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Hiring in Liberia

Liberia, officially known as the Republic of Liberia, is a country in West Africa. Monrovia is the capital and the largest city of Liberia. Liberia is a low income country that relies on foreign aid. Agriculture and mining are some of the major sectors of Liberia’s economy. Liberia’s main trading partners are China, United States, European Union and the Ivory Coast. Global PEO or Employer of Record (EOR) play a pivotal role in providing companies with services related to hiring employees, and ensuring compliance with Liberia’s legal and tax regulations. Employment regulations including probation, holidays and termination are covered by the Labor Code. Labor Code stipulates that employees are entitled to 2 weeks of annual leave. Residents are taxed on a worldwide basis. Non-residents are taxed on their Liberian-sourced income. Global PEO’s or Employer of Record (EOR) facilitate companies by ensuring compliance with Liberia’s Labor Code and tax laws.

statutory labor requirements

Probation Period

  • Under Liberian employment law, probationary periods may not be less than 1 month and cannot exceed 3 months.

Annual Leave

  • Workers who have been with the same employer for 3 years are entitled to 2 weeks leave (by number of working days), increasing to 3 weeks for 4 years of service. 
  • Employees in 5 years of service with the same employer are entitled to 4 weeks leave.

Public Holidays

  1. New Year's Day (1st January)
  2. Armed Forces Day (11th February)
  3. National Decoration Day (11th March)
  4. Joseph Jenkins Roberts' Birthday (16th March)
  5. Fast and Prayer Day (10th April)
  6. National Unification Day (14th May)
  7. Independence Day (27th July)
  8. National Flag Day (24th August)
  9. Thanksgiving (5th November)
  10. William V.S. Tubman's Birthday (30th November)
  11. Christmas Day (25th December)

Maternity Leave

  • Female employees are entitled to 14 weeks of paid maternity leave

Paternity Leave

  • Fathers are entitled to 5 days of unpaid paternity leave

Sick Leave

  • Liberia does not have guaranteed sick leave.

Work Hours

  • Working hours cannot exceed more than 8 hours per day or 48 hours a week. 
  • Employees are also entitled to an uninterrupted period of 24 hours’ rest per week.

Overtime

  • Hours worked in excess of the normal working hours shall be considered overtime. 
  • The rate of compensation for overtime should not be less than one and one-quarter times the basic wage per hour.

Notice Period

  • An employer may terminate the employment contract provided he or she gives at least 2 weeks written notice (casual employee) or 4 weeks (salaried employee). 
  • Compensation in lieu of notice may be given.

Severance

  • Unless guilty of a gross breach of misconduct, employees are entitled only to severance payments equivalent to their remaining wages due.
  • Employees may also be entitled to redundancy/severance payments in cases where the company is bankrupt, in liquidation etc.

13th / 14th Month Pay

  • No
  • There is no statutory requirement to pay the 13th or the 14th month salary.
  • There is no evidence that bonuses are customary, however government employees are more likely to receive benefits.

income tax

  • Liberian residents are taxed on a worldwide basis. 
  • Individuals resident in Liberia must pay tax on their employment income, regardless of where the services are performed or the employer is located. 
  • Non-residents are only subject to tax on their Liberian-sourced income.
  • Individuals are subject to Liberian personal income tax on income from the following categories:
    • Income from business and self-employment
    • Income from employment
    • Income from capital gains
    • Dividends, interest, royalties
    • Non-cash benefits
  • Non-residents are taxed at 15%
  • Residents are taxed at the following rates

Taxable Income

Rate (%)

0 - LIB 70,000

0

LIB 70,001 - 200,000

5

LIB 200,001 - 800,000

LIB 6500 + 15%

Above LIB 800,001

LIB 96,500 + 25%

deductible expenses

Business Deductions

  • A taxpayer is permitted a deduction for the ordinary expenses of producing income during the tax year. 
  • Such expenses include among others; depreciation expense or amortization of capital, losses incurred in a business and sustained during the tax year, business interest on business indebtedness etc.

Deductible Expenses

  • A taxpayer is permitted a deduction for the ordinary expenses of producing income during the tax year. 
  • Such expenses include among others; depreciation expense or amortization of capital, losses incurred in a business and sustained during the tax year, business interest on business indebtedness etc.

immigration

  • Persons from countries other than ECOWAS (Economic Community of Western African States) are required to obtain a visa to enter Liberia. 
  • The most common types of visas that the Liberian government issues include:
    • Tourist visas
    • Business visas
    • Diplomatic and official visas 
  • Foreign nationals who intend to work in Liberia will typically need to submit the following documents during the visa application process:
    • A passport with at least one blank page and six months of validity
    • Two recent passport photographs
    • A signed and completed visa application form
    • Proof of medical insurance for the duration of the applicant’s stay in Liberia
    • Evidence of sufficient financial means
    • Proof of accommodations for travel, such as a flight itinerary
    • Proof of accommodations in Liberia
    • A certificate of immunization against yellow fever
    • A letter containing information about the applicant’s employment contract with a business in Liberia, which should be signed by a representative of the company
  • Employees will also need a Liberian work permit. 
  • The requirements for the permit include:
    • A completed application form
    • An employment offer from a company in Liberia
    • A cover letter from the applicant’s employer
    • Two passport photos
    • A bank statement from the employer
    • A background check from the applicant’s country of residence
    • Professional qualifications 

