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Hiring in Namibia

Namibia, officially known as the Republic of Namibia, is a country in Southwest Africa. Windhoek is the capital and the largest city of Namibia. Namibian Dollar and the South African Rand are the official currencies. The largest economic sectors are mining, agriculture, manufacturing and tourism. Additionally, Namibia has a well-developed banking and finance sector. Namibia’s main trading partners are China, South Africa, Botswana and Belgium. Global PEO or Employer of Record (EOR) play a pivotal role in providing companies with services related to hiring employees, and ensuring compliance with Namibia’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 24 days of annual leave. Individuals are taxed on their Namibian source income only. Global PEO’s or Employer of Record (EOR) facilitate companies by ensuring compliance with Namibia’s Labor Code and tax laws.

statutory labor requirements

Probation Period

  • The initial three months’ employment will be deemed a probationary period during which the Employee's suitability for the position will be monitored and feedback be provided.

Annual Leave

  • According to the country's Labor Act, an employee is entitled to 24 consecutive days of annual leave with full remuneration.

Public Holidays

  1. New Year's Day (1st January)
  2. Namibian Independence Day (21st March)
  3. Good Friday (10th April)
  4. Easter Monday (13th April)
  5. Cassinga Day (4th May)
  6. Ascension Day (21st May)
  7. Africa Day (25th May)
  8. Heroes' Day (in Namibia) (26th August)
  9. Human Rights Day (10th December)
  10. Christmas Day (25th December)
  11. Family Day (26th December)

Maternity Leave

  • According to the country’s Labor Act, after 12 months of continuous service, a female employee is entitled to four weeks of maternity leave in Namibia before the expected date of confinement and at least eight weeks of leave after the date of confinement

Paternity Leave

  • There is no statutory paternity leave.

Sick Leave

  • Five-day per week employees are entitled to 30 working days of sick leave and six-day per week employees are entitled to 36 working days of sick leave, applicable for a sick leave cycle of 36 months and not on an annual basis.

Work Hours

  • In general, the work week should not exceed 45 hours, and overtime should not exceed 10 hours per week.

Overtime

  • Overtime must not exceed 10 hours a week and 3 hours per day. 
  • The employer must pay an employee at a rate of at least one and one-half times (150%) of the employee's hourly basic wage for overtime.

Notice Period

  • In general, employees who have been terminated for just cause are entitled to the following notice periods:
    • less than four weeks’ service: one day’s notice
    • more than four weeks’ service but less than one year: one week’s notice
    • more than one year’s service: one month’s notice

Severance

  • Severance pay must be in an amount equal to at least one week’s remuneration for each year of continuous service with the employer. 
  • The payment of severance pay does not affect an employee’s right to any other amount that the employee is obliged to pay the employee.

13th / 14th Month Pay

  • No
  • There is no statutory requirement to pay the 13th and 14th month salary.
  • Employees at Managerial level are more likely to receive the 13th month.
  • Other employees may receive other type of bonuses such as travel allowances, insurance etc.

income tax

  • Namibia has a source-based tax system, which means that income from a source within Namibia or deemed to be within Namibia will be subject to tax in Namibia, unless a specific exemption is available. 
  • Individuals are taxed on the value of any benefit or advantage arising from employment, as well as on business income and investment income. 
  • There currently is no separate capital gains tax system in Namibia, but income from certain capital transactions is included in gross income and subject to income tax

Taxable income (NAD)

Rate

0 – 50 000

0%

50 001 – 100 000

18%

100 001 – 300 000

9 000 + 25% of amount over 100 000

300 001 – 500 000

59 000 + 28%,of amount

500 001 – 800 000

115 000 + 30% of amount over 500 000

800 001 – 1.5 million

205 000 + 32% of amount over 1.5 million

 

429 000 + 37% of amount over 1.5 million

 deductible expenses

Employment Expenses

  • There are no standard deductions for employees for business expenses. 
  • Travel, entertainment, and motor vehicle expenses are potentially deductible, but the onus is on the employee to prove they were incurred in the production of taxable income. 
  • Where allowances are provided by the employer, this onus is more readily discharged, but the deduction cannot normally exceed the allowance.
  • An employee may deduct contributions of up to NAD 40,000 per annum to an approved pension, retirement annuity, provident, and educational policy fund registered in Namibia.

