Tuvalu, an island country located in the Pacific Ocean between Hawaii and Australia, is emerging as a potential investment destination for companies seeking to expand their presence in the South Pacific region. Known for owning the .tv internet domain, Tuvalu can be a good choice for companies working in media or entertainment, or those striving to improve their local presence in this area.

This help guide will advise you on hiring in Tuvalu, primarily with an Employer of Record to support you along the way. You’ll learn the key labor laws of this country, and how an EOR provider can help ensure all employees are hired legally and receive the benefits they are entitled to by law.

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How to Hire Employees in Tuvalu

There are three key ways to hire employees in Tuvalu:

Setting Up a Local Entity

Establishing a local entity in Tuvalu is the legal process of setting up a business in this country. It gives the company full control over the hiring process, with easier access to government contracts and community-based projects, and is the best choice for businesses with long-term plans for hiring in Tuvalu.

It involves subscribing to the Memorandum of Association, setting up as either a private company or a partnership, and gathering the necessary documents/fees to establish your company.

While it provides complete control over hiring, establishing a local entity can be time-consuming and expensive, perhaps being better suited to larger institutions.

Working with an Employer of Record (EOR)

An Employer of Record works as the legal employer of workers on your behalf, negating the need to establish a legal entity and ensuring that all practices are in line with local labor laws.

While there are still costs involved in this hiring method, it is generally much cheaper than setting up a legal company and is ideal for testing the market in Tuvalu.

Hiring Independent Contractors

Hiring freelance workers is a popular hiring method in Tuvalu. It’s flexible, cost-effective, and perfect for one-off or short-term projects.

However, it’s important to ensure contractors are classified correctly to avoid any legal issues involved with misclassification. It’s also crucial to ensure that workers understand that they are responsible for their own taxes and benefits when working for your company.

Tuvalu EOR vs Legal Entity in Tuvalu

There are different reasons why companies choose to use an EOR, or establish a legal entity in Tuvalu.

An EOR can be a much quicker process, with EORs managing to bring on new employees quickly and even managing the payroll process for you. They’ll also make sure that workers receive all mandatory employee benefits such as annual leave, sick leave, and overtime compensation.

Setting up a legal entity involves high levels of administrative work, including registering under the Companies Act, choosing a unique business name, and submitting a memorandum. There are also significant financial implications, such as paying business license fees and registration fees. However, the method does provide full control when hiring, making it useful for businesses that want to build long-term credibility when hiring in Tuvalu.

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Using an Employer of Record in Tuvalu

An Employer of Record in Tuvalu would handle various tasks, acting as the legal employer for workers in Tuvalu and ensuring that local labor laws are fully complied with.

Tuvalu Employer Of Record

The sort of tasks that an EOR in Tuvalu would typically handle include:

  • Employment contracts: An EOR would draft employment contracts, ensuring that salaries, duties, benefits, and termination rules are clearly outlined.
  • Payroll processing: Salaries and payroll processing would be handled by an EOR, ensuring that necessary deductions for tax and social insurance are removed.
  • Tax and social contributions: An EOR would register with the tax authorities in Tuvalu, making sure that all relevant contributions are paid correctly and on time.
  • Compliance with labor regulations: With an EOR onboard, all labor regulations would be strictly adhered to, from ensuring benefits are provided to maintaining a safe working environment.
  • Benefits administration: Ensuring workers receive all benefits is a key role for an EOR, making sure that annual leave, set working hours, and pension contributions are maintained.

How Much Does a Tuvalu EOR Cost?

The cost of an EOR in Tuvalu varies depending on the level of support your business requires.

On average, an EOR in Tuvalu costs between $400 – $800 per employee each month, with an onboarding fee usually costing between $300 – $1,000.

EOR costs are similar to nearby islands in the Pacific, with specialized compliance needed to ensure local labor laws are always abided by.

Even when taking these fees into account, hiring an EOR can be significantly cheaper than establishing a legal entity, particularly if you’re looking to hire a small team in a short time frame.

Employment and Labor Laws in Tuvalu

There are key rules set out by local labor legislation in Tuvalu that outline the rights and obligations of employees and businesses.

Below, we’ve provided an overview of what rules employers need to follow and what they should be aware of when hiring in Tuvalu.

