A landlocked country in the southern portion of Africa, Zambia is well-known for its rugged terrain and diverse wildlife. On the nation’s border with Zimbabwe, tourists flock to the 108-meter drop of breathtaking Victoria Falls. While Zambia’s tourism sector is quickly growing, its main industries remain centered around mining, agriculture, and manufacturing. The country’s copper mining industry accounts for a large share of its $28.9 billion GDP. 

Zambia is considered one of the safest countries in the world to visit, and its people promote an ethos of peace and harmony that make it a strategic place to do business as well as an attractive tourism destination. Combining acres of untamed wilderness and awe-inspiring natural wonders with affordable labor costs and advantageous tax structures, Zambia stands out as a premier place to hire remote or in-person international employees.  

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Why Expand Your Business to Zambia

Strategic Advantages of the Zambian Market

Zambia’s strategic location in the heart of southern Africa makes it perfectly positioned as a hub of trade and commerce. The country is widely considered to offer a favorable business environment, and its residents are primed to succeed in international companies due to the nation’s emphasis on English education. With a large workforce of bilingual personnel to choose from, the Zambian market is a perfect place to put down roots or acquire new talent. 

Additionally, labor costs are low compared with those in many Western countries. The minimum wage in Zambia is examined every other year and adjusted to reflect economic conditions. The current minimum wage for general workers is K13.50 per hour. The Zambian Kwacha is equal to 0.044 USD, so that minimum hourly wage equates to 0.59 USD per hour. In turn, that equals $28.32 for a standard 48-hour workweek. 

Importance of Being Aware of Zambian Labor Laws

Zambian labor laws are largely governed by the Employment Code Act No. 3 of 2019, which modernizes and consolidates previous legislation that was more spread out and more difficult to parse through. This act addresses many different parts of Zambia’s employment-related legislation, including working hours, leave entitlements, discrimination protections, and minimum working age. You will also want to familiarize yourself with Zambia’s mandatory contributions to the country’s National Pension Scheme Authority, or NAPSA. We will dive deeper into Zambia’s social insurance policies shortly. 

Being aware of these legal requirements is essential for anyone hoping to avoid potential legal problems and build a positive reputation as an employer in Zambia. We recommend starting out by vetting your current employment practices against these regulations.  

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Step 1: Define Your Hiring Needs

As you begin the hiring process in Zambia, understanding both your company’s short-term and long-term goals is essential. For instance, you might ask yourself whether you are hoping to establish a small team tasked with managing local operations or looking to initiate a larger-scale hiring process. Answering such questions will help guide your big-picture recruitment strategy.

On a more micro- level, it is also important to clearly delineate the roles you need to fill. What skills do these roles require? How many employees will you need? What specific qualifications and experience are relevant or necessary for each distinct position? Determining these criteria in advance will help with your efforts to write job descriptions, set salary ranges, and more. You will be better equipped to find strong candidates and ensure those candidates correspond with your organization’s overall goals in southern Africa. 

Step 2: Familiarize Yourself with Compliance Requirements

Understanding the labor laws, tax obligations, and mandatory benefits offered in Zambia is essential. As we mentioned earlier, Zambia’s labor laws are primarily governed by the Employment Code Act No. 3 of 2019. This act includes virtually all of Zambia’s legislation as relates to working relationships and the responsibilities of both employers and employees. Within Employment Code Act No. 3, you will find law addressing topics like pension contributions, leave entitlements, working hours, minimum wage, anti-discrimination regulations, child labor restrictions, and more. 

Understanding the Zambian social insurance system is also crucial if you plan on doing business in this African nation. Employers in Zambia are responsible for paying additional costs on top of gross salary, which cover various social contributions. The main employer costs include pension and health care contributions. Employers must pay 5% of an employee’s gross salary to NAPSA, Zambia’s National Pension Scheme Authority. They also pay an additional 1% to the country’s National Health Insurance (NHI) Management Authority. Finally, employers are responsible for a 0.5% skills development levy for each employee. Employees match employer contributions to both NAPSA and the NHI Management Authority. 

Any savvy businessperson or investor also understands how important it is to familiarize yourself with a country’s tax code before doing business there. Personal income tax in Zambia is assessed on a progressive scale with tax rates ranging from 0% to 37%.

