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Ensure tax compliance when hiring employees from Lesotho. Discover tax laws, income brackets, and withholding tax rates. Partner with Workpay, Africa's leading EOR service provider, for hassle-free payroll processing and expert guidance on local labor practices. Stay compliant and simplify your hiring process in Lesotho
Venturing into new markets for employees is becoming a trend among business owners. Many talented potential employees are ready to use their skills to help companies grow. Africa is becoming a hub for sourcing employees, and Lesotho is a good place for business owners to start.
However, with hiring workers from Lesotho comes the responsibility of compliance. Business owners must understand the tax and labour laws and compliance requirements. Failure to meet these regulations leads to penalties and other legal action.
So what are the various tax laws and compliance requirements in Lesotho? The information below provides detailed answers to this.
The following are the types of income tax charged within the county:
Companies looking to join the Lesotho employee market must comply with the tax requirements per the income brackets. Below is a breakdown of tax rates in the county for personal income tax and withholding tax.
As per the tax act, an individual's taxable income is subject to a progressive two-rate system of 20% and 30%. These rates are subject to potential changes through amendments made by the parliament. The tax structure for the 2022/2023 financial year is determined as follows:
Per Lesotho's Revenue Authority, applicable tax rates for withholding tax are three:
Some of the penalties employees and employers may face for non-compliance with tax laws in Lesotho include the following:
The first and most convenient way a foreign company can ensure they meet the tax laws and compliance requirements is by partnering with an EOR or employer of record. The EOR becomes the third-party intermediary between the company and the employee.
The EOR takes responsibility for compliance with tax laws and labour regulations in the local country. So, it means that the EOR handles tax withholding, payroll processing, and other employee-related tasks for employees in Lesotho.
The foreign company will not have to worry about handling these tasks and is guaranteed compliance thanks to the EOR.
Another key advantage of using an EOR is access to expert knowledge on local labour practices. The EOR ensures that the foreign company understands Lesotho's labour practices, saving them time and resources in navigating the complex differences.
Employers looking to hire from Lesotho must pick an excellent EOR with vast experience and notable success. Workpay is Africa's leading EOR service provider, handling compliance, payroll, and HR needs effectively. The EOR service provider helps with visas and work permits as a valuable local expert who helps companies avoid tax and labour law penalties.
Foreign companies should do the following to avoid penalties for non-compliance:
Achieving all this is more straightforward and less strenuous with a reliable EOR service provider like Workpay.
With the increasing trend of business owners venturing into new markets for employees, Lesotho is a good country to source talented employees. However, hiring workers from Lesotho is responsible for compliance with tax and labour laws.
Failure to comply with these regulations leads to penalties and other legal actions. Employers are encouraged to partner with an EOR, which becomes the third-party intermediary between the company and the employee, to ensure compliance with tax laws and labour regulations.
Workpay is Africa's leading EOR service provider that can help employers navigate complex differences and ensure compliance. Reach out today to learn to get started.
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