Zambia, a landlocked nation in Southern Africa, has become a growing hub for trade, mining, and energy investment. With its stable governance, skilled labor force, and expanding infrastructure, the country offers compelling opportunities for global businesses seeking to expand into the region. However, understanding Zambia’s employment regulations and compliance obligations can be complex for foreign employers. Partnering with an EOR Zambia (Employer of Record) provider allows companies to legally hire and manage employees in the country without setting up a local entity, ensuring efficiency, compliance, and strategic flexibility.
Understanding the Employer of Record (EOR) Model
An Employer of Record (EOR) is a third-party organization that legally employs workers on behalf of a client company. The EOR assumes all administrative, legal, and compliance responsibilities related to employment, while the client company directs the employee’s daily work and performance.
Key functions of an EOR in Zambia include:
- Drafting and managing legally compliant employment contracts.
- Processing monthly payroll and ensuring statutory deductions.
- Registering employees with local tax and social security authorities.
- Administering benefits and leave entitlements.
- Managing visa and work permit applications for expatriates.
- Handling compliant employee offboarding and termination procedures.
This model allows global employers to enter Zambia’s market rapidly and compliantly without the financial and administrative burden of establishing a subsidiary.
Zambia’s Economic and Labor Market Overview
Zambia’s economy is largely driven by mining, agriculture, and energy, with diversification into technology and logistics accelerating in recent years. The country’s membership in both the Southern African Development Community (SADC) and Common Market for Eastern and Southern Africa (COMESA) provides regional trade advantages.
Key economic and workforce highlights include:
- Steady growth: GDP growth is projected to average 4% annually, supported by copper exports and energy investments.
- Demographic advantage: With over 60% of its population under 25, Zambia offers a young and trainable workforce.
- Skilled labor: The country boasts a growing pool of professionals in mining engineering, finance, and information technology.
- Regulatory reforms: Recent government efforts have focused on improving the ease of doing business and digitizing tax compliance.
- Currency and stability: The Zambian kwacha (ZMW) remains relatively stable, supported by central bank interventions and increasing foreign investment.
Despite these strengths, navigating Zambia’s employment regulations requires a thorough understanding of local labor law—making EOR solutions essential for compliant workforce management.
Employment Law Framework in Zambia
Employment relationships in Zambia are governed primarily by the Employment Code Act No. 3 of 2019, which consolidates previous labor statutes into a unified legal framework. The Act provides detailed provisions on employment terms, termination, wages, and benefits.
Employment Contracts
- All employees must have a written employment contract specifying job title, wages, and conditions of employment.
- Contracts can be permanent, fixed-term, or casual, depending on the nature of work.
- Probationary periods are permitted but must not exceed three months.
- Employment contracts must comply with Zambia’s minimum wage and labor laws, and can be drafted in English, the official business language.
Working Hours and Overtime
- The standard workweek in Zambia is 48 hours, typically 8 hours per day over six days.
- Overtime is permitted but must not exceed 12 hours per week.
- Overtime pay is calculated at 150% of the regular hourly rate and 200% on public holidays or rest days.
Leave Entitlements
- Annual leave: Employees are entitled to 24 working days of paid leave per year after completing 12 months of service.
- Public holidays: Zambia observes 11 national holidays, including Independence Day and Labour Day.
- Sick leave: Employees receive up to 26 weeks of paid sick leave (full pay for the first 3 months and half pay for the next 3).
- Maternity leave: 14 weeks of fully paid leave, with an additional four weeks in case of complications.
- Paternity leave: 5 working days for male employees.
Termination and Severance
Termination in Zambia must follow due process under the Employment Code Act.
- Notice periods:
- 1 day for employees under probation.
- 14 days for employees with contracts less than 3 months.
- 30 days for contracts between 3 and 12 months.
- 2 months for contracts exceeding one year.
- Severance pay: Required for redundancy, retrenchment, or unfair dismissal. Employers must pay 2 months’ basic pay per completed year of service.
- Certificate of service: Employers must issue this document upon termination to confirm employment history.
