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How To Hire New Remote Employees | Lesotho

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Lesotho

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Lesotho

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Lesotho

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capital city
Lesotho
currency
Lesotho Loti (LSL)
language spoken
English and Sesotho
payroll frequency
Monthly
employer taxes
0%
vat - standard rate
15%
cost of living index
Low ($668)
gdp - real growth rate
per capita- $1,227.37
termination process
Difficult
employee protections
Strict
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vat - standard rate
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cost of living index
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employee protections
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Overview

Lesotho has a population of 2.16 million people. It is ranked number 47 in Africa according to the nominal GDP ($ 2.48 Billion). Lesotho has a market economy, even though direct government involvement is active.

Public Holidays

1 January- New Year's Day

11 March- King Moshoeshoe I's Anniversary

15 April- Good Friday

18 April- Easter Monday

1 May- International Workers' Day

25 May- Africa Day

25 May- Heroes' Day (in Lesotho)

26 May- Ascension Day

17 July- King Letsie III's Birthday

4 October- Independence Day (of Lesotho)

25 December- Christmas Day

26 December- Boxing Day

Minimum wage

Lesotho’s minimum wage is 1178 to 1285 maloti depending on the sector. These rates are set annually by Lesotho’s government.

Payroll cycle

Wages can be paid daily, weekly, or monthly, depending on the type of employment contract:

Wage payment is made on a daily basis under a piece-rate contract.

If the contract is for less than a month, the wage is paid weekly; if the contract is for more than a month, the wage is paid monthly.

Wages are typically paid solely in legal money. On mutual agreement, the employer may provide partial remuneration in the form of food or a place to live in addition to monetary wages. Wages must be paid on working days, at or near the place of employment.

Taxation

The resident individual tax rates vary depending on annual income as follows; 

20% - for M 1.00-64, 200.00 

30% - for above M 64,200.00

Lesotho’s personal income tax is averaged at 30 percent. According to section 107(1), 25% withholding taxes are imposed on the country’s source dividends, interest payments, royalties, natural resource payments, or non-resident management charges.

The income tax is paid through the Pay As You Earn (PAYE) system computed using the personal income tax rates. 

Leaves

Female employees that have worked for two years in the same organization are liable to 12-week payable maternity leave. Six weeks are taken before the child’s birth date and six after the child’s birth. The employer pays 100% of the salary.

Termination process

An employment contract can be terminated when the contract period ends if fixed for a certain period by the employer or the employee. In the case of gross misconduct, an employment contract can be terminated without notice.

Notice Period

Lesotho's notice period follows the following guidelines:  

  • 7-day notice for less than six month’s service
  • 14 days for less than a year of service
  • One-month notice for more than a year of service
  • Three-month notice for more than ten years of service
  • Indefinite periods depends on the employee tenure and salary payment intervals

The guidelines are also applicable when the employee initiates the contract termination.

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