Personal Deductions

  • Personal and domestic expenses (e.g. mortgage interest) are not deductible.

Deductible Expenses

Employee Expenses

  • Travel, entertainment, and motor vehicle expenses are potentially deductible, but the onus is on the employee to prove they were incurred in the production of taxable income. 
  • Where allowances are provided by the employer, this onus is more readily discharged, but the deduction cannot normally exceed the allowance.
  • An employee may deduct contributions of up to NAD 40,000 per annum to an approved pension, retirement annuity, provident, and educational policy fund registered in Namibia.

Personal Deductions

  • Personal and domestic expenses (e.g. mortgage interest) are not deductible.

immigration

  • Visitors’ visas are issued to foreign nationals who intend to visit Namibia for recreational purposes only and are issued to visitors on arrival in Namibia. 
  • These visas are valid for up to 90 days and can be extended at a cost of NAD470 if the extension application is submitted within 14 days (weekends or holidays excluded) of the expiration date.
  • Business visas are required for individuals who enter Namibia for business purposes. 
  • The business visa is now granted at the airport to individuals from visa-exempt countries, but the individual must be in possession of a confirmed return air ticket.
  • On application, business visas may be granted for multiple reentry. 
  • However, they must be obtained for each entry into the country for business purposes if a multiple re-entry visa was not originally granted. 
  • The documentation required for a business visa consists of a copy of the passport (showing date of issuance, date of expiration and passport number), a completed visa form and a motivation letter (references from the employer) on a company’s letterhead.
  • Work permits are issued to foreign nationals who intend to undertake employment in Namibia and are valid for a period approved by the Ministry of Home Affairs. 
  • The cost for a 12-month work permit is NAD2,500. 
  • In addition, a handling fee of NAD80 is charged on all applications. 
  • The cost for a 24-month work permit is NAD5,000. 
  • In addition, a handling fee of NAD80 is charged on all applications. 
  • The multiple-entry visa allows an individual to enter and leave Namibia as he or she desires.
  • Applicants may not begin work until they are in possession of valid work permits. 
  • Work permits must be renewed three months before their expiration dates. 
  • They are valid only for the employment detailed in the application and are not transferable if the holder changes employment. 
  • A Change of Conditions permit must be obtained in these circumstances.

Type of Visa/Permit

Documentation

Validity

Eligibility

Visitor Visa

  • Valid passport
  • Completed application form
  • Copy of the passport

90 days

  • Visitors’ visas are issued to foreign nationals who intend to visit Namibia for recreational purposes only

Business Visa

  • Valid passport
  • Copy of the passport
  • A completed visa application form
  • Motivation letter (references from the employer)

90 days

  • Business visas are required for individuals who enter Namibia for business purposes. 

Work Permit

  • An application for a temporary work permit completed by the applicant
  • Application for visa (for purpose of multiple re-entry)
  • Motivation letter on the company’s letterhead that indicates why the applicant’s skills are required 
  • Work references from previous employers 
  • A copy of a marriage or divorce certificate, if applicable 
  • A copy of the applicant’s passport (showing date of issue, date of expiration and passport number) and two photographs
  • Copies of a diploma indicative of higher education or special training
  • Completed standard medical certificate and radiological report forms obtained from the Ministry of Home Affairs 
  • Police clearance certificates from the country of origin and most recent countries where the applicant was previously employed 
  • A deed of surety completed by the employer promising to reimburse the government of Namibia for all expenses and costs incurred for the repatriation or deportation of the applicant
  • Proof of advertisement of the position in two local newspapers for two weeks
  • Trade union letter (if applicable) 
  • A minimum of three CVs from applicants for the position

12 months;

24 months                                                                                                                                                                                                                                       

  • Work permits are issued to foreign nationals who intend to undertake employment in Namibia

  value added tax

  • VAT is a transaction tax, and the implications will vary for different transactions. 
  • Some transactions are taxed at a rate of 15% or 0% while other transactions are exempt from VAT.

