An employer of record company allows you to hire talent in days, instead of months, while ensuring compliance with local laws.

If your company is looking to expand and bring on employees in the Solomon Islands, the country’s strategic location, growing economy, and strong workforce make it an increasingly attractive destination for international businesses. 

However, navigating local employment rules can be challenging without proper guidance. This guide covers everything you need to hire compliantly in the Solomon Islands, whether you’re building a local presence or working with remote talent.

How to Hire Employees in the Solomon Islands

There are three major options for companies seeking to employ local talent in the Solomon Islands:

Setting Up a Local Entity

To establish a local entity in the Solomon Islands, you must incorporate a company under the Companies Act. 

Although this provides full control over recruitment and payroll, it’s a costly and time-consuming process that may not suit businesses testing the market or hiring small teams.

Working with an Employer of Record (EOR)

An Employer of Record service provides the fastest, most compliant way to hire in the Solomon Islands without establishing a local entity. They become the legal employer while you maintain day-to-day management of your team members.

EORs handle everything, from contract creation to payroll processing, ensuring your Solomon Islands team members receive proper benefits and protections under local law.

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Hiring Independent Contractors

You can only hire independent contractors for project-based or consulting roles. Contractors must work independently and take on financial risk for their services. 

Employers must confirm that contractors meet these requirements to prevent misclassification, which violates local employment laws.

A Contractor of Record service can help ensure contractor relationships remain compliant with legal requirements.

Solomon Islands EOR vs Legal Entity in the Solomon Islands

Making the right choice between EOR services and establishing a local entity depends on your business objectives, timeline, and risk tolerance.

EOR services start at just $199 monthly per employee with no upfront investment, and you can have your first hire working within 1-2 weeks. 

Unlike establishing a local entity that requires $15,000-$30,000 in initial costs plus ongoing monthly expenses, EORs significantly reduce first-year expenditure for growing teams.

With an EOR, all compliance obligations are managed by local experts. You don’t have to handle annual filings, audits, and regulatory monitoring as required for local companies. The service provider assumes responsibility for employment law compliance and adapts to regulatory changes on your behalf.

EOR services are flexible. Employers can quickly scale their team up or down based on market demands and enter or exit the Solomon Islands without the lengthy administrative requirements during business changes.

That’s why EOR services often provide better value; they eliminate expenses for office setup and ongoing legal compliance.

Hire in Solomon Islands

A remote Pacific archipelago with NPF superannuation, Solomon Islands Labour Act, and important local compliance requirements.

We handle employment contracts, payroll, social contributions, and full Solomon Islands compliance.

No local entity needed. Your team can start in days.

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Using an Employer of Record in the Solomon Islands

An Employer of Record in the Solomon Islands manages all employment and compliance obligations, allowing you to concentrate entirely on your business operations and growth. 

They serve as the official local employer, enabling you to hire Solomon Islands talent without establishing a local company presence.

An Employer of Record in the Solomon Islands manages these responsibilities for you:

  • Employment contracts: They create and maintain employment agreements that align with Solomon Islands labor laws, covering appropriate terms for work schedules, compensation packages, benefits, and dismissal procedures.
  • Payroll processing: The EOR team oversees complete payroll operations. They process salaries, calculate tax deductions, handle social security payments, and ensure prompt disbursements to staff and regulatory authorities.
  • Tax compliance: The EOR guarantees accurate calculation and submission of all employment taxes, including income tax deductions, social security payments, and other mandatory contributions.
  • Benefits administration: EORs administer required benefits such as annual leave, medical leave, and parental leave, alongside any additional benefits you decide to offer.
  • Work Permit processing: They handle all visa and work permit applications using the required forms and documentation that improve your chances of hiring international employees.
  • Termination management: When an employment contract ends, EORs manage all procedures, including notice requirements, final compensation, severance computations, and official notifications to authorities.

How Much Does a Solomon Islands EOR Cost?

Most EOR providers in the Solomon Islands charge setup fees ranging from $300-$1,500, depending on the provider and service packages.

Monthly employee fees also differ across providers, though Remote People offers competitive rates starting at $199 per employee monthly for their core package. 

This covers contract development, payroll management, tax administration, and standard benefits coordination. Many providers offer additional services like HR support, insurance plans, equipment management, and detailed compliance reporting, at moderately higher rates than the standard monthly package.

When compared to establishing a local company, EOR services are more affordable and simpler.

Employment and Labor Laws in the Solomon Islands

To hire successfully in the Solomon Islands, businesses must follow the established employment and labor regulations. Here’s a breakdown of employment obligations that every employer must fulfill when hiring in the Solomon Islands.

Key Contract Requirements

All employment contracts in the Solomon Islands must clearly specify the employment terms and conditions.

