Employer of Record in Djibouti

Businesses can only operate smoothly in Djibouti if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Djibouti below, to avoid any compliance issues.

Employment Contract Requirements

Labour laws in Djibouti regulate employment in the country and permit contracts to be either verbal or written. Typically, contracts are drafted in the local language and must include the following information:

• Identification of both parties
• Job description
• Basic salary and payment method (including benefits)
• Probation period (if applicable)

Onboarding Process

We can help you get a new employee started in Djibouti quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Djibouti

The standard workweek in Djibouti is 48 hours.

Overtime in Djibouti

The employer in Djibouti can request employees to work overtime after informing both the employees and the labour inspector. The maximum limit for overtime is 5 hours per week per worker, and compensation is provided at an increased rate as stipulated in the collective agreement.

Probation Period in Djibouti

For indefinite-term contracts in Djibouti, probationary periods are permitted as follows:

• Hourly employment: 15 days probation
• Monthly-paid employment: 1 month probation
• Supervisors, executives, and similar roles: 3 months probation

Fiscal Year in Djibouti

1 January - 31 December is the 12-month accounting period that businesses in Djibouti use for financial and tax reporting purposes.

Payroll Cycle in Djibouti

The payroll cycle in Djibouti is usually monthly, with employees being paid within the first 8 days of the month.

Minimum Wage in Djibouti

In Djibouti, there is no legally mandated national minimum wage for private-sector workers. However, for public-sector employees, the government has established a minimum wage of 35,000 Djiboutian Francs (approximately $198) per month.

Bonus Payments in Djibouti

In Djibouti, the payment of a 13th-month salary is not obligatory.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 15.7% on top of the employee salary in Djibouti.

Employee Payroll Tax Contributions

In Djibouti , the typical estimation for employee payroll contributions cost is around 4%.

Individual Income Tax Contributions

Djibouti employs a territorial tax system where both Djiboutian nationals and non-Djiboutian nationals with Djiboutian-source income are subject to taxation. The tax rates are progressive, reaching up to 30% for employment income.

Pension in Djibouti

Djibouti's Social Security System for Old Age, Disability, and Survivors covers salaried workers, including private-sector and certain public-sector employees. Mandatory contributions are 4% of monthly earnings, while voluntary contributors pay 8% of their last monthly earnings, with no specified minimum or maximum earnings for calculation.

Mandatory Leave Entitlement in Djibouti

The annual leave entitlement in Djibouti is 30 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Djibouti

Djibouti observes 9 mandatory public and provincial holidays in a calendar year:

Paid Time Off in Djibouti

Employees in Djibouti are typically entitled to 30 days of paid annual leave.

Maternity Leave In Djibouti

Pregnant employees in Djibouti are entitled to 14 weeks of paid maternity leave, with 8 weeks to be taken before the birth and the remaining 6 weeks after.

Paternity Leave In Djibouti

Fathers in Djibouti are entitled to 3 days of paid paternity leave.

Sick Leave In Djibouti

Employees in Djibouti who provide a medical certificate are entitled to paid sick leave, maintaining their regular salary. The duration of paid sick leave depends on their seniority:

• Less than 12 months of service: 50% of salary for 1 month
• 1-5 years of service: 50% of salary for 3 months
• More than 5 years of service: 50% of salary for 9 months

Parental Leave In Djibouti

Currently, Djibouti does not offer additional shared parental leave beyond provisions for maternity and paternity leave.

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Termination Process in Djibouti

In Djibouti, employers have the authority to terminate employment based on professional inadequacy, misconduct, or redundancy. Employees also have the option to terminate their contracts through resignation. In both cases, a notice must be provided to inform the relevant party of the decision.

Notice Period in Djibouti

In Djibouti, a notice period of up to 3 months is required when terminating an employment contract.

Severance in Djibouti

In Djibouti, employees are entitled to severance pay if they are unjustly dismissed. The amount of severance pay depends on the size of the employer's organisation and must not exceed the following amounts:

• Less than 11 employees: 2 months pay
• 11-49 employees: 4 months pay
• More than 49 employees: 6 months pay