Employer of Record (EOR) Angola
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In Angola, the concept of a legal employer takes center stage through the role of an Employer of Record. Commonly recognized as a Global Professional Employer Organization (Global PEO), this crucial function encompasses various facets of employment. It entails ensuring strict compliance with local labor laws, managing payroll intricacies, handling tax obligations, providing mandatory benefits, and crafting employment agreements.
The responsibilities of the Employer of Record (EOR) in Angola include:
- Guaranteeing adherence to local employment laws.
- Overseeing the local payroll procedures.
- Managing the filing of employment-related taxes and essential documentation.
- Supplying the worker with accurate payslips.
- Timely distribution of the worker’s salary payments
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Employment Contracts in Angola
Working Hours
The standard workweek in Angola comprises 44 hours, with a daily limit of 8 hours. It is possible to extend the workweek to 54 hours or 9 hours per day. A mandatory 1-hour meal break, or 2 hours if food is unavailable on-site, is incorporated into the workday. Additionally, workers are entitled to a rest break of at least 10 hours between consecutive work days.
Probation Period
For open-ended employment agreements, the probationary period is typically up to 60 days. However, if the employee is engaged in highly technically complex tasks that pose challenges for assessment, the probation period can extend up to four months.
13th Month Salary
In Angola, the 13th and 14th-month salaries are obligatory. The 13th salary, equivalent to 50%, serves as a vacation bonus and must be disbursed prior to the employee’s vacation period. The 14th salary is provided as a Christmas bonus.
Employees vs Independent Contractors Compliance
| Criteria | Independent Contractors | Employees |
|---|---|---|
| Legal Status | Self-employed contractors who operate autonomously under a service agreement | Individuals under an employment agreement governed by GLL and special regulations |
| Labour Regimes | No distinction between blue-collar and white-collar workers | Subject to specific labor regimes depending on the type of work |
| Employee Status | Not applicable, as they are self-employed | Defined as employees with different rights and duties, subject to specific labor regimes |
| Temporary Employees | Not explicitly mentioned, but there are regulations for temporary employees hired through agencies and subject to specific contracts | Governed by Presidential Decree No 31/17, 22 February, and may be assigned to other companies under certain conditions |
| Employment Contracts | Different types, including indefinite, fixed-term, and uncertain-term agreements | Various types, such as indefinite and fixed-term/uncertain-term agreements |
| Renewal Limits | Not specified | Fixed-term agreements may be renewed successively up to a maximum limit of five years, extendable to ten years for certain companies |
| Transition to Indefinite Term | Not applicable | Fixed-term agreements become indefinite if not terminated by the employer after reaching maximum renewal limits |
| Formal Requirements for Agreement | Not explicitly specified, but parties are free to choose the form | Must comply with the models set forth in Presidential Decree No 40/17, 6 March, including specific terms like full names, workplace, salary details, etc. |
| Written Form Requirement | Determined by law in specific cases (e.g., non-resident foreign employees, apprenticeship contracts, and temporary employment agreements) | Parties are free to choose the form, but a written form is required when specified by law |
| Additional Clauses | Not specified | Parties are free to include other written clauses, such as non-competition clauses, as long as they comply with the law |
Social Security in Angola
In Angola, social security contributions play a crucial role in providing protection for individuals in various aspects, including family, pension, and unemployment. Here’s an overview of social security in Angola:
Social Security Contributions:
Individuals in Angola are subject to social security contributions based on their gross income, with rates set at 3% for employees and 8% for employers (or 8% for retired employees). The taxable income encompasses all forms of remuneration, excluding specific items such as social benefits from employers, holiday allowances, and values associated with complementary social protection schemes. These contributions play a crucial role in providing coverage for family, pension, and unemployment protection.
Payroll in Angola
- Minimum Wages: As of February 1, 2022, the current monthly minimum wage in Angola stands at AOA32,181.15 for the year 2023.
- Payroll Cycle: Typically, the payroll cycle follows a monthly schedule, with remunerations disbursed by the last working day of each month.
