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Zambia is one of the countries located in the south-central part of Africa, with about 19 million people.
Zambia is one of the countries located in the south-central part of Africa, with about 19 million people. There is much to love about Zambia, including its wildlife. Zambia relies on copper and cobalt as its main exports from an economic perspective. Additionally, copper mining, construction, foodstuffs, beverages, chemicals, agriculture, fertilizer, and textiles are the primary industries in Zambia.
According to the World Bank, Zambia's labour force was approximately 7.8 million in 2021. Therefore, employers can hire many talents and skills from this excellent African country. However, hiring and paying remote workers in Zambia can be challenging for most international employers, especially those who aren't familiar with employment, payroll, tax, and other requirements in the country. Here is a complete guide on hiring and paying remote employees and independent contractors in Zambia.
Searching for talents and skills is not a simple step. Hiring is also not as straightforward. Working with remote workers comes with some primary concerns you must address before and after hiring. For instance, you must employ them compliantly and adhere to tax requirements. Here is a simple step to follow when hiring remote employees or independent contractors.
Employers should pay attention to the type of remote worker they want to work with because each country has its guidelines on worker classification. There is a risk of misclassification of employees in foreign countries. It would be best if you didn't treat an independent contractor as a remote employee and vice versa.
Independent contractors, often known as remote self-employed people, remote contractors, or freelancers, are non-employees. Independent contractors provide short-term and contractual services to companies or employers according to their processes and methods. They are also allowed to work remotely, depending on the nature of the job.
Additionally, independent contractors declare their earnings and file their taxes.
A remote employee works outside of a traditional office or workplace environment. It may mean employees are working from their homes, local co-working spaces, coffee shops, or other places. Generally, remote employees are like other employees, only that they work remotely.
Therefore, as you can see, there is a thin line between remote employees and independent contractors; thus, there is a need for proper classification. The main difference is that remote employees are on the employer's or company's payroll and have a long-term relationship. On the other hand, independent contractors define their pay according to what they deliver and have a short-term relationship with a client.
There are several ways you can hire remote employees in Zambia, as outlined below:
One way to hire compliantly remote employees in Zambia is by setting up a subsidiary in Zambia. If you're a foreign employer who wants to acquire talents from Zambia, establishing an entity in Zambia will allow you easy access to its labour force.
However, this process can be expensive, time-consuming, and complex. It starts with getting a physical space, registering your entity with the necessary authorities in Zambia, and setting up a local payroll.
Suppose you're a potential employer who doesn't have the energy, time, and resources to execute the first alternative, i.e., setting up a subsidiary. In that case, you should consider using Employer of Records (EOR) services. The primary function of an EOR is to hire and pay employees on behalf of another company or employer. For instance, Workpay is an EOR provider that helps employers hire remote employees in Zambia and other African countries.
Additionally, an EOR deals with the regulatory hurdles, including tax requirements on your behalf. Therefore, it saves you time and money, yet remote workers remain your employees. Apart from getting full legal compliance, you also get access to various skilled and talented remote employees. Most importantly, there is no risk of misclassification of remote workers.
Unlike hiring remote employees, hiring independent contractors is much easier. However, it still requires one to pay attention during the process. Employers have various options when hiring independent contractors, as outlined below.
If you're an employer who has an existing relationship with a contractor, you might opt to engage the independent contractor directly without involving any other party. However, it requires a high level of trust between the two parties.
Additionally, both parties should have an explicit agreement (signed contract, NDA, or service agreement). Most importantly, employers should consider local regulations where an independent contractor resides because labour laws differ from country to country.
It would help to discuss how you would process payments after delivering services with the contractor in a direct engagement.
A significant disadvantage of this method is a failure of payment or performance: it leads to conflicts between the parties and, to some extent, termination of contracts.
An umbrella company is a third party that acts as an intermediary between the company (an employer) and the contractor or contractor's agency. Its primary goals are to ensure local compliance for the contractors, timely payments, and performance satisfaction.
Usually, an umbrella company handles the administrative roles (similar to an employer) but doesn't interfere with the contractor's independence. The goal is to ensure contract assurance for both parties.
Using an umbrella company is best when working with a new contractor or when a contractor doesn't want to handle their own invoicing.
GEO service is the best option for employers who don't want to deal with the risk involved in hiring independent contractors from other countries. GEO allows you to hire contractors as employees through an Employer of Record (EOR), i.e., hiring independent contractors as workers using a local EOR.
Usually, an EOR will handle everything from hiring, compliance, and payroll on your behalf as an employer at a fee. However, you'll have a direct relationship with the remote contractors. For example, you can use Workpay to hire remote contractors in Zambia.
Paying remote workers in Zambia is different: Zambia has its employment and payroll standards. Therefore, employers must understand various aspects, including local payroll and tax laws in Zambia, especially when you have a direct engagement with independent contractors or remote employees. However, if you're using an EOR service provider, you don't have to worry about local laws and compliance issues.
Additionally, you'll have to determine the best way to pay international remote employees and independent contractors.
You can pay remote workers in Zambia through direct deposits and banks transfer. International employers can utilize the SWIFT services to make such transfers to remote employees or independent contractors residing in Zambia. You need the recipient's bank account details and SWIFT/BIC code.
The only downside of this method is that it may take several business days to process. Additionally, exchange rates are critical while doing international bank transfers.
Banks that allow sending and receiving money internationally in Zambia include ABSA Bank Zambia, Ecobank Zambia, Cavmont Bank, Access Bank Zambia, UBA Zambia, etc.
Various payment processing providers support money transfers in Zambia. Some providers even allow you to directly transfer payments to your remote employees' and contractors' bank accounts. Most importantly, this payment method is super-fast and effective for remote work due to the enhanced user experience.
Zambia's top payment processing providers are Xoom, Skrill, WISE, Monito, Payoneer, and WorldRemit.
Another excellent option is to transfer payments to your remote teams internationally through international money transfer services like Western Union, MoneyGram, Ria Money Transfer, and Unimoni. Usually, these companies charge less than banks to transfer money internationally.
As highlighted above, an EOR service provider handles everything from hiring to paying remote workers on your behalf. If you don't want to deal with payroll and tax requirements in Zambia while working with remote employees or contractors, consider using EOR services.
Are you an employer in any part of the world who want to build or grow your remote team around Africa? Do you want to hire remote workers easily without handling complex legal and compliance restrictions? Workpay is the solution!
Workpay enables you easily hire remote workers in most African countries, from the North African Region, East Africa, and the Southern parts of the African continent.
Workpay guides you through the hiring and paying process with the help of seasoned legal experts who understand African countries' employment and labour laws.
Workpay helps you handle payroll for your remote teams across Africa. Additionally, our system is user-friendly, making the entire process easy to handle.
Through Workpay's EOR services, you can legally access some of the best skills remotely. Consequently, working with them will enhance your product and boost your revenue.
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Workpay is a HR and Payroll software company that offers time & attendance, payroll, human resource, leave, expenses and remote teams solutions to businesses across Africa.
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