Employer of Record in Malawi

Businesses can only operate smoothly in Malawi 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 Malawi below, to avoid any compliance issues.

Employment Contract Requirements

Malawi's employment regulations are governed by various acts and legislation, with the Labor Relations Act of 1996 being the main one. For formal employment, a written employment contract is mandatory, encompassing essential details such as:

• Identification of both the employer and employee.
• Commencement date of employment.
• Clearly defined job title and description of duties.
• Terms of payment

Onboarding Process

We can help you get a new employee started in Malawi 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 Malawi

The working hours for all employees are outlined in their respective contracts. In accordance with the standard regulations in Malawi, a full-time working week should be at most 48 hours.

Overtime in Malawi

The overtime rates are classified into three categories:

• Ordinary overtime, which entails an hourly rate of not less than one and a half times the regular hourly wag
• Day off overtime, with a rate of not less than double the regular hourly wage
• Holiday overtime, compensated at a rate of not less than double the normal hourly wage.

Probation Period in Malawi

The involved parties have the flexibility to mutually determine the length of the probationary period, with the condition that this period does not extend beyond 12 months under any circumstances.

Fiscal Year in Malawi

1 July - 30 June is the 12-month accounting period that businesses in Malawi use for financial and tax reporting purposes.

Payroll Cycle in Malawi

The payroll cycle in Malawi is usually weekly, bi-weekly or monthly, with employees being paid once a week or every two weeks or at least once a month.

Minimum Wage in Malawi

The minimum wage for employees in Malawi is typically 260.45 MWK per hour, amounting to ~50,000 MWK per month for a typical 48 hour work week.

Bonus Payments in Malawi

The law does not include any provisions regarding 13th salaries.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 11% on top of the employee salary in Malawi.

Employee Payroll Tax Contributions

In Malawi , the typical estimation for employee payroll contributions cost is around 5%.

Individual Income Tax Contributions

Individual income tax in Malawi is determined through progressive rates, ranging from 0% to 40%. The tax rate increases in proportion to the individual's income as follows:

Pension in Malawi

Employers in Malawi contribute 10% to the public pension. To qualify for the old age pension, one must be at least 50 or meet specific conditions like permanent emigration or having 20 years of contributions.

Mandatory Leave Entitlement in Malawi

The annual leave entitlement in Malawi is 15 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 Malawi

There are a total of 12 public holidays in Malawi. If a public holiday falls on a weekend, it is observed on a weekday as a day off in lieu.

Paid Time Off in Malawi

The duration of annual leave is contingent on the number of working days in a week:

• For a six-day workweek: Annual leave is granted for 18 working days.
• For a five-day workweek: Annual leave is provided for 15 working days.

Maternity Leave In Malawi

Pregnant employees are entitled to eight weeks of maternity leave with full pay, and this benefit is available once every three years.

Paternity Leave In Malawi

In Malawi, there is no statutory paternity leave mandated by law

Sick Leave In Malawi

After completing one year of service, employees are entitled to a minimum of four weeks of sick leave on full pay and an additional eight weeks of sick leave on half pay each year.

Parental Leave In Malawi

In Malawi, there is no statutory parental leave mandated by law.

Strike Leave

Employees in Malawi will receive payment for the first three days of a strike. If an employee chooses to continue striking beyond the initial three days, the responsibility for payment during the extended strike period shifts to their union.

Termination Process in Malawi

In Malawi, employers can end a fixed-term contract for business, personal, or workers misconduct reasons. In cases of misconduct, a warning must precede the termination, providing the employee with an opportunity to explain their actions. Other reasons include:

• Disciplinary issues
• Breach of contract
• Poor work performance
• Incompetence

Notice Period in Malawi

The notice period in employment contracts or collective agreements may vary based on the payment frequency and the duration of the employee's service as follows:

Monthly Payment: 30 days' notice is required.

Bi-Weekly Payment:

• Less than five years' service: 15 days' notice.
• More than five years' service: 30 days' notice.

Employment Less than 2 Years (Paid Monthly):

• Less than 1 year of service: 1 week's notice.
• 1 to 5 years of service: 2 weeks' notice.
• More than 5 years of service: 1 month's notice.

Hourly or Daily Payment:

• Less than 6 months of service: 1 day's notice.
• 6 months to 2 years of service: 1 week's notice.
• More than 2 years to 5 years of service: 15 days' notice.
• More than 5 years of service: 1 month's notice.

Severance in Malawi

Employees qualify for severance pay if they have completed a minimum of one year of service and their contract is terminated by the employer for economic reasons (such as lay-offs) or if the termination is deemed unfair. The severance pay is determined based on the number of years of service:

• 1-5 years of service: 2 weeks' pay for each year of employment.
• 6-10 years of service: 3 weeks' pay for each year of employment.
• 11 or more years of service: 4 weeks' pay for each year of service.