Written contracts are required for all employment arrangements lasting beyond one month. These must contain position title and responsibilities, work location, commencement date, compensation and payment schedule, work hours, leave allocations, notice requirements, and dismissal procedures.

The agreement must define the employment type and meet minimum wage standards, while ensuring no terms are less favorable than legally mandated requirements.

Temporary contracts are allowed but cannot be used to avoid permanent employment obligations.

Working Hours

Regular work hours in the Solomon Islands must not exceed 40 hours a week. This means that daily work is limited to five 8-hour shifts without overtime payment.

Workers are guaranteed at least one weekly rest day, and schedules must incorporate adequate break periods, including a minimum 30-minute meal break for shifts over 5 hours.

Alternative work arrangements are permitted as long as they satisfy total hour requirements and don’t interfere with operational needs or customer service standards.

Overtime

Solomon Islands employees receive overtime at 1.5 times their standard rates for regular work hours. This covers work beyond the regular 40-hour week and cannot be waived through contracts or agreements.

Companies must keep precise records of work hours and overtime payments. Failure to comply can lead to financial penalties and back-pay demands.

Probation Periods

Probation periods in the Solomon Islands generally range from 3-6 months for standard roles. During this phase, either party may end employment within a reduced notice period of one week.

Probation periods are used to assess employee performance, not to deny them fundamental employment rights. Termination during probation also requires a valid justification and must not involve discrimination or retaliation.

Payroll and Employment Taxes in the Solomon Islands

Businesses hiring in the Solomon Islands must remain compliant with the country’s payroll processes. This covers base salaries, required deductions, employer obligations, and tax responsibilities.

Here’s a breakdown of essential requirements for compliance and effective cost management.

Payroll Cycle

The majority of Solomon Islands employers use monthly payroll processing, though bi-weekly schedules are also acceptable and frequently used. Payments must be completed within 7 days following the pay period conclusion.

Minimum Wage

Solomon Islands uses a sector-specific minimum wage, which was last updated on August 1, 2019.

The current minimum wage levels are SBD 8.00 hourly for standard industries and SBD 7.20 hourly for agricultural and fishing workers.

All workers, regardless of contract type or payment structure, must earn at least the relevant minimum wage rate.

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Bonus Payments

Bonus compensation in the Solomon Islands is not mandatory and generally subject to the employer’s discretion. Nevertheless, if any employer commits to a work bonus, it becomes a legal obligation that the employer must fulfill.

All bonus payments are subject to identical tax withholdings and National Provident Fund contributions as standard wages.

Employer Tax Contributions

Solomon Islands employers must make various statutory payments for their staff:

  • National Provident Fund: Employers contribute 7.5% of employee wages to the NPF system.
  • Training Levy: This refers to the contributions used to support national workforce development and skills programs.
  • Workers’ Compensation: They are mostly insurance premiums varying by industry risk classification.

Employee Payroll Contributions

Employees make required contributions, including:

  • National Provident Fund: Workers must contribute 5% of their gross automatically deducted by employers.
  • Professional Dues: Where relevant, professional association fees are deducted according to membership agreements.

Income Tax

Solomon Islands uses a progressive income tax framework with rates increasing by income level and a tax-free threshold for lower earners.

Tax deductions are processed monthly using annual income estimates. Workers may require annual tax filing based on total earnings and withholding precision.

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Pension System

Solomon Islands offers retirement, disability, and survivor benefits through the National Provident Fund, requiring combined employer and employee total contributions of 12.5% of wages.

Tax Compliance and Payroll Reporting

Employers must submit monthly payroll documentation to tax authorities and transfer all withheld taxes by the 15th of the subsequent month. Missing deadlines may result in penalty fees and interest charges.

Employers must also supply workers with annual tax documentation by January 31st after the tax year ends.

Work Permits and Visas in the Solomon Islands

Foreign nationals require proper work authorization before beginning employment in the Solomon Islands. 

The government enforces strict work permit requirements, and visitors who wish to engage in business, profession, or employment for more than 30 days must obtain a work permit from the Commissioner of Labour.

Critical Skills Employment Permit

Created for professionals in areas where local talent is scarce. This includes medical practitioners, senior technical specialists, IT professionals, financial advisors, and other expert positions.

The permit is typically issued for 1-2 years with renewal possibilities available.

General Employment Permit

Covers employment positions outside the critical skills framework. Companies must show genuine local recruitment attempts before seeking foreign worker permits.

Processing typically takes 6-10 weeks, with permits generally valid for one year and opportunities for extension.

Intra-Company Transfer Permit

Ideal for transferring current staff of multinationals between companies or branch offices. Workers must have a minimum of 6-12 months of employment history with the transferring organization to qualify.

These permits are issued for 6 months to 2 years, based on transfer requirements and business needs.