- Mercans Payroll Services: Leverage Mercans’ robust payroll capabilities for seamless payroll management. Our services include local currency payment for employees and contractors, comprehensive payroll setup, meticulous payroll processing, efficient payroll administration, and timely handling of statutory filings and payments. Trust Mercans to streamline your payroll processes, ensuring compliance and reliability.
Angola Employee Hiring Cost
In Angola, the total employment cost for hiring an employee with a gross monthly pay of USD 10,000 involves various components. The employer incurs an additional cost, including an 8.33% contribution, totaling USD 833.33, as well as a Skuad fee amounting to USD 599. Consequently, the overall monthly cost of employment is USD 1,432.33. On the employee’s side, after deducting estimated taxes and contributions totaling USD 217.3, the net monthly salary is USD 9,782.7. This calculation emphasizes the comprehensive nature of employment costs in Angola, encompassing both employer contributions and fees, ultimately determining the net income received by the employee. Understanding these intricacies is essential for businesses navigating the employment landscape in Angola.
Termination, Notice Period and Severance Pay
Termination
The Angolan constitution and the GLL explicitly outline the right to employment, work, and employment stability, specifying the grounds for termination in the applicable law. Both parties are prohibited from employing termination methods not outlined in the applicable law, including the GLL.
In terms of termination grounds (excluding dismissal for a serious cause or termination agreements), employers may opt for dismissal based on objective grounds and engage in collective redundancies.
Individual Dismissal on Objective Grounds:
The compensation structure for individual dismissal on objective grounds is a critical aspect of the provided example and should be retained. In the event of such dismissals, the calculation of compensation varies based on the type of company and the duration of an individual’s service to the company. The terms are as follows:
For large companies
One base wage for each year of seniority, up to a maximum limit of five years, along with an additional 50% of the base wage multiplied by the number of years of service exceeding the five-year limit.
For medium companies
One base wage for each year of seniority, up to a maximum limit of three years, plus 40% of the base wage multiplied by the number of years of service exceeding the three-year limit.
For small companies
Two base wages plus 30% of the base salary, multiplied by the number of years of service exceeding the two-year limit.
For micro companies
Two base wages plus 20% of the base wage, multiplied by the number of years of service exceeding the two-year limit.
This structure ensures a fair and graduated approach to compensation based on the company’s size and the employee’s tenure, providing clarity and transparency in the event of individual dismissals.
Collective Redundancy
Collective redundancy is employed when the extinction or transformation of jobs is motivated by proven economic, technological, or structural reasons affecting more than 20 employees. The procedure for collective redundancy mirrors that of individual dismissal on objective grounds, including compensation terms and calculation.
In terms of procedure, collective redundancy requires adherence to the GLL, involving a communication phase and execution phase (a 60-day notice period preceding the termination date, subject to GLL requirements). The Inspectorate-General of Labour may intervene post the mandatory communication to clarify the situation. Additionally, employers can engage in meetings with employee representative bodies to exchange information and insights, subsequently sharing their conclusions with the Inspectorate-General of Labour.
Notice Period
During a trial period, either party may terminate the employment agreement without the requirement of notice, compensation, or justification.
- Employers cannot terminate agreements except in situations expressly predicated in the applicable law, with notice periods and severance payments applied in certain cases.
- For fixed-term employment agreements exceeding three months, employers must communicate the end 15 working days before the final date, paying severance in lieu of notice.
- Employees must provide written notice within 30 days of the intended departure, paying severance if notice is not given.
- If an employer refuses to let an employee work during the notice period, the employee pays severance.
- If an employee terminates with cause, no notice period is required, and indemnity may be due depending on the cause.
- Dismissal for disciplinary reasons must be based on serious disciplinary offenses or objective reasons making it impossible to maintain the employment relationship.
- A formal procedure, including a summons, hearing, and dismissal, must precede disciplinary dismissal, with specific timeframes and communication requirements.