Type of Visa/Permit

Documentation

Validity

Eligibility

Business Visa

  • A passport with at least one blank page and six months of validity
  • Two recent passport photographs
  • A signed and completed visa application form
  • Proof of medical insurance for the duration of the applicant’s stay in Liberia
  • Evidence of sufficient financial means
  • Proof of accommodations for travel, such as a flight itinerary
  • Proof of accommodations in Liberia
  • A certificate of immunization against yellow fever
  • A letter containing information about the applicant’s employment contract with a business in Liberia, which should be signed by a representative of the company

Single entry:3 months


Multiple entry:

     

- 1 year; 2 years;

3 years                                                                                                                                                                                                                                                                                                                                                                                                                               

  • Foreigners who wish to visit Liberia for business purposes must apply for a Business Visa

Work Permit

  • A completed application form
  • An employment offer from a company in Liberia
  • A cover letter from the applicant’s employer
  • Two passport photos
  • A bank statement from the employer
  • A background check from the applicant’s country of residence
  • Professional qualifications 

1 year

  • Foreigners intending to work in Liberia must aply for a work permit

 value added tax

  • GST is imposed on the supply of taxable goods and services in Liberia. 
  • Taxable persons charge GST on their taxable supplies (output tax) and are charged with GST on goods which they receive (input tax).
  • The current standard rate of GST imposed on taxable goods and services is 7%.

VAT

Standard Rate

7%

Zero Rate

0%

withholding tax

  • Liberia imposes withholding taxes (WHT) on payments made to both resident (R) and non-resident (NR) companies on certain classes of income earned
  • The withholding tax rates are as follows

WHT

Dividends

15%

Royalties

15%

Interest

15%

Natural resource payments

15%

Rental income

10%/15%

Management and consultancy fees

15%

Contract services

10%/15%

termination

  • An employee may be dismissed if he or she is guilty of a “gross breach of duty” or a “total lack of capability to perform”.
  • Examples of “gross breach of duty” include:
    • Unprovoked assault on the employer
    • Persistent disregard for safety measures imposed by the employer
    • Disclosure of company working secrets
  • An employer may terminate the employment contract provided he or she gives at least 2 weeks written notice (casual employee) or 4 weeks (salaried employee). 
  • Compensation in lieu of notice may be given. 
  • However, employees guilty of a gross breach of duty may be terminated without notice or severance pay

 statutory benefits

  • These are mandatory benefits as postulated by law
  • These include probationary period, annual leave, public holidays, paternity leave, maternity leave, overtime pay, notice period, and severance pay
  • Statutory benefits also include social security benefits

Statutory Benefits

Probationary Period

Annual Leave

Public Holidays

Maternity Leave

Paternity Leave

Notice Period

Severance Pay

Social Security Benefits

payments and invoicing

  • The Liberia Revenue Authority (LRA), in charge of administering revenues in Liberia.
  • The tax year for both individuals and partnerships is the calendar year (January 1 to December 31).
  • The employer deducts the tax and pays it to the Bureau of Internal Revenue (BIR) by the 10th day of the month following the month in which the deduction was or should have been made.

ease of doing business

  • The ease of doing business index is an index created by Simeon Djankov, an economist at the Central and Eastern Europe sector of the World Bank Group.
  • Higher rankings (a low numerical value) indicate better, usually simpler, regulations for businesses and stronger protections of property rights.
  • According to the World Bank Liberia ranked 175th in the World in 2019 in terms of ease of doing business.

employee accruals

   
Christmas Bonus%

0%

Christmas Bonus Over Vacations %

0%

Severance per Year %

This is equivalent to remaining wages to be paid.

Vacations % Workers who have been with the same employer for 3 years are entitled to 2 weeks leave (2.74% of annual salary)
Notice %

Employees are entitled to 30 days of notice period for one year of service or more (5.49%)

Christmas Bonus Over Notifications% 0%
Vacations Plus% 0%
Total percentage of Salary (yearly) The total employment accruals as a percentage of salary per anum are equal to 8.23%

employer accruals

Additional information (Country Accruals)

   
Social security 3.00%
Description Employers are required to pay 3% of an employee’s monthly gross remuneration towards social insurance and 1.75% towards workmen compensation. For more details, please refer to the section on Employment.

Employer Accruals Additional information

    Employment Accruals
Annual Leave Workers who have been with the same employer for 3 years are entitled to 2 weeks leave (by number of working days), increasing to 3 weeks for 4 years of service. This equals 3.84% (2/52 weeks) of annual income
Maternity Leave Female employees are entitled to 14 weeks of paid maternity leave This equals 26.9% (14/52 weeks) of annual income
Overtime The rate of compensation for overtime should not be less than one and one-quarter times the basic wage per hour Depends on the number of overtime hours worked
Social Security Employers are required to pay 3% of an employee’s monthly gross remuneration towards social insurance and 1.75% towards workmen compensation. This equals 4.75% of annual income

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