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Hiring in Sierra leone
Sierra Leone, officially known as Sierra Leone, is a country in West Africa. English is the official language and Leone is the official currency. Sierra Leone’s economy is based on subsistence agriculture, whereby it employs over 80% of the country’s labor force. Sierra Leone is rich in minerals such as diamonds. Sierra Leone’s main trading partners are Romania, Netherlands, China, South Korea, Ghana, UAE, US and India. Global PEO or Employer of Record (EOR) play a pivotal role in providing companies with services related to hiring employees, and ensuring compliance with Sierra Leone’s legal and tax regulations. The Labor Code stipulates that employees are entitled to 19 to 28 days of annual leave. Residents are taxed on their worldwide income; non-residents are taxed on Sierra Leone-source income. Global PEO’s or Employer of Record (EOR) facilitate companies by ensuring compliance with Sierra Leone’s Labor Code and tax laws.
statutory labor requirements
Probation Period
- Probation periods of up to six months are permitted.
Annual Leave
- In general, employees are entitled to the following paid annual leave:
- One to five years of employment: 19 days of leave
- Five to 10 years of employment: 22 days of leave
- 10+ years of employment: 28 days of leave
Public Holidays
- New Year's Day (1st January)
- International Women's Day (9th March)
- Good Friday (10th April)
- Easter Monday (13th April)
- Independence Day (27th April)
- Eid al-Fitr
- Eid al-Adha
- Prophet's Birthday
- Christmas Day (25th December)
- Boxing Day (26th December)
Maternity Leave
- Female employees are generally entitled to 12 weeks of paid maternity leave.
Paternity Leave
- There is no mandatory paternity leave
Sick Leave
- In general, employees are eligible for at least five paid sick days per year.
Work Hours
- The Sierra Leone work week is generally 40 hours.
Overtime
- Overtime is paid at an additional 50%
- Work on rest days is paid at an additional 100%.
Severance
- Severance pay is between 30 and 40 days per year served
13th / 14th Month Pay
- No
- There is no statutory requirement to pay the 13th or the 14th month salary.
- There is no evidence that it is customary to give bonuses.
income tax
- Sierra Leone operates a worldwide system of taxation of income and capital gains (with some exceptions), under which resident individuals are taxed on their worldwide income.
- Non-residents are taxed only on Sierra Leone-source income.
- A permanent resident is assessed on income from all sources, less allowable deductions.
- A temporary resident is assessed on income earned outside Sierra Leone and remitted to Sierra Leone, plus the taxpayer’s assessable income within Sierra Leone, less allowable deductions.
- Non-cash benefits granted to an employee by the employer are included in employment income
- Income tax rates are progressive up to 30%.
- For individuals receiving employment income, there is a non-taxable allowance threshold of SLL6 million per year or SLL500 000 per month.
- Nonresidents pay tax at a flat rate of 25%.
|
Taxable income (SLL) per annum |
Taxable income (SLL) per month |
Rate |
|
Less or equal to 6 million |
First 500 000 |
Nil |
|
Next 6 million – 12 million |
Next 500 000 |
15% |
|
Next 12 million – 18 million |
Next 500 000 |
20% |
|
Next 18 million – 24 million |
Next 500 000 |
25% |
|
Above 24 million |
Above 2 million |
30% |
deductible expenses
- A non-taxable allowance threshold of SLL6 million per year or SLL500 000 per month is available
immigration
- Business visa is typically for self-employed individuals who can demonstrate their ability to operate a business in the country.
- Minimum capital requirements are based on the applicant’s business type and sector.
- A work permit is the most common option for employees of foreign companies.
- Foreign nationals from the Economic Community of West African States (ECOWAS) can come and stay in Sierra Leone without a visa. Everyone else needs a tourist visa from the Sierra Leone embassies and consulates in their country of residence.
|
Type of Visa/Permit |
Documentation |
Validity |
Eligibility |
|
Tourist Visa |
|
3 months |
|
|
Business Visa |
|
3 months |
|
|
Work Permit |
|
1 year |
|
value added tax
- Sierra Leone levies a GST instead of VAT.
- GST is a consumption tax applied on most goods and services and taxable imports supplied by registered businesses.
- The amount of GST chargeable is calculated by applying the rate to the GST-exclusive value of the taxable supply or import, as follows:
- If the supply or import is zero-rated: 0%
- If the supply or import is standard rated: 15%.
|
VAT |
|
|
Standard Rate |
15% |
|
Zero Rate |
0% |
withholding tax
- WHT is collected by a registered taxpayer at source.
- Tax collected via withholding must be paid over to the National Revenue Authority (NRA) by the payer of the income by the 15th day of the month following the month in which the tax was withheld.
- If a person is employed to provide construction, transportation, management or any other services, and the payment for these services exceeds SLL500 000 in a month, tax must be deducted at a rate of 5.5% if the individual is a resident and 15% if the individual is a non-resident.
- If goods also are supplied, the WHT applies to the price of the goods.
|
Payment |
Residents |
Non-residents |
|
Dividends |
10% |
10% |
|
Payment to contractors |
5% |
10%/15% |
|
Interest |
15% |
15% |
|
Rental income |
10% |
25% |
|
Royalties |
25% |
25% |
|
Pensions and annuities |
15% |
25% |
|
Natural resources payments |
25% |
25% |
|
Real property |
10% |
|
|
Winnings of SLL500 000 and above |
10% |
|
|
Payments for benefit of non-resident beneficiaries |
25% |
termination
- Employees can be dismissed for just cause, and after two written warnings, they can be dismissed without compensation.
- Severance pay is between 30 and 40 days per year served
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 for individuals is the same as that for companies.
- The income tax return must be submitted within 120 days of the end of the tax year, i.e. by 30 April for a tax year from 1 January to 31 December.
- Employers pay monthly PAYE on the 15th day of the month following the tax period.
- Penalties:
-
- 10% if paid within 30 days from the due date
- 15%% if paid after 30 days but less than 90 days from the due date
- 20% if paid after 90 days but less than 180 days after the due date
- 25% if paid after 180 days from the due date
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 Sierra Leone ranked 163rd 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 % |
Subject to Contract and Collective Bargaining |
| Vacations % | Employees are normally entitled to 20 days of annual holiday leave each year (5.49% 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 13.73% |
employer accruals
Additional information (Country Accruals)
| Social security | 10.00% |
| Description | Public- and private-sector employees.Voluntary coverage for self-employed persons and for persons who previously had mandatory coverage.
|
Employer Accruals Additional information
| Employment Accruals | ||
| Annual Leave | In general, employees are entitled to the following paid annual leave: • One to five years of employment: 19 days of leave • Five to 10 years of employment: 22 days of leave • 10+ years of employment: 28 days of leave |
This equals 5.2% (19/365 days) of annual income |
| Maternity Leave | Female employees are generally entitled to 12 weeks of paid maternity leave. | This equals 23% (12/52 weeks) of annual income |
| Sick Leave | In general, employees are eligible for at least five paid sick days per year. | This equals 1.36% (5/365 days) of annual income |
| Overtime | Overtime is paid at an additional 50%. Work on rest days is paid at an additional 100%. | Depends on the number of overtime hours worked |
| Severance | Severance pay is between 30 and 40 days per year served | This equals 10.9% (40/365 days) of annual income |
| Social Security | The employer and the employee contribute 10% and 5%, respectively, of the employee’s salary to the social security fund. | This equals 10% of annual income |