VAT

Standard Rate

15%

Zero Rate

0%

withholding tax

The WHT rates on various types of payments are as follows (the same rates apply to payments to non-resident companies and non-resident individuals, and may be reduced under an applicable tax treaty):

Payment

Rate

Dividends

10%/20%

Interest

10%

Royalties

10%

Directors’ fees

25%

Service fees

10%

termination

  • Under the Labor Act, 2007, there is termination of employment through notice, termination through payment instead of notice and automatic termination of the employment contract.
  • For termination of employment contract on notice whether by employer or employee, the period of notice cannot be less than one day if the employee has been employed in the establishment for four weeks or less. 
  • If the employee has been employed for more than four weeks but not more than one year, the period of notice should not be less than one week. 
  • Where the employee has been employed for than one year, the notice period should be of at least one month.
  • Payment in lieu of notice is allowed. 
  • Instead of giving notice, the employer can pay the employee the remuneration the employee would have received, if the employee had worked during the period of notice. 
  • Similarly, an employee can pay the employer the remuneration the employer would have paid, if the employee had worked during the period of notice and terminate the employment contract immediately.
  • An employment contract terminates automatically one month after the death or sequestration of the employer or shut down of the business. 
  • However, the employment may continue on a for a longer period as provided in the employment contract/collective agreement, or during the duration where the employer continues to carry on business.

statutory benefits

  • These are mandatory benefits as postulated by law
  • These include probationary period, annual leave, public holidays, sick 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

Sick Leave

Overtime Pay

Notice Period

Severance Pay

Social Security Benefits

 payments and invoicing 

  • The tax year of assessments for natural persons runs from 1 March to 28 February. 
  • Namibia has a system of self-assessment, which must include a computation of the taxpayer's taxable income and tax payable, and the payment of tax due on the income so computed.
  • Husbands and wives submit separate tax returns and are taxed separately.
  • The income tax return for salaried individuals is due on 30 June and for farmers and business individuals on 30 September. 
  • Pay-as-you-earn (PAYE) tax is withheld from an employee's salary by the employer and must be remitted to the revenue authorities by the 20th day of the month following the payroll deductions. 
  • Any individual who earns taxable income in excess of NAD 5,000 that is not subject to PAYE (e.g. interest or profit from trade) is required to register as a provisional taxpayer.

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 Namibia ranked 104th 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 to 1 week of pay after one year of service (1.37% of annual salary)

Vacations % Employees are normally entitled to 20 days of annual holiday leave each year (5.49% of annual salary)
Notice %
Employees are entitled to a 1 month of notice period for one year of service or more (8.33%)
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 15.19%

 

 employer accruals

Additional information (Country Accruals)

   
Social security 3.00%
Maternity 12 weeks
Description Namibia has a limited social security system. The Maternity Leave, Sick Leave, and Death Benefit Fund are compulsory for all employees. It is funded by employer and employee contributions of 0.9% of the basic salary, with a maximum contribution of NAD 81 per month each (i.e. the total monthly contribution of both the employer and the employee will amount to NAD 162)

 

Employer Accruals Additional information

    Employment Accruals
Annual Leave According to the country's Labor Act, an employee is entitled to 24 consecutive days of annual leave with full remuneration. This equals 6.57% (24/365 days) of annual income
Maternity Leave According to the country’s Labor Act, after 12 months of continuous service, a female employee is entitled to four weeks of maternity leave in Namibia before the expected date of confinement and at least eight weeks of leave after the date of confinement. This equals 23% (12/52 weeks) of annual income
Sick Leave Five-day per week employees are entitled to 30 working days of sick leave and six-day per week employees are entitled to 36 working days of sick leave, applicable for a sick leave cycle of 36 months and not on an annual basis. This equals 8.22% (30/365 days) of annual income
Overtime Overtime must not exceed 10 hours a week and 3 hours per day.
The employer must pay an employee at a rate of at least one and one-half times (150%) of the employee's hourly basic wage for overtime.
Overtime is paid at an additional 54 NAD
Severance Severance pay must be in an amount equal to at least one week’s remuneration for each year of continuous service with the employer. This equals 1.92% (1/52 weeks) of annual income
Social Security Namibia has a limited social security system.
The Maternity Leave, Sick Leave, and Death Benefit Fund are compulsory for all employees.
It is funded by employer and employee contributions of 0.9% of the basic salary, with a maximum contribution of NAD 81 per month each (i.e. the total monthly contribution of both the employer and the employee will amount to NAD 162).
This equals 0.9% of annual income

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