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Hiring in Chad
Chad, officially known as the Republic of Chad, is a country in north-central Africa. Arabic and French are the official languages of Chad. It is a low income country, whereby agriculture is the main sector of Chad. Chad’s main trading partners are Cameroon and France. Global PEO or Employer of Record (EOR) play a pivotal role in providing companies with services related to hiring employees, and ensuring compliance with Chad’s legal and tax regulations. Employment regulations including probation, holidays and termination are covered by the labor code. The labor code stipulates that employees are generally entitled to 24 days of paid annual leave. An individual with residence in Chad is subject to personal income tax (PIT) on worldwide income. A non-resident individual in Chad is subject to PIT on the income stemming from activities in Chad. Global PEOs facilitate companies by ensuring compliance with Chad’s Labor Code and tax laws.
statutory labor requirements
Probation Period
- Probationary periods should not exceed 3 months.
Annual Leave
- Employees are generally entitled to 24 days of paid annual leave.
- Those with 10+ years of service are entitled to 26 days of paid leave.
Public Holidays
- New Year's Day (1st January)
- Easter Monday (13th April)
- Labor Day (1st May)
- Eid al-Fitr
- Eid al-Adha
- Independence Day (11th August)
- Prophet's Birthday
- All Saints' Day (1st November)
- Republic Day (28th November)
- Freedom and Democracy Day (1st December)
- Christmas Day (25th December)
Maternity Leave
- Female employees are generally entitled to 14 weeks of paid maternity leave, through social security benefits.
Paternity Leave
- Fathers are generally eligible for 2 weeks of employer-paid paternity leave.
Sick Leave
- Employees are generally entitled to at least 5 paid sick days per year.
Work Hours
- The legal employment's duration is 39 hours per week
- A rest day per week is mandatory (generally on Sundays)
Overtime
- Overtime is paid at 10% of standard hourly pay
Notice Period
- In cases of redundancy, employees who have worked for at least 5 years are generally eligible to receive 8.67 weeks of notice
Severance
- In cases of redundancy, employees who have worked for at least 5 years are generally eligible to receive 5.42 weeks of severance pay.
- Those with 10 years of service are eligible for 11.9 weeks of severance pay.
13th / 14th Month Pay
- No
- There is no evidence that there is a statutory requirement to pay the 13th or 14th month salary.
- The labour code is often not enforced and there are several instances of employees being underpaid or paid late.
- Employees are entitled to annual leave and any bonus is generally negotiated through collective agreement, the government does interfere occasionally.
income tax
- An individual with residence in Chad is subject to personal income tax (PIT) on worldwide income.
- A non-resident individual in Chad is subject to PIT on the income stemming from activities in Chad.
- The taxable income is made up of work incomes and capital incomes.
- The work incomes (salaries, wages, benefits, emoluments and life annuities, industrial and commercial incomes, agricultural incomes, non-commercial incomes and remuneration of main managers of limited liability companies and limited partnerships and other similar income) are taxed according to the following progressive rates, after deduction of non-taxable allowances (transport, representative fees, social security contributions at rate of 3.5%, etc.):
|
Work Incomes (XAF) |
Rates (%) |
|
0 to 800,000 |
0 |
|
800,001 to 2,500,000 |
10 |
|
2,500,001 to 7,500,000 |
20 |
|
Above 7,500,000 |
30 |
deductible expenses
Employment Expenses
- The following expenses are deductible from employment income for Chad PIT purposes:
- Certain payments made by the employer for pension and retirement purposes, limited to 2% of the employee's gross salary.
- The employee's social security contributions
Personal Deductions
- The following charges are particularly deductible from total income where they are not already included in the calculation of each category of tax:
- Interest on loans and debts incurred by the taxpayer for real estate investment.
- Arrears of compulsory or free annuities paid; such arrears may be deductible from the total income of taxpayers up to a sum of XAF 600,000 annually.
- No supporting documents are required for payments within this ceiling.
- The alimony paid under a court decision in cases of separation or divorce.
- The insurance premiums are deductible from taxable profits for the part incumbent upon the transactions made in Chad:
- the insurance premiums incurred on behalf of the company if the risk materializes and leads directly and automatically (on their own) to a decrease in net assets
- the insurance premiums by themselves constitute an operating expense, and
- the health insurance premiums paid to local insurance companies for the benefit of local staff when the reimbursements of expenses for the benefit of the same persons do not appear in the deductible charges.
|
Deductible Expenses |
|
|
Employment Expenses |
|
|
Personal Deductions |
|
immigration
- All visitors other than nationals from CEMAC and the Community of Sahel-Saharan States (Communauté des Etats SahéloSahariens, or CEN-SAD) must obtain visas to enter Chad.
- A resident permit is mandatory for all visitors, including those from CEMAC and CEN-SAD countries, after a stay of three consecutive months in Chad.
- The resident permit expires one year after its delivery date.
- Visas are obtained from the Chadian embassy or from the Emigration and Immigration Directorate (Direction de l’Emigration et l’Immigration) for visitors from areas that do not have a Chadian embassy.
- Foreign nationals wishing to visit Chad should confirm the entry requirements before departing from their home countries.
- Temporary visas are usually granted without delay.
- They are issued for a maximum period of three months and are not renewable.
- A foreign national wishing to stay in Chad for longer than three months must obtain a long-stay visa.
