Namibia has become a desirable location for foreign businesses to establish operations. It offers political stability, a strong regulatory environment, and a relatively low cost of hiring. English is the official language, and the country has a moderate cost of living. This, in addition to its improving infrastructure and easy access to skilled workers at relatively low salaries, makes Namibia an option worth considering for businesses. 

Namibia has also established its first national minimum wage of N$18.00 per hour applicable in most sectors from January 1, 2025, signifying a socio-economic step forward.

Employer of Record (EOR) services are becoming popular, as they ensure businesses can easily and compliantly hire employees. Remote People provides Namibia EOR services starting at $199 per month. 

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How to Hire Employees in Namibia

Setting Up a Local Entity

A company choosing to hire in Namibia on its own can set up a local subsidiary or branch. This requires company incorporation and registration with the tax and social security authorities, and compliance with employment law. It can take several months and requires fees for company registration, a local company director, bank account opening, and statutory filings. Setup and ongoing administrative costs can be several thousand US dollars or more (US$10,000+), depending on complexity, legal and incorporation fees, and minimum capital.

The entity is the legal employer and must manage all the aspects of being an employer: payroll, filing taxes, employee benefits, and termination rules. This provides the most control but has the most administrative burden and legal compliance risk for the employer.

Working with an Employer of Record (EOR)

A company can also partner with an EOR to hire employees legally without establishing a local entity in Namibia. The EOR acts as the legal employer for tax, labor law, and administrative purposes, contracting with, paying, and managing employees on behalf of the company, and providing statutory employee benefits in compliance with Namibian laws, while the hiring company manages the employees’ day‑to‑day work. 

An EOR can help companies manage compliance and reduce risk, and offer a faster way to enter the market. An EOR can be ideal for market testing or small numbers of hires, and offers more flexibility and speed, with predictable per‑employee fees.

Hiring Independent Contractors

In Namibia, you can hire independent contractors. Contract employees are a flexible and lower‑cost alternative to full‑time employees, as they are paid by invoice, and no payroll taxes or benefits are due. Furthermore, the employer does not need to fulfill the obligations to which they would be subject for employees. 

Companies should note that if a contractor is classified incorrectly and is legally an employee, the company could face legal issues, including penalties and back pay. 

Independent contractors are not entitled to the various leave, notice of termination periods, or other employment benefits that employees have. The employer is responsible for determining whether a worker is an employee or an independent contractor, and should take care to make this determination correctly.

Namibia EOR vs Legal Entity in Namibia

When it comes to deciding between an Employer of Record (EOR) and a legal entity in Namibia, there are differences in cost, level of control, and legal liability.

A legal entity can cost more than US$10,000 and take 3-6 months to establish and maintain. This option also requires managing payroll, taxes, employment contracts, and filings with Namibian authorities. The hiring company is solely responsible for meeting Namibian labor laws, which can be complex and risky.

An EOR, on the other hand, is a third-party service that allows companies to hire staff in Namibia without establishing a local entity, typically for a flat fee starting at $199 per month with Remote People. The EOR takes on employment contracts, payroll, benefits, and legal compliance. An EOR’s rates are based on a one-time setup fee and a monthly fee per employee. You can also onboard employees in a matter of days. Legal liability for compliance also transfers to the EOR provider.

A legal entity provides the most control and stability in the long term, but takes time, cost, and legal liability. An EOR is a faster, more flexible, and lower-risk way to hire your first team members in Namibia. An EOR may be a better option for small teams.

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Using an Employer of Record in Namibia

The Employer of Record in Namibia acts as the legal employer for each local or foreign national employee, while the original employer manages and instructs them in their day-to-day work. They must register employees with the Namibian authorities, operate compliant payroll, file taxes, and manage statutory benefits.

Namibia Employer Of Record

Namibia EOR services typically cover:

  • Preparing and updating employment contracts following Namibian labour legislation
  • Registration of employees with the tax and social security commission (SSC)
  • Processing of payroll on a monthly or agreed cycle and disbursing salaries
  • Withholding and remitting employees’ income tax and pension
  • Remitting employer pension contributions
  • Administration of statutory benefits (leave, insurance, and termination)
  • Filing and reporting to Namibian authorities for full compliance

How Much Does a Namibia EOR Cost?