Employers are responsible for deducting the appropriate amount of tax from each employee’s salary. They must report these withholdings to the Zambian Revenue Authority (ZRA) and remit the withheld taxes to the ZRA on or before the 10th of each month during which the deduction was made. As for corporate taxes, the standard CIT rate in Zambia is 30%. That said, a number of industries are exceptions to this rule and pay lower amounts in taxes. 

Step 3: Choose Your Hiring Method

The next step in hiring employees in Zambia? You will need to choose the best hiring method for your needs. Will you establish a legal entity in Zambia, use a Zambian Employer of Record (EOR), or hire independent contractors? Each option comes with pros and cons. 

Establishing a Legal Entity

You may choose to establish a local company in Zambia, which will give you full control over hiring and operations. However, this option comes with considerable overhead costs, lots of administrative responsibilities, and long-term commitment. Therefore, establishing a legal entity is normally reserved for organizations that are planning to establish a permanent presence in Zambia. If you do not have the time or resources to jump through a series of administrative hoops, establishing a legal entity may not be the right option for you. 

When setting up a legal entity in Zambia, companies will be required to complete a long and expensive registration process. The first step toward establishing a legal entity in Zambia is registering with the Patents and Companies Registration Agency, or PACRA. You will need to choose an available name, prepare key documents, file your documentation with PACRA, and register to pay taxes through the Zambia Revenue Authority (ZRA). The required documentation depends on which type of Zambian company you choose to create.

You will also have to pay some fees along the way. To submit your name reservation paperwork, you will need to pay K120. Remember, Zambia’s currency, the Kwacha, is equal to 0.044 USD. When you register with PACRA, you will pay a fee equivalent to 2.5% of nominal capital. It is also worth noting that a physical office is required to register your company as a legal entity in Zambia. That means you must also think about ongoing costs like office rent, utilities, and internet. For these reasons and others, using an EOR can often prove more cost-effective than setting up your own legal entity. Why? Working with an EOR eliminates expenditures relating to facilities, utilities, and legal consultants.

Using an Employer of Record (EOR)

An employer of record, often abbreviated as simply EOR, is an organization that serves as the legal employer for your Zambian hires on your behalf. They manage contracts, payroll, taxes, and ensure local compliance. This is often the fastest and most efficient way to hire in Zambia without opening a local entity. Plus, an Employer of Record can even help you with the recruiting process, ensuring that your hiring methods conform to regional norms, allowing you to attract top talent in Zambia. 

Learn more about EOR in Zambia

Hiring Independent Contractors

For short-term or project-based work, hiring freelancers can be a cost-effective option. Also called independent contractors, freelancers are often employed by a few different companies and may not be entitled to the same social insurance and contribution requirements that full-time employees are granted.

Freelance employees are normally not subject to the same level of management as a traditional employee would be. They often set their own schedules, work remotely, and keep flexible hours.

You will likely have less control over independent contractors than you would over regular employees, which can be a drawback in some cases and a benefit in others. Still, it is important to avoid misclassifying contractors as employees, as this practice can result in penalties. 

Step 4: Develop a Recruitment Strategy

The next question to ask yourself is, how am I going to find the right talent for this job? To begin with, you need to write an effective job description that is aligned with local market expectations. English is Zambia’s official language, and it is the one most frequently used for business purposes. Though there are other local languages, you will want to write your Zambian job description in English. You’ll also want to make sure the job description aligns with local anti-discrimination codes.

Another factor to consider is where you post your job. Major job boards like LinkedIn, Indeed, and Glassdoor do have a presence in Zambia, although there are some regional options that can help you find niche talent. Some popular choices include Jobberman Zambia, Jobs in Zambia, Zambia Jobs, and CareerJet Zambia. 

REMOTE PEOPLE IMPORTANT TIP 

Want to learn more about effective recruitment methods? Check out our research on strategies for successful hiring, which provide tips for drawing in top-tier candidates.

Our best tip? Work with a Zambian recruitment agency or partner with an EOR experienced in Zambia. These organizations have the local expertise you need to find candidates who are perfect for your unique roles. An experienced EOR can also help you navigate expectations on standard salaries, employment trends, and benefits that will attract potential employees in Zambia. 

