calculated using no minimum or maximum earnings.
Employer: 10% of monthly payroll. Contributions are calculated using no minimum or maximum earnings.
PAYROLL ELEMENTS
Income
Salary, earnings, bonuses, overtime pay, taxable benefits, allowances and certain lump sum perks are examples of remuneration (revenue from employment).
Bonuses
An employer is not required by law to pay bonuses to its employees.
Allowances
Employers are not required by law to provide certain allowances, such as housing or transportation allowances. The specifics of payroll allowances under Sierra Leonean labor law may vary depending on the terms of individual employment contracts.
Benefits in Kind
Employers are not required by law to provide certain benefits in kind to their employees. The terms and conditions under which these benefits are provided may be specified in individual employment contracts or collective bargaining agreements.
Investment Income
Investment income, including interest earned on savings accounts or bonds, may be subject to taxation.
Retirement Funding
Age 60 with a minimum of 180 months of paid or credited contributions. Contributions made prior to 2001 are credited to public-sector employees who were still on the job on January 1, 2002.
Early retirement: At the age of 55, with a minimum of 180 months of paid contributions.
Age gratuity: Paid to the insured upon retirement.
The pension is not accessible abroad.
30 % of the insured’s average earnings plus 2 % of average earnings for each and every 12 months of paid or credited contributions in excess of 180 months is paid. Average earnings are the insured’s average monthly earnings over the last five years. The minimum monthly old-age pension is 50% of the national monthly minimum wage.
Health Insurance
Sierra Leone’s healthcare is not free. The Sierra Leone health care system is divided into two tiers of care: Peripheral Healthcare Units (PHUs) with an extended community health program and secondary care, which includes 21 district and three referral hospitals; there are also 45 private clinics and 27 private hospitals, the majority of which are located in the Freetown area.
Risk Insurance
The Sierra Leonean labor law does not specifically address risk insurance for employees.
Taxable Income
Resident and non-resident individuals are taxed at a rate of 15.00 % on taxable income.
Allowable Deductions
Payroll deductions such as taxes, social security contributions, pension, health insurance and loan repayments are allowed.
PAYROLL TAXES AND EMPLOYER CONTRIBUTIONS
Payroll Taxes
Resident and non-resident individuals are taxed at a rate of 15.00 % on taxable income.
Unemployment
There is no government-provided unemployment insurance program. Thus, the country’s labor law does not require employers to contribute to an unemployment insurance fund.
Social Security
Employee: 5% of monthly earnings; 15% for the voluntarily insured. Contributions are calculated using no minimum or maximum earnings.
Employer: 10% of monthly payroll. Contributions are calculated using no minimum or maximum earnings.
Workers Compensation
In the case of an injury, disability, or death resulting from and occurring in the course of employment, the Workers’ Compensation Act of 1965 offers compensation to employees or their families. Based on the severity of the damage or impairment and the worker’s earnings at the time of the incident, the amount of compensation is decided.
ADMINISTRATION
Income
Sierra Leone personal income tax rate is expected to be around 15.00 % in 2022.
Payroll Taxes
Resident and non-resident individuals are taxed at a rate of 15.00 % on taxable income.
Unemployment
There is no government-provided unemployment insurance program. Thus, the country’s labor law does not require employers to contribute to an unemployment insurance fund.
Social Security
Employee: 5% of monthly earnings; 15% for the voluntarily insured. Contributions are calculated using no minimum or maximum earnings.
Employer: 10% of monthly payroll. Contributions are calculated using no minimum or maximum earnings.
Workers Compensation
In the case of an injury, disability, or death resulting from and occurring in the course of employment, the Workers’ Compensation Act of 1965 offers compensation to employees or their families. Based on the severity of the damage or impairment and the worker’s earnings at the time of the incident, the amount of compensation is decided.
Statutory Benefits
Paid leave/time-off includes :
- annual leave
- sick leave
- maternity leave
- paternity leave
- public holidays
Employee Benefits
All employees are entitled to time off, including on public holidays.
LEGISLATION
The primary legislation governing labor laws in Sierra Leone is the Labor Act of 2004, the Social Security Act of 2005 and Pension Reform Act of 2009.
STATUTORY BODIES
Ministry of Labor and Social Security
National Social Security and Insurance Trust (NASSIT)
National Pension Commission (NPC)
Labor Relations Court
Occupational Safety and Health Authority (OSHA)