An EOR Zambia provider ensures these rules are followed precisely, minimizing compliance risks for global employers.
Payroll and Tax Compliance in Zambia
Payroll management in Zambia requires strict adherence to tax and statutory contribution requirements.
Payroll Structure
- Currency: Zambian Kwacha (ZMW)
- Payroll frequency: Monthly
- Tax year: January 1 to December 31
Personal Income Tax (Pay-As-You-Earn – PAYE)
Income tax in Zambia follows a progressive rate structure, administered by the Zambia Revenue Authority (ZRA).
| Monthly Income (ZMW) | Tax Rate |
|---|---|
| 0 – 5,100 | 0% |
| 5,101 – 6,100 | 20% |
| 6,101 – 8,900 | 30% |
| Above 8,900 | 37.5% |
Employers must withhold PAYE taxes from employee salaries and remit them to the ZRA by the 10th of the following month.
Social Security Contributions
All employers and employees are required to register with the National Pension Scheme Authority (NAPSA).
| Contribution Type | Employer (%) | Employee (%) |
|---|---|---|
| NAPSA | 5% | 5% |
Contributions are calculated on the employee’s gross monthly earnings, up to a prescribed ceiling.
Other Statutory Contributions
- National Health Insurance Management Authority (NHIMA): Both employer and employee contribute 1% of gross pay.
- Skills Development Levy (SDL): Employers contribute 5% of the total payroll to support workforce training programs.
An EOR provider manages all these deductions and submissions, ensuring timely compliance and audit readiness.
Advantages of Using an EOR in Zambia
Partnering with an Employer of Record enables businesses to overcome administrative, legal, and logistical barriers to workforce expansion.
- Rapid Market Entry
An EOR enables companies to hire employees in Zambia within weeks—bypassing the lengthy process of company registration and licensing. - Full Legal Compliance
EORs stay updated on Zambia’s evolving labor and tax laws, reducing the risk of non-compliance or penalties. - Cost Savings
Avoiding entity setup and maintenance significantly reduces costs related to legal, HR, and accounting infrastructure. - Payroll and Tax Accuracy
EORs manage payroll processing, tax withholdings, and statutory filings with precision and transparency. - Local HR Expertise
EORs bring on-the-ground knowledge of employment practices, benefits administration, and cultural expectations. - Reduced Liability
The EOR acts as the official employer of record, shielding the client company from employment-related legal risks. - Scalable Workforce Management
EOR models allow organizations to expand or downsize flexibly in response to market demand. - Expatriate Employment Support
EORs handle visa, work permit, and residency processes for foreign professionals under the Department of Immigration.
EOR vs. PEO: Choosing the Right Model
While both EOR and PEO (Professional Employer Organization) models offer HR outsourcing, their legal implications differ:
- EOR (Employer of Record): Acts as the legal employer for companies without a local entity in Zambia.
- PEO: Operates under a co-employment model for businesses with an existing entity, managing HR functions jointly.
For new entrants or organizations testing the Zambian market, the EOR model offers the fastest, most compliant route to establishing operations.
Industries Benefiting from EOR Services in Zambia
EOR services are particularly valuable for industries expanding in Zambia’s growth sectors:
- Mining and Energy: Supporting multinational projects and workforce mobility in the copper belt.
- Agriculture and Agri-Tech: Hiring field workers and local technicians in compliance with labor laws.
- Infrastructure and Construction: Managing project-based staff under complex contracts.
- NGOs and Development Agencies: Facilitating compliant hiring for donor-funded initiatives.
- Technology and Telecom: Employing remote professionals and supporting digital transformation efforts.
Conclusion
Zambia presents a strategic opportunity for global employers expanding into Southern Africa. Its economic resilience, youthful workforce, and regional connectivity make it a prime destination for international investment. However, understanding local employment laws, payroll compliance, and taxation can be challenging. Partnering with an EOR Zambia provider simplifies every aspect of workforce management—from onboarding to payroll—ensuring full compliance, operational efficiency, and sustainable growth. For companies seeking a risk-free way to establish presence in Zambia, the EOR model is the most practical and compliant solution.
