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SOMALIA
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Somalia Payroll and Employer of Record: Employment Contracts
In compliance with Somalia’s visa rules, visitors must apply for, submit, and get a Somalia visa. To enter, remain in, or leave Somalia, you must obtain a valid Somalia visa, according to the country’s visa regulations.
In order for a Somalia visa application to be filed, reviewed, and accepted, specific information must be given. The nation from which the passport was obtained and issued, the duration of the visitor’s intended stay in Somalia, and the purpose of the trip are among the information provided.
The Somalia government introduced the Somalia visa, which is open to non-visa-exempt people from anywhere in the globe. Travelers with a Somalia visa are permitted stays in Somalia of up to 90 days per entry. With the introduction of this visa, travelers and business travelers alike have been permitted to visit Somalia.
Probation Periods
Usually no more than 3 months.
Notice Periods
Either of the parties may terminate a contract of employment by giving written notice.
For manual workers – no less than ten days
For non-manual workers – no less than thirty days
Minimum Wage
Workers in Somalia are not required to be paid a minimum wage. Pay rates must be negotiated directly with the employer via collective bargaining or another method of negotiating a fair living wage.
Working Hours
The standard work week is 8 hours per day, 6 days a week.
Overtime
Overtime is paid at a premium of 30%, depending on the time worked above weekly hours.
Non Compete
In the employment agreement, employers may include a non-competition provision.
Severance
For a worker with 1 year of service is equivalent to 4.3 weeks of pay
For a worker with 5 years of service is equivalent to 21.7 weeks of pay
For a worker with 10 years of service is equivalent to 43.3 weeks of pay
Termination
The employer is required to notify the employee’s union. Furthermore, they must notify the labor officer in charge of the employee’s work area of the reasons for and extent of the proposed redundancy at least one month before the scheduled date of termination due to redundancy. If the employee is not a union member, the employer must notify him or her personally and in writing. A collective bargaining agreement must exist between the employer and a trade union outlining the terminal benefits provided upon redundancy and ensuring that the contract does not discriminate against the employee based on union membership or non-union membership.
Collective Bargaining
Is recognized in Somalia.
Enforcement
In Somalia, the Ministry of Labor and Social Affairs is in charge of ensuring that the labor laws are being followed.
In addition, Somalia has labor courts that are in charge of resolving disputes over the labor laws involving both employers and employees. These courts are run by the Ministry of Labor and Social Affairs and are designed to offer a method for swiftly and fairly resolving disputes.
PAID TIME OFF
Annual Vacation
Employees have the right to 15 days of paid leave for every year of continuous service. An entitlement to leave with pay is normally acquired after a full year of continuous service, with the aggregate also counting up to a maximum of two years.
Sick
Every employee is entitled to one day of sick leave every 45 days, with no need for medical justification; any absence in excess of this, without the professional advice of a doctor, will be deducted from the employee’s annual leave.
Maternity
Female employees must provide a medical document to their employer that details the estimated date of their pregnancy.
Up to fourteen weeks of leave are allowed for employees, at least six of which must be used following imprisonment.
Prenatal leave is prolonged up to the actual date if confinement occurs after the anticipated date.
When a female employee presents a medical certificate to her employer stating the projected date of her confinement and if she has worked for the business for at least six months with no breaks other than duly verified illness, she is eligible to maternity pay benefits. A worker is entitled to half of their usual monthly salary.
Paternity
N/A
Family
Bereavement Leave
An employee who has worked for at least six months straight is entitled to three days of family responsibility leave if any of the following occurs:
– One of the employee’s parents passes away;
– One of the employee’s children passes away;
– The employee’s wife gives birth or passes away; or in the case of a female employee, the husband passes away.
The private sector is covered by this law as well.
National Holidays
During the 8 public holidays, all employees are entitled to a day off, and on all national holidays, they are all entitled to their full pay.
Other Paid Time Off
N/A
STATUTORY EMPLOYEE BENEFITS
Unemployment
There is no unemployment insurance scheme in effect in Somalia at the moment.
Workers Compensation
Somalia presently lacks a government fund or mechanism for workers’ compensation. Yet, a few businesses in Somalia’s private sector do offer their staff their own workers’ compensation insurance coverage.
Social Security
A national social security program or fund is not yet in existence in Somalia.
Retirement
Somalia does not yet have a national pension system or retirement fund. Nonetheless, certain businesses in Somalia’s private sector could provide their own pension schemes or retirement savings options to workers.
Health
A national health insurance scheme or fund is not yet in existence in Somalia. Nonetheless, Somalia does have a few private health insurance companies that may supply both individuals and families with health insurance coverage.
PRIVATE EMPLOYEE BENEFITS
Workers Compensation
A few businesses in Somalia’s private sector do offer their staff their own workers’ compensation insurance coverage.
Retirement
Certain businesses in Somalia’s private sector could provide their own pension schemes or retirement savings options to workers.