Step 5: Conduct Interviews and Assessments

Once you have identified some potential candidates for your position, you’ll want to conduct interviews that adhere to cultural norms. Zambia’s cultural values are centered around the nation’s African heritage and predominantly Christian population, and residents place a high value on family ties, social order, and peaceful interpersonal relationships. Formal, hierarchical structures are common in Zambian workplaces, and respect for elders is crucial. 

As you begin interviewing Zambian job candidates, you will want to make sure that you structure interviews appropriately and assess candidates fairly. Additionally, including written or practical assessments can help you better evaluate a candidate’s readiness to hit the ground running in their new position. 

Step 6: Know the Legal Limitations of Background Checks

Performing background checks in Zambia is considered an important part of the hiring process, as it allows employers to confirm a person’s employment history, academic credentials, and civic information. Employers also often reach out to references provided by the candidate, who can attest to the person’s character and confirm that their skillset is relevant to the position. Checking references and confirming that all provided information is accurate also gives employers some extra peace of mind when bringing a new employee on board. 

Though Zambia’s labor laws do not prohibit criminal background checks, it is generally good practice to get the candidates permission before conducting this type of check. Written permission is even better! 

Step 7: Draft Employment Contracts

Written contracts are mandatory when hiring in Zambia for periods longer than six months. Here are some suggestions for what you should include in said contract: 

  • Names of both parties and their contact information, including addresses
  • Nature of the job, including the duties to be performed, working hours, and any probation period that is applicable
  • Compensation, or the fee/salary to be paid as well as the schedule on which it will be paid (Zambia requires that wages and salaries are remitted on a predictable schedule)
  • Place of work and when the employee is expected to report in person versus virtually
  • Start and end dates, specifying when the work will begin and (if applicable) when it ends. The latter is relevant for fixed-term contracts. 
  • Dispute resolution information is legally required in Zambia. Contracts must include the process by which any dispute between employer and employee will be resolved. 
  • Other terms and conditions such as leave entitlements, notice periods, severance pay, additional benefits, and more

Step 8: Register with Authorities and Set Up Payroll

Before any of your employees begin work, it’s important to complete a few registration steps with the Zambian authorities. Here are the legal must-haves before you onboard employees in the southern African nation of Zambia: 

  • Provide a Job Offer: To begin the employment process in Zambia, you must provide candidates with a formal offer outlining the role, salary, and starting date.
  • Sign a Written Contract: A written contract signed by both parties is required. It should include job title, duties, compensation, working hours, probation period (if any), and termination specifics.
  • Register with the Labor Commissioner: Within 30 days of commencing work under an employment contract, three copies of said contract must be filed with Zambia’s Labor Commissioner office. The job of the Labor Commissioner is making sure that these contracts are legal and reasonable per the country’s laws. 
  • Keep Accurate Records: Employers must maintain records of employment contracts for the duration of the employment. They must retain a copy of the employment contract for no less than five years after the end of the contract. 
  • Register With the Tax Authority: Employees must be registered with the Zambia Revenue Authority before their first payday. It is the responsibility of employers to facilitate this registration process. 
  • Notify Employees of Rights: Employees must be informed of their legal rights, including leave entitlements and grievance procedures.
  • Comply With Health and Safety Regulations: Employers are responsible for maintaining a safe working environment that meets legal standards.

Step 9: Onboard Your New Employees

Onboarding your new employees effectively will help them smoothly integrate into your company’s unique culture. Forbes reports that a strong onboarding strategy will increase employee engagement and retention rates, which will in turn impact customer satisfaction. With that in mind, it’s crucial to design an onboarding process that includes the following:

  • Provide the necessary training and resources
  • Introduce the new team member to peers and key stakeholders
  • Explain company policies, procedures, and expectations
  • Immerse the new hire in the company culture and discuss company values
  • Set clear objectives and goals for the new hire’s role

Key Employment Laws and Regulations

Employment Code Act No. 3 of 2019

The primary labor law to be aware of in Zambia is the Employment Code Act No. 3 of 2019. This important law modernizes and consolidates previous acts that had been accumulated over the years. It addresses many parts of Zambia’s employment-related legislation, including working hours, leave entitlements, discrimination protections, and minimum working age. There are many important sections within this act, and we will break down some key employee rights that it grants to Zambian workers shortly. 

