Employer of record in Benin
Employer of record in Benin
Employer of record in Benin
Employer of record in Benin
Benin is a West African country with a developing economy, largely driven by agriculture, particularly cotton production, and services. The country has experienced steady GDP growth in recent years and is making efforts to diversify into sectors like manufacturing, infrastructure, and renewable energy. Benin also benefits from a youthful population, which supports its economic development.
Employee Benefits
Paid Time Off
Annual Vacation:
Employees are generally entitled to 24 paid vacation days per year after completing one year of service. This increases based on tenure as follows:
- After 20 years: 2 additional days
- After 25 years: 4 additional days
- After 30 years: 6 additional days
Sick Leave:
Sick leave entitlements are determined by the length of service with an employer:
- 12 months of service: One month of full sick leave
- 1-5 years of service: Three months of full sick leave, followed by an additional three months of half-paid sick leave
Maternity Leave:
Female employees are entitled to six weeks of paid leave before and eight weeks after childbirth. The employer covers half of the leave, with social insurance covering the remainder.
Paternity Leave:
Fathers are typically entitled to three days of paid paternity leave.
Public Holidays:
Benin has 13 paid public holidays per year.
Other Paid Time Off:
None.
Statutory Employee Benefits
Unemployment Benefits:
There is no specific unemployment fund in Benin. However, employers are required by law to provide severance pay to employees dismissed after at least one year of service, as long as the dismissal is not due to serious misconduct. The severance pay is calculated based on a percentage of the employee’s monthly salary for each year of service.
Workers’ Compensation:
Employers must contribute between 1% and 4% of the gross monthly payroll for work injuries, depending on the risk level. Employers with 20 or more employees make monthly contributions, while those with fewer employees contribute quarterly.
Social Security:
Employees contribute 3.6% of their gross monthly earnings, or 10% of their last gross salary if voluntarily insured. Employers contribute 6.4% of the gross monthly payroll to social security and 9% towards family allowances.
Retirement Benefits:
Social security provides retirement benefits in Benin.
Health Care:
Benin aims for universal healthcare but currently operates under a mixed public and private system.
Private Employee Benefits
Workers’ Compensation:
Currently unavailable for private workers.
Retirement:
Some private pension schemes are available in Benin.
Health Insurance:
Private healthcare options are available.
Insurance:
Life insurance is available for employees in Benin.
Personal Income Tax
Tax Year:
The tax year in Benin follows the calendar year.
Income Tax Rates:
Individual income tax rates in Benin are progressive, ranging from 0% to 30%:
| Individual income tax | Progressive annual rates range from 0% to 30% |
| Less than XOF 60,000 | 0% |
| Between XOF 60,001 and 150,000 | 10% |
| Between XOF 150,001 and 250,000 per year | 15% |
| Between XOF 250,001 and 500,000 per year | 20% |
| More than XOF 500,000 per year | 30% |
Taxation Method:
Benin uses a progressive taxation system.
Double Taxation:
Benin has several double taxation agreements with other countries.
Tax Residency:
A person is considered a tax resident in Benin if they meet any of the following conditions:
- They have a permanent residence in Benin
- They stay in Benin for over 183 days in a tax year
- They work or receive income from Benin
If an individual meets these criteria, they are required to pay taxes on their worldwide income. Non-residents earning income from Benin may also be taxed on that income, depending on tax treaties.
Payroll Calendars:
Employees are not required to be paid on a specific schedule. Payroll can be weekly, biweekly, fortnightly, or monthly.
Rebates & Tax Credits:
The first XOF 60,000 of income is tax-free. Social security contributions are also deductible, and tax deductions are available for dependent children:
- 0% for one dependent child
- 5% for two dependent children
- 10% for three dependent children
- 15% for four dependent children
- 20% for five dependent children
- 23% for six or more dependent children
Payroll Taxes and Employer Contributions
Payroll Tax:
Employers must pay a payroll tax of 4% on the gross salary, wages, allowances, and in-kind benefits provided to employees.
Severance Pay:
Employers are required to provide severance pay to employees who are dismissed after at least one year of service, based on the number of years worked.
Social Security Contributions:
Employers contribute 6.4% of the monthly covered payroll toward social security, and an additional 9% toward family allowances.
Workers’ Compensation and Insurance
Workers’ Compensation:
Currently, private workers’ compensation is unavailable, but public benefits are provided for work-related injuries, offering benefits for temporary and permanent disabilities.
Health Insurance:
Benin operates a mixed public-private healthcare system.
Taxable Income
Taxable Earnings:
Employees are taxed on salaries, bonuses, commissions, and other forms of compensation.
Allowable Deductions:
Deductions are available for dependent children, reducing the taxable amount as follows:
- 0% for one dependent child
- 5% for two dependent children
- 10% for three dependent children
- 15% for four dependent children
- 20% for five dependent children
- 23% for six or more dependent children
Legislation and Statutory Bodies
Key Legislation:
- Constitution of the Republic of Benin (1990)
- Labor Code (1998)
- Code of Social Security (2003)
Statutory Bodies:
- Ministry of Labor, Public Service, and Social Security
- National Labor Council
- Labor Inspectorate
- National Social Security Institute
- National Employment Agency