A Namibia EOR service provider typically charges a fixed monthly retainer ($199 with Remote People) as well as a one-time onboarding fee for each new employee. Onboarding fees vary, but most EOR companies will charge between US$100 and US$500 per employee based on their role.

Add‑ons are optional and can include local health insurance packages, higher levels of HR support services, and recruitment support. All fees are transparent,  based on volume and level of service.

Employment and Labor Laws in Namibia

Key Contract Requirements

  • Name of the employer and the employee 
  • Job title and job description 
  • Salary and currency 
  • Working hours and overtime terms 
  • Leave entitlements 
  • Probation provisions, if applicable 
  • Notice periods and termination terms 
  • Pension contributions and deductions required by law

Working Hours

In general, employees must not work more than 45 hours a week and no more than eight hours a day; if they work more than five days a week, or nine hours a day if they work five or fewer days. Overtime is limited to 10 hours a week or three hours a day, at most.

Overtime

Employees must be paid at least 150% of their regular hourly rate for overtime. For work between 8 pm and 7 am, they must also be paid 6% more of their hourly rate for each hour. For work on Sundays and public holidays, the rate must be at least double.

Probation Periods

Probation is not required by law, but most contracts include one. Employers usually set a probation period of three to six months, which is agreed upon in the contract. An employee or employer may terminate the contract during this period with shorter notice, but they must still act fairly and base their decision on performance or suitability. Probation periods longer than six months are not usual and could be challenged, unless the employer can justify this with the complexity of the position.

Payroll and Employment Taxes in Namibia

Payroll Cycle

Employers are required to pay employees regularly (generally every month). The payroll should show the amount of wages, overtime, and (if any) bonuses and statutory deductions.

Minimum Wage

As of January 2025, Namibia’s national minimum wage is N$18 per hour, which is approximately N$3,507 per month, for a 45-hour working week. 

The minimum wage for domestic workers will increase to N$15 per hour in 2026 and to N$18 per hour in 2027. For agricultural workers, it will increase to N$14 per hour in 2026 and N$18 per hour in 2027.

Learn more about minimum wage in Namibia

Bonus Payments

Namibian law does not mandate bonus payments (e.g., 13‑month pay), although these may be provided at the employer’s discretion to attract top talent.

Employer Tax Contributions

Employers must pay 0.9% of an employee’s salary to the Social Security Commission (SSC) for old‑age, invalidity, and survivor benefits.

Employee Payroll Contributions

Employees also pay 0.9% of their salary towards SSC. contributing at least N$2.70 and at most N$81.00 per month. The payments are due within 20 days after the end of the month.

Income Tax

Income tax is withheld by the employer via Pay-as-you-earn (PAYE) and paid to the Namibia Revenue Agency (NamRA) every month. Namibia’s progressive income tax scale is based on earnings levels and currently varies from 0% to a top rate of 37% for the highest earners. 

Pension System

In addition to the SSC contributions, employers can offer their employees additional voluntary retirement savings plans. These are not compulsory and can be subject to tax as benefits‑in‑kind if treated as such. As statutory SSC contributions do not typically provide an adequate retirement income, many local employees also contribute to private pension funds.

Tax Compliance and Payroll Reporting

NamRA requires the payroll to be submitted every month, along with the remittance of SSC contributions. Employers are required to keep records of each employee’s earnings, deductions, leave, and contributions. This is to allow for NamRA audits and labour inspections.

Work Permits and Visas in Namibia

Critical Skills Employment Permit

Namibia does not offer different categories as individual visa types (e.g., “critical skills”). Instead, it has a Long‑Term Work Permit that is valid for 1-2 years, which is used frequently for foreign employees with special skills in certain positions when a local person cannot be found for that position. 

The process involves advertising in at least 3 national newspapers for a 2‑week period, local labour market testing through the Ministry of Labour, verification of qualification and experience, medical/radiological and police clearance, and evidence of financial means.

General Employment Permit

The Long‑Term Work Permit is also used for general employment (non-critical skills), and can be renewed for the same duration for up to two further periods. It generally takes several weeks up to a few months, depending on the response times for documentation from the applicant and clearance by the foreigner’s country.