One topic worth mentioning now is the act’s emphasis on non-discrimination policies. In Zambia, discrimination based on gender, age, religion, race, disability, or sexual orientation is prohibited. The Employment Code Act No. 3 of 2019 also raised the minimum working age in Zambia to 15 years, and the minimum working age for hazardous work is now 18 years. 

The third section of the act is perhaps the most robust and important section. It covers topics like types of contracts, prioritizing employment of Zambian citizens, minimum employee benefits, suspension and termination requirements, and more. Part IV is all about wages and payment schedules, and Part V addresses child labor. Part VIII shares important information about employee welfare and minimum health and safety requirements. 

National Pension Scheme Authority (NAPSA)

Workers in Zambia are required to contribute to the country’s National Pension Scheme Authority, or NAPSA. There are over 3.3 million members of NAPSA, and the program is focused on extending social security coverage to all earners in the country. Benefits provided include unemployment coverage, old-age pensions, disability payouts, survivor benefits, and more. Employees and employers contribute in equal measure, each paying 5% of the employee’s gross salary toward the program. 

NAPSA was established in 1996 through an Act of Parliament – specifically, Act No. 40 of 1996. The program replaced the Zambia National Provident Fund (ZNPF) and became operational on February 1, 2000. In the 25 years since, NAPSA has made important changes in response to the fluctuating labor market. All the while, however, it has retained its core goal: creating an efficient social security institution that delivers quality services and contributes to Zambia’s national development and upward trajectory. 

Types of Employment Contracts

Understanding the different types of employment contracts in Zambia is important when hiring in the country. Here are the two most common options: 

Permanent Employment Contracts

Permanent employment contracts are by far the most common option in Zambia. They are ongoing contracts with no set end date, aside from the employee reaching retirement age (the typical retirement age in Zambia is 60 years). Permanent employment contracts may begin with a probationary period of up to three months, although this is not required. 

During the probationary period, the contract can be terminated by either party with no notice requirement. After the three-month probationary period ends, the contract is automatically converted into a permanent contract unless terminated – in Zambia, probationary periods cannot be renewed.

Fixed-Term Employment Contracts

This type of employment contract specifies a start and end date. They normally last for less than one year, and they can be renewed twice. The total duration of a fixed-term employment contract cannot exceed 24 months. Employees working under fixed-term contracts are still entitled to the same benefits as those who are working under a permanent contract, unless they are working part-time, in which case benefit entitlements are reduced. 

Working Hours and Overtime

Standard Working Hours

Zambian employees normally work 48 hours per week, spread across 6 days. Sunday is typically given as a day off. Any hours that an employee works in excess of 48 per week are considered “overtime hours” and require additional compensation. 

Overtime Regulations

Any hours worked in excess of 48 hours per week in Zambia count as overtime. According to Zambian labor laws, overtime must be compensated at 150% of an employee’s regular salary. While most populations are eligible for overtime, Zambian laws have restrictions about pregnant women or women who are nursing children under six months working overtime. These groups are also prohibited from night work. 

Leave Entitlements

Annual Leave

Zambian employees accrue 2 days of paid leave for each month that they work, and they can start using these paid days off after 12 consecutive months of work for an employer. This amounts to an annual paid leave entitlement of 24 days every year. At the end of a 12-month period, employers must pay employees back for any leave not taken – leave does not roll over.

Public Holidays

Zambia’s labor laws entitle employees in the country to certain amounts of paid leave annually. There are also leave regulations for sick leave and maternity/paternity leave. These leave entitlements are in addition to the 13 public holidays in Zambia, which are as follows: 

  • New Year’s Day (January 1)
  • International Women’s Day (March 8)
  • Youth Day (March 12)
  • Kenneth Kaunda’s Birthday (April 28)
  • Easter Weekend (Friday through Monday, date varies)
  • Labour Day (May 1)
  • African Freedom Day (May 25)
  • Heroes’ Day (First Monday in July)
  • Unity Day (Tuesday After Heroes’ Day)
  • Farmers’ Day (First Monday in August)
  • National Prayer Day (October 18)
  • Independence Day (October 24)
  • Christmas Day (December 25)

Sick Leave

How much sick leave employees in Zambia receive depends on the type of employment contract they are working under: 

  • Fixed-Term Contracts: Employees receive up to 52 days of sick leave, with full pay for the first half and 50% pay for the second half.
  • Permanent Contracts: Employees receive up to 6 months of paid sick leave, with 100% pay for the first half and 50% pay for the second half. 

