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.

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.

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

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.

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

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

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.

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