Health
Somalia does have a few private health insurance companies that may supply both individuals and families with health insurance coverage.
Insurance
Private life insurance is available in Somalia.
PERSONAL INCOME TAX
Tax Year
Tax year runs from January 1st to December 31st.
Tax Tables
An individual’s chargeable income (other than work income) for a given year of income is subject to tax at a 10% rate.
Payments made to non-residents are subject to a withholding tax of 10% on the total amount due, plus stamp tax of 2.5% on the amount withheld, for an overall effective withholding rate of 12.5%.
Employees are subject to taxes known as employment income tax (payroll tax), which is typically computed at 6% of the total income that firms pay their employees. Monthly payments are required for this tax.
Taxation Method
Somalia uses a proportional taxation system.
Double Taxation
Somalia does not have DTA’s in place as of yet.
Residence Requirements
An individual is classified as a resident individual for a year of income if they
- have a permanent home in Somaliland,
- is present in Somaliland for a period of 183 days or more in any 12-month period that commences or ends during the year of income,
- is an employee or official of the Government of Somaliland posted abroad during the year of income.
Payroll Calendars
Wages are normally paid on the final working day of the month, according to the payroll cycle.
Rebates & Tax Credits
Somalia does not have any significant rebate or tax credit programs in place.
Health Insurance
A national health insurance scheme or fund is not yet in existence in Somalia. Nonetheless, Somalia does have a few private health insurance companies that may supply both individuals and families with health insurance coverage.
Unemployment
There is no provision in the legislation for unemployment insurance or benefits.
Social Security
A national social security program or fund is not yet in existence in Somalia.
PAYROLL ELEMENTS
Income
Somalia Payroll Elements
On their earnings, which include salaries, wages, allowances, bonuses, and other types of income, people are obligated to pay income tax.
The chargeable income of a person for a year of income is equal to that person’s gross income for that year minus all deductions allowed by the Act for that year, subject to Sections 67 and 68.
Bonuses
The 13th salary is not mandatory in Somalia.
Allowances
N/A
Benefits in Kind
Somalia does not have any specific benefits in kind.
Investment Income
10% of a company’s profits in Somalia are subject to corporate income tax. Both domestic and international companies operating in the nation are subject to this rate.
Retirement Funding
Somalia does not yet have a national pension system or retirement fund. Nonetheless, certain businesses in Somalia’s private sector could provide their own pension schemes or retirement savings options to workers.
Health Insurance
A national health insurance scheme or fund is not yet in existence in Somalia. Nonetheless, Somalia does have a few private health insurance companies that may supply both individuals and families with health insurance coverage.
Risk Insurance
N/A
Taxable Income
On their earnings, which include salaries, wages, allowances, bonuses, and other types of income, people are obligated to pay income tax.
The chargeable income of a person for a year of income is equal to that person’s gross income for that year minus all deductions allowed by the Act for that year, subject to Sections 67 and 68.
Allowable Deductions
N/A
PAYROLL TAXES AND EMPLOYER CONTRIBUTIONS
Payroll Taxes
Employees are subject to taxes known as employment income tax (payroll tax), which is typically computed at 6% of the total income that firms pay their employees. This tax has a monthly payment requirement.
Unemployment
There is no provision in the legislation for unemployment insurance or benefits.
Social Security
A national social security program or fund is not yet in existence in Somalia.
Workers Compensation
Somalia presently lacks a government fund or mechanism for workers’ compensation. Yet, a few businesses in Somalia’s private sector do offer their staff their own workers’ compensation insurance coverage.
ADMINISTRATION
Income
An individual’s chargeable income (other than work income) for a given year of income is subject to tax at a 10% rate.
Payments made to non-residents are subject to a withholding tax of 10% on the total amount due, plus stamp tax of 2.5% on the amount withheld, for an overall effective withholding rate of 12.5%.
Employees are subject to taxes known as employment income tax (payroll tax), which is typically computed at 6% of the total income that firms pay their employees. Monthly payments are required for this tax.
Payroll Taxes
Somalia Payroll Taxes
Employees are subject to taxes known as employment income tax (payroll tax), which is typically computed at 6% of the total income that firms pay their employees. This tax has a monthly payment requirement.
Unemployment
There is no provision in the legislation for unemployment insurance or benefits.
Social Security
A national social security program or fund is not yet in existence in Somalia.
Workers Compensation
Somalia presently lacks a government fund or mechanism for workers’ compensation. Yet, a few businesses in Somalia’s private sector do offer their staff their own workers’ compensation insurance coverage.
Statutory Benefits
Somalia has 8 paid public holidays, annual leave, severance pay, mandatory probation period and maternity leave.
Employee Benefits
All employees are entitled to 8 paid public holidays off.
LEGISLATION
Somali Labor Code.
STATUTORY BODIES
- Ministry of Labor and Social Affairs
- National Wages Commission
- Judiciary