Intra-Company Transfer Permit

Namibia does not offer an official Intra‑Company Transfer category. Transfers are managed under the Long‑Term Work Permit category, with the same labour market testing and documentation.

Time Off and Leave in Namibia

Mandatory Leave Entitlements

In Namibia, there are a number of mandatory leaves to which an employee is entitled, including annual leave, sick leave, and maternity leave. Annual leave is 20 working days for those working a 5-day work week and 24 days for a 6-day work week, and can be determined by the employer as to when it will be taken, but it must be within a set period.

Public Holidays

Namibia has thirteen public holidays a year, which include: Independence Day, Cassinga Day, Heroes’ Day, Christmas Day, among others. If a public holiday falls on a Sunday, the next day is observed, Monday, unless Monday is also a public holiday.

Under the Labour Act, if a worker regularly works on a public holiday and he does not work that day, he shall be paid full pay for the day and if he works he shall be paid at the premium rate (unless agreed otherwise by the worker or workers) usually normal pay plus basic rate per hour for hours worked. If it is not a day normally worked by the employee, they should receive twice their basic hourly rate for any hours worked.

Sick Leave

An employee is entitled to not less than 30 working days’ sick leave in a year, if they work five days per week, or 36 working days if they work six days per week. Pro rata shall apply to part-time employees. A medical certificate is required in cases of long-term sick leave.

Maternity Leave

Female employees shall be entitled to a minimum of four weeks immediately before the expected date of delivery and eight weeks after the birth of the child, with full pay calculated based on their ordinary wage.

Paternity Leave

In Namibia, there is no statutory provision for formal paternity leave. An employer may, at their discretion, offer it as a benefit, or it may be available as per company policy, but is not required to do so under the Labour Act.

Parental Leave

There is no statutory shared parental leave. The provisions on maternity only apply to a mother.

Bereavement and Jury Duty

Namibia’s Labour Act does not have express provisions on bereavement leave or jury duty leave. The employer should include these in their policies or contracts if they want to provide for these types of leave.

Employee Benefits in Namibia

In Namibia, employees are entitled to receive certain statutory entitlements from their employers. These include paid annual leave, sick leave, maternity leave, social security contributions, and notice/severance entitlements. 

In addition, they may be provided with other benefits, such as private health insurance, transport allowance, or pension plans. Benefits‑in‑kind (e.g., company car, accommodation allowance, insurance) are generally subject to tax as part of total remuneration unless separately specified and valued in the employment contract. 

Employers should consider the Taxation of Fringe Benefits implications under PAYE, and all non‑cash benefits should be disclosed as part of the employment contract value.

Terminations and Severance in Namibia

Ending an Employment Contract

Termination of an employment contract in Namibia is by agreement, resignation, dismissal, or expiry of a fixed-term contract. Employers have to give reasons for a dismissal, for example, misconduct, incapacity, or retrenchment, and have to comply with fair procedure as provided for in the Labour Act. The employer is normally required to give an employee notice or pay in lieu of notice. 

When the termination is caused by retrenchment or is an unfair dismissal, severance pay must be given. The normal severance pay is one week’s wages for each year of continuous service.

Notice Periods

Notice of termination is to be given by the employer. The following are the notice periods under the Namibian law:

Length of EmploymentMinimum Notice Period
Four weeks or lessAt least one day’s notice
More than four weeks and less than a yearAt least one week’s notice
More than a yearAt least one month’s notice

Employers can pay in lieu of notice instead of the employee working it.

Severance Pay

After 12 months of continuous service, if an employer terminates the contract of employment, he shall pay to the employee, at the time of such termination, a sum of money equal to at least one week’s remuneration for each year of continuous service. This applies when the termination is without reasonable cause, such as serious misconduct.

Expand into Namibia Easily with Remote People’s Employer of Record (EOR) Solution

Our Namibia EOR service enables clients to legally and efficiently hire Namibian employees without the need to establish a local legal entity. For a fee starting from approximately USD 199/month plus an initial onboarding fee, we handle contracts, payroll, statutory deductions, annual leave, termination, and local HR support. 

Partnering with us can help your business enter the Namibian market rapidly, minimize legal exposure, and avoid entity set-up hassles. This lets you concentrate on what matters strategically, while benefiting from local employment law expertise. Contact us today to get started.