Time Off and Leave in the Solomon Islands

Solomon Islands employment law recognizes the importance of work-life balance.

Workers are entitled to comprehensive leave entitlements that support employee wellbeing and family obligations.  

Employers must understand these requirements, as proper leave administration not only ensures legal compliance but also helps attract and retain quality talent in the local job market.

Mandatory Leave Entitlements

All Solomon Islands employees receive paid annual leave of at least 21 working days following one year of continuous service. Additional leave may be negotiated based on length of service and company policies.

Public Holidays

Solomon Islands recognizes the following public holidays annually:

  • New Year’s Day (1 January)
  • Independence Day (7 July)
  • Good Friday (Date Varies)
  • Easter Monday (Date Varies)
  • Queen’s Birthday (Date Varies)
  • Christmas Day (25 December)
  • Boxing Day (26 December)

Sick Leave

Workers are entitled to paid medical leave of 14 days annually after three months of employment. Companies may require medical certification from approved healthcare providers for verification.

Sick leave does not carry over to the following year, and unused medical leave is not compensated upon employment termination.

Maternity Leave

Female workers receive 12 weeks of paid maternity leave, with minimum post-birth requirements. Leave may commence up to 6 weeks before the expected delivery.

There is job security for workers during maternity absence, and they cannot face termination related to pregnancy or maternity leave use.

Paternity Leave

Male employees receive paternity leave of 5 days following child birth. This leave is compensated at standard rates and must be utilized within the approved timeframe after birth.

Parental Leave

Workers may qualify for extended unpaid parental leave for childcare needs. This leave applies to employees with young children and requires advance notification.

Bereavement and Jury Duty

Solomon Islands employees receive paid bereavement leave for immediate family deaths, generally 3-5 days based on relationship and situation.

Jury service leave is required when workers are summoned for jury duty, and employers cannot penalize employees for completing this civic obligation.

Employee Benefits in the Solomon Islands

Companies can offer additional benefits beyond the statutory requirements to attract and retain quality employees.

National Provident Fund coverage already delivers retirement, disability, and medical benefits through combined employer and employee contributions.

However, many companies provide extra benefits such as:

  • Private health insurance
  • Life insurance coverage
  • Additional retirement savings
  • Transport allowances
  • Housing subsidies

This approach helps develop attractive compensation offerings. Most employee benefits in the Solomon Islands are taxable as income, with certain exceptions:

  • Statutory benefits, including National Provident Fund and workers’ compensation, remain non-taxable.
  • Employer-provided health insurance premiums may qualify for tax deductions while remaining non-taxable for employees.
  • Company transportation is generally not taxable.
  • Job-related professional training and development remain tax-exempt.

Terminations and Severance in the Solomon Islands

Ending an Employment Contract

  • Serious workplace misconduct
  • Continued poor performance following proper warnings and improvement opportunities
  • Violation of employment agreement terms
  • Operational restructuring or redundancy

Before performance-related termination, employers must maintain detailed documentation of performance concerns, disciplinary measures, improvement initiatives, and business rationale for dismissal decisions.

Notice Periods

The required notice period varies based on employment duration and employee level:

Length of ServiceMinimum Notice Period
Less than 1 year of service1 week notice
2–5 years of service2 weeks notice
5–10 years of service1 month notice

Senior management and executive roles may require extended notice periods outlined in individual contracts, commonly 3-6 months.

Severance Pay

Workers dismissed after completing service periods due to business closure, downsizing, or role elimination qualify for statutory severance compensation.

Severance is not required for voluntary resignation, although some companies offer retention payments or departure benefits.

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

Expanding your business into Solomon Islands doesn’t have to be complex or risky. With Remote People’s comprehensive Employer of Record service, you can hire local talent while maintaining full compliance with Solomon Islands employment laws.

We handle all the complex legal, tax, and administrative requirements while you focus on growing your business and managing your team.

Why Choose Remote People?

Our local expertise in Pacific region employment practices helps us to guarantee complete compliance assurance with ongoing monitoring. We provide quick employee onboarding without the delay experienced by most local entity establishments.

With just $199 per month, per employee, you get to benefit from our comprehensive service.

Our comprehensive services include:

  • Employment contracts meeting all legal requirements
  • Accurate payroll processing with proper tax withholdings
  • Benefits administration, including NPF contributions
  • Cultural sensitivity guidance, and local HR best practices
  • Expert termination procedures and severance calculations

Whether you are hiring your first Solomon Islands employee or building a regional team, our services adapt to your needs. We’ll help you add team members during growth or adjust during business changes without local entity constraints.

Contact Remote People today to learn how we can help you expand into Solomon Islands quickly, compliantly, and cost-effectively. Your Solomon Islands team could be working within weeks. Let’s help you begin!