Employer of record in Mozambique
Mozambique is a beautiful country located in southeastern Africa, known for its abundant natural resources, rich biological and cultural diversity, and tropical climate. With a vast coastline along the Mozambique Channel, which divides mainland Africa from Madagascar, the country boasts some of the finest natural harbors in Africa.
Employee Benefits
Holidays
- 1 Jan New Year’s Day
- 2 Jan New Year Holiday
- 3 Feb Heroes’ Day
- 7 Apr Women’s Day
- 1 May Workers’ Day
- 25 Jun Independence Day
- 26 Jun Independence Day Holiday
- 7 Sep Lusaka Peace Agreement Day
- 25 Sep Armed Forces Day
- 4 Oct Peace and National Reconciliation Day
- 25 Dec Family Day
Annual Leave
Employees are entitled to 12 days of paid annual leave in the first year of employment and 30 days per year thereafter.
Maternity Leave
Maternity leave is extended to 90 days, with the first 60 days paid by the INSS and the remaining 30 days unpaid.
Paternity Leave
Fathers are entitled to seven days of unpaid paternity leave within an 18-month period. In the event of the mother’s death or disability, paternity leave is extended to 60 days.
Probation Period
The probationary period is limited to 90 days. During this period, either party can terminate the contract without notice or severance.
Sick Leave
Employees are entitled to sick leave with pay for up to 90 days per year. Beyond this period, the employee may be entitled to a disability pension.
Immigration
Employers must obtain work permits for foreign employees. The law sets quotas for foreign workers, varying by company size. For companies with up to 10 employees, the quota is 15%; for those with 11 to 30 employees, 10%; for 31 to 100 employees, 8%; and for over 100 employees, 5%.
Severance
Upon termination without just cause, employees are entitled to severance pay calculated as follows:
- 30 days’ salary per year of service for employees earning up to seven times the sector minimum wage.
- 15 days’ salary per year for those earning between seven and 18 times the minimum wage.
- Five days’ salary per year for those earning more than 18 times the minimum wage.
Income Tax
Employees are subject to personal income tax (IRPS) on their earnings, with rates ranging from 10% to 32%. Employers are responsible for withholding and remitting these taxes to the tax authorities.
Social Security
Employers and employees are required to contribute to the National Institute of Social Security (INSS). The employer’s contribution is 4% of the employee’s gross salary, while the employee contributes 3%. These contributions fund benefits such as pensions, disability, and maternity leave.
Value Added Tax
The standard VAT rate is 17%. Employers must register for VAT if their annual turnover exceeds the threshold set by the tax authorities.
Termination
Termination of employment can occur by mutual agreement, expiration of a fixed-term contract, or dismissal with just cause. Dismissal without just cause requires payment of severance.
Notice Period
For indefinite-term contracts, the notice period for termination is 30 days for employees with less than one year of service, and 60 days for those with one year or more. For fixed-term contracts, the notice period is 15 days.