Maternity and Paternity Leave

Female employees in Zambia can take up to 14 weeks of paid maternity leave, at least six of which must be taken after the delivery. In the case of multiple births (twins or triplets), women receive four additional weeks of paid maternity leave. 

Zambia also has legal requirements for paternity leave. Male employees can take paternity leave only after working for the same employee for 12 continuous months. After that time elapses, men can take five working days of paid paternity leave. This leave must be taken within 7 days of the child’s birth. 

Compassionate Leave

Compassionate leave, which is paid leave due to loss of a spouse, parent, child, or dependent, is also legally protected in Zambia. Employees receive 12 days of paid compassionate leave in the calendar year during which the loss occurs. 

Termination and Severance

Notice Periods

In Zambia, there are a few reasons that an employee can be dismissed “summarily” and will not be entitled to notice or severance pay. These reasons include gross misconduct, an employee’s misrepresentation of their skills, habitual or substantial neglect of duties, and continuous absences from work without permission. In all other cases, however, employees are given notice periods that depend on their time in service with the company. 

This table shows the minimum required notice periods in Zambia, although longer notice periods are a common optional benefit negotiated in contracts.

Length of ServiceNotice Period
Less than 1 month24 hours
1 to 3 months14 days
3 to 6 months30 days
More than 6 months30 days, and must be in writing

Severance Pay

The majority of employees who are terminated in Zambia are entitled to severance pay. The amount of severance pay received depends on the length of service and the type of contract.

Fixed-term contracts are required to be terminated with a 25% gratuity of the total amount paid during the contract term.

Permanent contracts offer severance pay equal to 2 months pay per year of service in Zambia. The severance pay is calculated based on the employee’s most recent wage rate or salary. 

Mandatory Contributions

NHI and NAPSA Contributions

Employers in Zambia are responsible for paying additional costs on top of gross salary. These mandatory contributions cover various social programs. The main employer costs include pension and health care contributions. Employers are required to match employee contributions to the National Pension Scheme Authority (NAPSA), with a maximum monthly cap of K1,490.80. Both employees and employers contribute 5% to NAPSA. Employers also pay 1% of the employee’s salary toward the National Health Insurance (NHI) Management Authority. Additionally, employers are responsible for a 0.5% skills development levy for each employee. 

Employees also contribute a portion of their salary through deductions for taxes and social insurance. Like employers, employees contribute 1% to the NHI Management Authority and 5% to NAPSA. Zambia also imposes pay-as-you-earn income tax deductions, which the employer must manage, withhold, and remit to the Zambia Revenue Authority.

13th Month Pay

Zambia’s labor laws do not require employers to pay out a 13th month bonus or implement other bonus structures. Any bonus payments are typically outlined in employment contracts or agreed upon at the company level, and they can be used as an optional benefit to sweeten the deal when your company is looking to hire top talent. 

Optional Benefits

In addition to the country’s suite of mandatory benefits, many employers in Zambia choose to offer supplemental benefits to attract top-tier applicants.

Offering additional benefits outside of what is legally required can help encourage more people to apply for your job, meaning you will have the best chance of finding the candidate who fits your role best. Plus, a strong benefits program can even increase your company’s average employee retention time. 

Here are some common optional benefits we have seen employers offer in Zambia: 

  • Private health insurance
  • Holiday bonuses
  • Life insurance
  • Transportation, phone, or vehicle allowances
  • Additional paid leave
  • Better severance payment or longer notice periods
  • Performance-based bonuses
  • Family-related benefits

How to Hire Employees in Zambia – Our Take

When you are hiring employees in Zambia – or any foreign country, for that matter – you will have to work with a complex set of legal requirements, including labor laws, mandatory contributions, and employee protections set in stone by civic codes. Being familiar with these regulations and ensuring you are complying with the country’s legal considerations is crucial for avoiding lawsuits and building a positive reputation in Zambia. 

If juggling these requirements on your own sounds daunting, working with an Employer of Record (EOR) in Zambia can simplify the process, saving you time, money, and effort at every step along the way.