Hire Employees in Papua New Guinea

Two routes exist. Registering a PNG entity through the Investment Promotion Authority, registering as a group employer with the Internal Revenue Commission and enrolling with a superannuation fund typically takes two to four months.

An Employer of Record compresses that to two to four weeks. The EOR is the legal employer in PNG, runs fortnightly or monthly payroll, withholds Salary or Wages Tax and remits superannuation where applicable, while day-to-day direction stays with you.

One consequence of the EOR route is worth understanding. Superannuation obligations attach to the employer of record’s own headcount, not to yours, so a single hire placed with an established EOR will typically attract superannuation even though the same hire made directly might not.

Papua New Guinea does not have a social security system. The only mandatory employer contribution is superannuation, and that applies only to employers of 15 or more persons. Certain agricultural sectors are exempt entirely. Below 15 employees, contributions are optional, though some smaller firms opt in to compete for talent.

The 15-employee threshold carries an explicit anti-fragmentation rule. Nasfund treats related corporations as a single employer where their combined headcount exceeds 15 and the operations were conducted through separate legal entities for the purpose of keeping each below the line. Branches and departments in different locations are likewise treated as one employer.

PNG is a relatively high-cost hiring environment by regional standards, driven by a resource-focused economy, geographic dispersion and a limited pool of specialist talent. Sectoral agreements in mining, LNG and banking routinely exceed statutory minimums with enhanced premiums and rotational rosters.

Break-even rule of thumb: EOR fees begin to exceed the running cost of a PNG entity somewhere between 15 and 20 employees, close to the point at which superannuation becomes compulsory anyway. Model both, see EOR vs Entity for the framework.

Superannuation is 8.4% from the employer and 6% from the employee. The two main funds are Nasfund for the private sector and Nambawan Super for public servants, and employees may choose any authorised fund. Employers may contribute above the 8.4% minimum.

The base is narrower than gross pay. Contributions are calculated on gross basic salary, excluding overtime, bonus and commission. One provider states that overtime is treated as ordinary wages for superannuation purposes, which conflicts with the position set out by PwC; the narrower base is the better-supported reading, so confirm with your fund before including premium pay.

The two contributions are taxed differently. The employer’s 8.4% is a pre-tax contribution; the employee’s 6% is deducted after tax. Employer superannuation is exempt income for Salary or Wages Tax purposes up to 15% of the employee’s fully taxable salary, so voluntary contributions between 8.4% and 15% remain tax-free to the employee.

One current provider publishes 10% employer and 5% employee. Both figures are wrong, the funds themselves, PwC and every other source give 8.4% and 6%.

Membership is compulsory for PNG citizens working more than 59 days in any three-month period, and voluntary for non-citizens. Workers compensation cover is a separate employer cost, priced by industry risk.

Gross annual salaries in PNG kina. Superannuation applies only at 15 or more employees and on basic salary rather than total pay.

Benchmarks below are gross annual salaries in PNG kina. Superannuation applies only at 15 or more employees and is calculated on basic salary excluding overtime, bonus and commission, a narrower base than most markets.

Payroll runs fortnightly or monthly. Salary or Wages Tax is assessed on a fortnightly basis, using the IRC deduction tables rather than an annual calculation, which is unusual and means the fortnightly figure is the statutory unit rather than a convenience.

The IRC applies three different columns depending on the employee’s status: declaration lodged, which gives the resident rates plus the dependant rebate; no declaration, which applies a higher rate from the first kina; and non-resident. Collecting the declaration at onboarding therefore has an immediate cash effect for the employee.

A new SWT schedule took effect on 1 January 2026 under the Income Tax (Salary and Wages Tax) (Rates) (Amendment) Act 2025. The tax-free threshold is PGK 20,000 a year, equivalent to PGK 769.23 a fortnight, with the top marginal rate of 42% applying above PGK 250,000. Note that one provider publishes the threshold as PGK 12,500 and another gives rates starting at 22%; neither matches the current schedule.

Deadlines differ between the two obligations. SWT is remitted by the 7th of the month following the payroll month and superannuation by the 14th. One provider states the 21st for both; treat the earlier dates as the deadlines and confirm with the IRC and your fund.

Register as a group employer with the IRC within seven days of making a salary payment above the prescribed threshold, and notify the IRC of each new hire within 21 days of their start date. A 25% rebate for employment-related expenses is available, and employees may apply to the IRC to vary their SWT deductions against anticipated deductible expenses.

The annual equivalents below apply from 1 January 2026. Tax is assessed fortnightly using the IRC deduction tables, with a separate column for employees who have not lodged a declaration.

The Employment Act 1978 is the governing statute, supported by the Superannuation (General Provisions) Act 2000 and the Income Tax Act.