- Ordinary or single-entry visa is issued to visitors, including tourists, making single trips to Chad for a maximum of three months.
- A fee of approximately USD100 is payable on application.
- Multiple-entry visa, is issued to foreign nationals, such as businesspersons, expecting to make several trips to Chad.
- The multiple-entry visa may be a short-term visa with a maximum stay of three months in Chad or a long-term visa with a maximum of one year in practice.
- A fee of USD100 is payable on application
- Work permits must be obtained before beginning work in Chad.
- Employers obtain the permits on behalf of foreign workers.
- Only one type of work permit is available in Chad.
- Employers are required to justify employing a foreign national instead of a Chadian.
- If the foreign national changes employment, his or her new employer is responsible for obtaining a new work permit.
- A foreign national wishing to carry out business in Chad must make a declaration to the immigration authorities before the startup of the business.
- In some limited cases, a foreign national must obtain required licenses and registrations and must have sufficient capital or resources for investment.
|
Type of Visa/Permit |
Documentation |
Validity |
Eligibility |
|
Ordinary or single entry visa |
|
3 months |
|
|
Multiple-entry visa |
|
3 months to 12 months |
|
|
Work Permit |
|
varies |
|
value added tax
- The standard value-added tax (VAT) rate in Chad is 18% applicable on all taxable operations and 0% applicable on exports and their related international transportations.
- The VAT law provides a list of transactions exempted from VAT that includes the following:
- Sales of products that are directly made by farmers, cattle farmers, or fishermen to consumers, farming, and fishing operations.
- Imports operations and sales of newspapers and periodicals, other than the advertising revenues.
|
VAT |
|
|
Standard Rate |
18% |
|
Zero Rate |
0% |
withholding tax
The WHT on various types of payments are as follows (the tax is a final tax for non-residents):
|
Payment |
Residents |
Non-residents |
|
Dividends |
20% |
20% |
|
Interest |
20% |
25% |
|
Royalties |
- |
25% |
|
Rents |
15% |
20% |
|
Services provided by nonresidents |
- |
12.5%/25% |
|
Other |
- |
20% |
termination
- In cases of redundancy, employees who have worked for at least 5 years are generally eligible to receive 8.67 weeks of notice
- In cases of redundancy, employees who have worked for at least 5 years are generally eligible to receive 5.42 weeks of severance pay.
- Those with 10 years of service are eligible for 11.9 weeks of severance pay.
statutory benefits
- These are mandatory benefits as postulated by law
- These include probationary period, annual leave, public holidays, sick leave, maternity leave, paternity 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 |
|
Sick Leave |
|
Overtime Pay |
|
Notice Period |
|
Severance Pay |
|
Social Security Benefits |
payments and invoicing
- The tax year in Chad is the calendar year.
- Married taxpayers are generally required to file a joint income tax return stating their worldwide income.
- Prior to 1 January of each year, each employee must deposit, by using forms provided by the tax authorities, an individual declaration of all income received during the past year.
- In addition to one's salaries, the employee (and family members, if applicable) must declare all income from property, movable assets, services rendered, etc.
- Employers withhold payroll taxes from employees' salaries each month and pay the corresponding amount of tax to the Treasury.
- The taxpayer must pay additional taxes if the instalment payments (WHTs on employment income or other income) are insufficient to cover the amount of tax due
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 Chad ranked 182nd 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 % |
Employees are entitled to severance pay that equals 25% of monthly salary after completion of 2 years of service (2.08% of annual salary) |
| Vacations % | Employees are generally entitled to 24 days of paid annual leave (6.59% of annual salary) |
| Notice % |
Employees are entitled to 30 days of notice period for one year of service or more (8.24%) |
| 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 17% |
employer accruals
Additional information (Country Accruals)
| Monthly employer salary limit XAF |
500,000 |
| Social Security |
16.50% |
| Maternity leave |
14 weeks |
| Description |
Social security contributions in Chad are due both by the employer and the employee. Employer contributions are 16.5% of the gross salary limited to XAF 500,000 per month (XAF 82,500 upper limit). Employee contributions are 3.5% of the gross salary limited to XAF 500,000 per month (XAF 17,500 upper limit). The social security contributions due by the employee are deductible from taxable income and are withheld by the employer on a monthly basis. |
Employer Accruals Additional information
| Employment Accruals | ||
| Annual Leave | Employees are generally entitled to 24 days of paid annual leave. | This equals 6.5% (24/365 days) of annual income |
| Maternity Leave | Female employees are generally entitled to 14 weeks of paid maternity leave, through social security benefits. | This equals 26.9% (14/52 weeks) of annual income |
| Paternity Leave | Fathers are generally eligible for 2 weeks of employer-paid paternity leave. | This equals 3.8% (2/52 weeks) of annual income |
| Sick Leave | Employees are generally entitled to at least 5 paid sick days per year. | This equals 1.36% (5/365 days) of annual income |
| Overtime | Overtime is paid at 10% of standard hourly pay | Normal hourly rate is around 3,044 XAF. Overtime is paid at an additional 304.4 XAF. |
| Severance | In cases of redundancy, employees who have worked for at least 5 years are generally eligible to receive 5.42 weeks of severance pay. | This equals 10.38% (5.42/52 weeks) of annual income |
| Social Security | Employer contributions are 16.5% of the gross salary limited to XAF 500,000 per month (XAF 82,500 upper limit). | This equals 16.5% of annual income |