Key Contract Requirements

Employers must comply with the following requirements when hiring in Tuvalu:

  • Issuing formal job offers: Employers must issue new workers a formal job offer, detailing the role, start date, and employment terms. The worker must formally accept the offer before commencing work.
  • Written contracts: Contracts must be in writing and signed before work takes place. A contract should include the job title, description of responsibilities, employee benefits, and working hours.
  • Registering with local authorities: Employers need to register with the Tuvalu National Provident Fund (TNPF) to contribute to the social security system and ensure that payroll systems are fully set up.
  • Ensuring workers have the right to work verification: Non-citizens of Tuvalu must have a valid work permit and visa to work in this country, as granted by the Tuvalu Ministry of Labour.
  • Notifying employees of their rights: Companies must inform all workers of their legal rights and entitlements, in line with the Labour and Employment Relations Act of 2017.
  • Maintaining workplace safety: A safe working environment must be maintained at all times under Tuvalu’s occupational safety laws, with hygiene and equality being of utmost importance.
  • Non-discrimination: Tuvalu’s equality laws must be adhered to when hiring new staff members, ensuring that workers aren’t prejudiced against race, gender, religion, or political viewpoint.
  • Welcoming new employees: Employers must onboard their new workers by ensuring they have access to a company handbook detailing workplace procedures/policies, and ensuring all expectations of the job are explained in full.

Working Hours

Standard working hours in Tuvalu are 40 hours a week, spread over 5 work days of 8 hours each (usually between Monday – Friday).

Regular breaks must be issued, and employees are entitled to a minimum of 1 day off per week, which is typically provided on a Sunday.

Overtime

Employees must be paid a compensatory rate for working overtime hours that exceed the normal 40-hour week.

There is no specific rate mentioned in the Labour and Employment Relations Act – only that it must be paid at a higher rate than their normal salary.

Probation Periods

Probation periods are normal practice in Tuvalu, with a period of between 3 – 6 months being common with an employment contract.

Either party may terminate the contract within the probation period, with a shorter notice period than usually required in an employment contract.

Learn more about probationary periods in Tuvalu

Payroll and Employment Taxes in Tuvalu

Employers must follow Tuvalu’s financial regulations when hiring in this country, particularly in terms of payroll, minimum wage, and employer/employee contributions.

Below is a summary of the key rules regarding payroll and employment taxes in Tuvalu.

Payroll Cycle

There is no set payroll cycle that employers must follow in Tuvalu, with employers usually paying workers either monthly or weekly.

Minimum Wage

There is no statutory minimum wage that companies must adhere to in Tuvalu.

Learn more about minimum wage in Tuvalu

Bonus Payments

Bonus payments, or 13-month pay, are not a statutory right for employees in Tuvalu. 

Some employers do offer bonuses based on performance, but this is offered at the discretion of the employer.

Employer Tax Contributions

Employers must contribute 10% of their gross monthly payroll towards the TNPF. These contributions primarily help to fund the pension system of Tuvalu, and must be made by the 155h of the following pay period to avoid late payments.

Employee Payroll Contributions

Employees must contribute 13% of their gross monthly salary towards the TNPF, which helps to fund pensions, disability benefits, and survivor benefits.

Income Tax

The income tax rate for individuals working in Tuvalu is 30%, as stipulated in the Tuvalu Income Tax Act.

Pension System

The pension system in Tuvalu is primarily managed by the Tuvalu National Provident Fund and the universal old-age pension.

The TNPF manages pensions for employees, providing a lump-sum benefit from the age of 46 to workers who have made a set number of contributions.

The universal old-age pension is a non-contributory fund that provides financial support to citizens aged 70 and over.

Tax Compliance and Payroll Reporting

Employers in Tuvalu must be compliant with tax regulations, including social insurance contributions, income tax deductions, and regular tax reporting. They must file corporate income tax returns annually, and within 3 months of the fiscal year end.

Records must be maintained for a minimum of 5 years.

Work Permits and Visas in Tuvalu

Non-national workers in Tuvalu must have a confirmed job offer or sponsorship from a local employer to qualify for a work permit/visa.

Applicants must provide a valid passport, application form, employment letter/contract, and police clearance certificate to qualify, and processing can take between 4 – 6 weeks. Work permits are usually valid for 12 months, and can be renewed a maximum of 3 times.

