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Compensation & Benefits in ZmZambia.






Country Capital



Zambian kwacha (ZMW)

When you grow your company to a new country, benefits planning should be a priority. If you handle this process carefully, you can create a foundation for your success internationally.

Zambia employee benefits plan

Benefits can make the recruitment process easier for your company. If you plan your provisions carefully, they can encourage job seekers to apply for your vacancies. Internally, these benefits can improve team morale and retention rates, helping you save on onboarding costs over time. Possible benefits include:

  1. Transportation allowances
  2. Private health insurance
  3. Optional pension schemes
  4. Optional life insurance
  5. Holiday bonuses

Mandatory benefits in Zambia

While benefits planning plays a role in your growth strategy, it’s also essential to ensure compliance. The labor laws require employers to provide the following:

  1. Social security contributions
  2. National Health Fund contributions
  3. Paid public holidays
  4. Paid annual and compassionate leave
  5. Paid sick leave
  6. Workman’s insurance
  7. Gratuity at the end of a contract

Designing Zambia employee benefits plans

Taking an organized approach to the design process will ensure you choose benefits that are competitive and compliant. While requirements and expectations are different in every country, you can follow the same basic steps in your planning wherever you go.

1. Evaluate your finances

Benefits will require a portion of your company’s earnings. Assess your revenue and expenses to determine how this new expenditure will fit in.

2. Learn about the market

You need to understand market standards to compete with other employers. Research similar companies to learn about commonly offered benefits.

3. Select benefits

With everything you’ve learned through your research, you can choose benefits. Allocate funding to required provisions first, then use your remaining budget for additional perks.

Average cost of benefits

Every company pays a different amount for benefits, which can skew the average cost and make it an unhelpful metric for your planning. Factors such as size, industry, and location can influence how much an employer is willing to put toward employee provisions.

Rather than relying on an average, you should create a budget unique to your company. The best way to create this budget is to dedicate a percentage of your earnings to the cause. When your company grows, your benefits budget will automatically scale with it.

How to calculate employee benefits

Many benefits, such as allowances and bonuses, require simple calculations. You can set an amount to spend and distribute it among your team. Other benefits, such as insurance schemes, have more complex calculations. You may be responsible for varying amounts according to premiums and your policies regarding employee matching.

Zambia’s employment laws describe how to calculate the required benefits. For example, social security contributions are based on a percentage of earnings. Employees pay 5 percent of their earnings, and employers pay 5 percent on employees’ behalves. Both are capped at ZMW 1221.80.

How are employee benefits taxed in Zambia?

Tax law declares that any emoluments that arise from Zambian employment are subject to income tax. Emoluments are defined as salaries, wages, overtime, commissions, bonuses, gratuities, leave pay, and benefits. Some benefits are exempt from income tax, including:

  1. Lump sums for retirement, death, or indefinite incapacity
  2. Pensions received from approved funds
  3. Scholarships or maintenance for education
  4. Approved payments for sickness and injury

Employers are responsible for deducting income tax values from employee paychecks, so it’s essential to understand the intricacies and exceptions of tax law.

Employee health benefits

The country’s population has access to free care through the public healthcare system. Employers can provide private health insurance as a supplemental benefit, but they are not required to do so by law.

How G-P can help scale your team in Zambia

G-P’ global employment platform helps you build and scale an international team quickly and easily, ensuring all benefits offered to candidates are compliant and in line with local regulations. Learn more about our platform and request a proposal today.


THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.

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