The minimum wage rose to PGK 5.00 an hour on 1 January 2026 under a Minimum Wages Board determination, up from PGK 3.50, a rise of more than 40% and the first change since 2014. It applies to all private-sector employment covered by the Act. Youth workers, domestic workers in private households and certain agricultural piecework arrangements sit outside the standard regime.

There are no industry-specific statutory rates: PNG operates a single national minimum, though collective agreements in mining, LNG and banking routinely exceed it.

Probation is a genuine legal risk here. Private-sector labour law does not regulate probationary periods, so a probation clause may not be enforceable as a basis for termination. Do not rely on one without local advice.

Written contracts are standard and should record pay, hours, leave and termination terms. Note that PNG law does not explicitly require payslips, though issuing them is best practice.

Collect the IRC declaration at onboarding. Without it the employee is taxed at the higher no-declaration rate from the first kina and loses the dependant rebate.

Notify the IRC of the new hire within 21 days of the start date, and register the employee with an authorised superannuation fund where the 15-employee threshold applies. Late fund registration brings back-payment obligations and fines.

The standard working week is 44 hours. Overtime, night work and public holiday premiums apply under the Employment Act and any collective agreement.

Overtime is liable to Salary or Wages Tax but sits outside the superannuation base, which is calculated on basic salary excluding overtime, bonus and commission. One provider states the opposite for superannuation; confirm with your fund.

Mining and LNG operations commonly run rotational rosters under collective agreements that override the statutory position.

Papua New Guinea observes 11 public holidays in 2026 under the Employment Act 1978.

Papua New Guinea observes 11 public holidays in 2026 under the Employment Act 1978. Dates that fall at a weekend and any substitution rules are set out below; entitlement is separate from annual leave.

There is no social security system, so superannuation is the whole of the statutory retirement provision. Nasfund was established in 2002 as successor to the National Provident Fund and is the largest private sector fund.

Statutory leave is two weeks of annual leave per year of service and ten days of sick leave a year, with a medical certificate required for absences longer than two days.

Superannuation withdrawals are taxed at concessional rates in defined cases. 2% where the member has permanent disability or on payment to a dependant of a deceased member, and 2% where contributions have run at least seven years and the member is 50 or over or subject to enforced early retirement. The 2026 Budget went further and exempted the 2% entirely for long-serving retirees with 15 or more years of contributions, making those withdrawals tax-free.

School fees paid directly to an educational institution for an employee’s child, and annual leave fares to the place of origin or recruitment, are exempt income for SWT purposes.

Termination follows the Employment Act 1978, with notice requirements scaling by length of service.

Do not rely on a probation clause. Because private-sector law does not regulate probation, a clause purporting to allow termination on that basis may be unenforceable.

Final pay including accrued leave is due on separation. Long service leave accrued to 31 December 1992 receives concessional treatment on termination where the employee has at least six years of continuous service.

Failure to have contributed superannuation surfaces at termination, since the fund balance is visible to the employee, and enforcement under the 2000 Act carries fines reported up to PGK 500,000 or imprisonment.

Foreign nationals need a work permit and employment visa, both employer-sponsored.

Superannuation is voluntary rather than compulsory for non-citizens, which materially changes the cost of an expatriate hire against a local one at the same salary.

Compulsory membership for PNG citizens attaches after more than 59 days of work in any three-month period, so short engagements can fall outside it.

The 15-employee superannuation threshold is the pivotal number, and it cannot be engineered around. Related corporations are treated as a single employer where combined headcount exceeds 15 and the structure was arranged to keep each entity below the line. Branches in different locations count as one employer.

Published contribution and tax figures are frequently wrong. One provider gives superannuation as 10% employer and 5% employee; another gives the tax-free threshold as PGK 12,500 against the actual PGK 20,000; a third gives SWT rates starting at 22%. One page states the minimum wage as both PGK 5.00 and PGK 3.50.

A probation clause may be unenforceable. Private-sector labour law does not regulate probation, so relying on one to terminate is a live risk.

Note also that the superannuation base excludes overtime, bonus and commission despite one provider saying otherwise; that SWT is due by the 7th and superannuation by the 14th; and that superannuation non-payment carries fines reported up to PGK 500,000 or imprisonment.

Work backwards from the start date. An EOR hire takes two to four weeks; entity formation runs two to four months across IPA registration, IRC group employer registration and fund enrolment.

Establish your headcount position first. At 15 or more employees superannuation is compulsory, and the aggregation rule means group structures are counted together.

Collect the IRC declaration at onboarding so the employee is not taxed at the no-declaration rate, apply the PGK 5.00 hourly minimum in force since January 2026, load the new SWT schedule, and set two deadlines. SWT by the 7th and superannuation by the 14th.