Type of Visa/PermitValidity
Visa-free / Visa on Arrival1-month duration
Work Permit / Employment VisaUp to 12 months
Temporary Residence PermitLinked to an employment visa
Business / Study VisaValid for up to 1 year

Time Off and Leave in Tuvalu

Mandatory Leave Entitlements

Workers in Tuvalu are entitled to 15 days of paid annual leave per year, once they have completed one year of continuous service.

Some employers may offer more as a supplementary benefit.

Public Holidays

Tuvalu celebrates various public holidays each year, which provide workers with a paid day off.

The public holidays in Tuvalu in 2025 are as follows:

  • New Year’s Day (January 1)
  • Commonwealth Day (March 10)
  • Good Friday (April 18)
  • Easter Monday (April 21)
  • Gospel Day (May 12)
  • Anniversary of the Birthday of the Sovereign (June 14)
  • National Children’s Day (August 4)
  • Tuvalu Day (October 1)
  • Tuvalu Day Holiday (October 2)
  • Heir to the Throne’s Birthday (November 10)
  • Christmas Day (December 25)
  • Boxing Day (December 26)

Sick Leave

Full-time employees in Tuvalu are entitled to a minimum of 10 days of sick leave per year. Part-time employees are eligible for sick leave on a pro-rata basis.

Workers must provide their employer with a medical certificate to qualify for sick leave.

Maternity Leave

Female employees are entitled to 12 weeks of fully paid maternity leave in Tuvalu. This is usually taken as 6 weeks before birth and 6 weeks after birth.

Paid leave is provided to employees who have contributed to social security for at least 1 year.

Paternity Leave

Male employees are entitled to paternity leave in Tuvalu. This is offered to both biological and adoptive parents.

Paternity leave in Tuvalu consists of 10 days of fully paid leave, which must be taken within 4 months of the birth/adoption.

Parental Leave

There is no statutory requirement for employers to provide parental leave to employees in Tuvalu beyond the standard maternity/paternity benefits.

Bereavement and Jury Duty

Employees who have completed a minimum of 3 months of continuous service are entitled to 3 days of paid compassionate leave per year. This is to be taken in the event of the death/critical illness of a close family member.

There is no formal jury system in Tuvalu; therefore, employees are not required to attend jury duty.

Employee Benefits in Tuvalu

Employers are advised to provide their workers with supplementary benefits to retain staff and increase the number of job applications for new roles.

These may include flexible working, performance bonuses, or private health insurance options.

The mandatory employee benefits in Tuvalu are:

  • Maternity leave
  • Paternity leave
  • Sick leave
  • Social security contributions

Some examples of supplementary employee benefits companies could provide include:

  • Performance bonuses
  • Flexible working
  • Transport, food, or housing expenses
  • Company car
  • Private health insurance
  • Advanced training opportunities

Terminations and Severance in Tuvalu

Ending an Employment Contract

Employment can be terminated in Tuvalu for a number of reasons, provided that employers follow the rules set out in the Labour and Employment Relations Act.

Typical reasons for termination include:

  • Redundancy
  • Poor work performance
  • Business closure
  • Employee misconduct
  • Breach of contract

Notice Periods

Employers or employees who wish to terminate an employment contract must provide a minimum of 1 week’s notice.

Notice periods may increase with length of service and be stipulated explicitly in an employment contract.

Severance Pay

If an employer terminated an employee’s contract due to redundancy or an employer-initiated reason (excluding misconduct), they may be eligible for severance pay.

The exact amounts are not stipulated by law; however, this is usually calculated based on years of service and experience.

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

There are many advantages to hiring in Tuvalu, particularly for companies looking to expand into the Pacific region in key industries such as fishing, agriculture, and the public sector.

An Employer of Record (EOR) helps streamline hiring by managing payroll, benefits, and labor law compliance—removing the burden of local administration. At Remote People, we provide EOR services tailored to Tuvalu’s unique legal and cultural landscape, making it easier for your business to build a compliant local team.

Working with an EOR can significantly improve the efficiency and compliance of expanding your business abroad, allowing you and your team to focus on other areas of your business.

Contact Remote People today to see how we can help your business hire in Tuvalu.