Employer of record in Botswana
Employer of record in Botswana
Employer of record in Botswana
Employer of record in Botswana
Botswana is a landlocked country in Southern Africa with a growing economy, largely driven by mining, especially diamond production, and services. The country has seen consistent GDP growth in recent years and is focusing on diversifying into sectors such as agriculture, tourism, and renewable energy. Botswana also benefits from a relatively young and educated workforce, which plays a crucial role in its ongoing development.
Employee Benefits
Work Permit: Under the Employment of Non-Citizens Act, Botswana issues a single work permit for all foreign employees. Employers cannot hire foreign workers without a valid work permit or exemption certificate. The Immigration Board determines the validity period for work permits.
Paid Time Off:
- Annual Leave: 15 working days after one year of employment for full-time employees.
- Sick Leave: 20 days per year with a doctor’s certificate.
- Maternity Leave: 12 weeks (6 weeks before and 6 weeks after delivery) with half of the base wage. A doctor’s certificate is required.
- Paternity Leave: No statutory paternity leave.
- Family Leave: 3 days per year for family responsibilities (e.g., illness, birth, or death of a family member) for employees working at least four days a week and with over four months of service.
- National Holidays: 8 public holidays, paid.
- Other Paid Time Off: Not applicable.
Statutory Employee Benefits:
- Unemployment: No unemployment benefits. The Ipelegeng Unemployment Relief program provides short-term work for unemployed citizens.
- Severance Pay: Available for employees with 60 months of continuous service.
- Workers Compensation: Covers injuries or diseases contracted at work, including death, with the employer covering the full cost.
- Social Security: No national social security insurance, but there is a voluntary retirement fund (BPOPF).
- Retirement Fund: Contributions from both employer (15%) and employee (5%) to a pension program, with optional additional contributions.
- Health Care: Free healthcare for all residents, with some charges for non-essential services.
Private Employee Benefits:
- Workers Compensation: Available in the private sector.
- Retirement: Private retirement schemes available.
- Health Insurance: Available privately.
- Insurance: Private life insurance options available.
Personal Income Tax:
- Tax Year: 1st July to 30th June.
- Tax Individuals: Resident individuals
Tax Rates for Residents:
| Taxable income (BWP) | Tax on column 1 (BWP) | Tax on excess (%) | |
| Over | Not over | ||
| 0 | 48,000 | 0 | 0 |
| 48,000 | 84,000 | 0 | 5 |
| 84,000 | 120,000 | 1,800 | 12.5 |
| 120,000 | 156,000 | 6,300 | 18.75 |
| 156,000 | 13,050 | 25 | |
Tax Rates for Non-Residents:
| Taxable income (BWP) | Tax on column 1 (BWP) | Tax on excess (%) | |
| Over | Not over | ||
| 0 | 84,000 | – | 5 |
| 84,000 | 120,000 | 4,200 | 12.5 |
| 120,000 | 156,000 | 8,700 | 18.75 |
| 156,000 | 15,450 | 25 | |
Taxation Method: Annual calculation, applied to monthly payroll.
Double Taxation Agreements: Botswana has multiple agreements in place.
Tax Credit: Provided for taxes paid abroad under DTA agreements.
Payroll Elements:
- Income: Includes salary, bonuses, overtime, taxable benefits, allowances, and other earnings.
- Bonuses: Not mandatory but may be part of compensation.
- Allowances: Expatriate allowances are taxable, including living and housing allowances.
- Benefits in Kind: Includes value of non-cash benefits like accommodation or vehicle usage, taxable as income.
Investment Income: Capital gains, dividends, and interest income are taxed based on their source in Botswana.
- Capital gains: 0% – 25%
- Dividend income: 10% for residents
- Interest income: Tax-exempt up to BWP 7,800, then 10% withholding tax
- Royalties: 15% withholding tax for commercial royalties paid to non-residents.
Payroll Taxes and Employer Contributions:
- Payroll Taxes: No national social security system.
- Workers Compensation: Employer bears the full cost of compensation for work-related injuries or diseases.
Administration:
- Income Tax Filing: Employees must file a tax return if their annual income exceeds BWP 48,000.
- Employer’s Responsibility: Employers must deduct tax at source through PAYE and ensure proper tax filing by employees.
Severance and Benefits:
- Severance Pay: Provided to employees after 60 months of continuous service.
- Health Care: Free healthcare available for all residents.
- Employee Benefits: 15 days paid annual leave, 8 national holidays, and 12 weeks maternity leave.