- Additional formalities may be required for protected employees.
- Employees may appeal within 180 days of termination if they dispute the acts they are accused of, find the dismissal disproportionate, or assert null or abusive causes.
- Nullity and abusive causes include procedural infringements, discriminatory motives, employee claims against working conditions, and rights violations.
Employee Benefits in Angola
- Annual Leave Employees in Angola are granted 22 days of paid leave annually, along with a bonus equivalent to 50% of one month’s basic wage. Additionally, working mothers receive an extra paid day off for each child aged 14 or under. Sick leave and family care leave are considered together, allowing employees three days of leave per month, capped at a maximum of 12 days per year.
- Paternity Leave Fathers in Angola are entitled to one day of paternity leave upon the birth of their child.
- National Service Employees may take paid leave for military duties, allowing up to 2 days per month and a maximum of 15 days per year.
- Maternity Leave Maternity leave in Angola spans a mandatory 12 weeks for women with a minimum of six months’ contributions to the social security system in the preceding 12 months (supplemented by the employer if necessary). The leave period starts four weeks before the expected delivery date, and an additional four weeks of unpaid leave can be taken.
- Employee Benefits All workers enjoy holiday and Christmas bonuses, each amounting to 50% of a month’s base wages, resulting in an additional month’s wage. Additionally, Angola observes a total of 12 public holidays.
- Education Leave With a 30-day advance notice, employees can take unpaid leave for up to 60 days for educational or training purposes.
- Bonus All workers are entitled to a holiday bonus and a Christmas bonus, each calculated as 50% of a month’s base wages, thereby totaling an extra month’s wage.
Personal Income Tax in Angola
For tax purposes in Angola, an individual is considered a resident if they either maintain a habitual residence in Angola on December 31 of the fiscal year or spend more than 183 days, consecutively or not, in Angola during the fiscal year.
Personal income tax is applicable to all forms of remuneration, regardless of the individual’s nationality or tax residency status. This includes wages, salaries, fees, bonuses, and any additional remuneration, encompassing benefits in kind. Certain compensatory elements may be exempt from or not subject to income tax under specific conditions. Examples include family allowances, meal and transport allowances within specified limits, documented employee business travel expenses, contributions to social security, housing allowances, and holiday or Christmas bonus allowances.
Residents
| Annual Taxable Income (AOA*) | Payable Tax (AOA) |
|---|---|
| < 34,451 | Exempt |
| 34,451 - 35,000 | The excess of 34,450 |
| 35,001 - 40,000 | 550 + 7% upon excess of 35,000 |
| 40,001 - 45,000 | 900 + 8% upon excess of 40,000 |
| 45,001 - 50,000 | 1,300 + 9% upon excess of 45,000 |
| 50,001 - 70,000 | 1,750 + 10% upon excess of 50,000 |
| 70,001 - 90,000 | 3,750 + 11% upon excess of 70,000 |
| 90,001 - 110,000 | 5,950 + 12% upon excess of 90,000 |
| 110,001 - 140,000 | 8,350 + 13% upon excess of 110,000 |
| 140,001 - 170,000 | 12,250 + 14% upon excess of 140,000 |
| 170,001 - 200,000 | 16,450 + 15% upon excess of 170,000 |
| 200,001 - 230,000 | 20,950 + 16% upon excess of 200,000 |
| >230,000 | 25,750 + 17% upon excess of 230,000 |
Non-Residents
For non-residents, tax rates may differ. However, the provided information does not outline specific tax brackets for non-residents. If there are specific rates or a separate table, please provide that information.
Tax Reporting
Tax reporting in Angola involves considering residency status and annual taxable income to determine the applicable tax rates. Residents are taxed based on their worldwide income, while non-residents may have different tax rates applicable to their sourced income within Angola. It’s important to adhere to the residency criteria and accurately report all taxable income for proper taxation.
Work Permit in Angola
Work permits in Angola are issued to expatriates engaged in temporary employment with an Angolan company or the state. Those holding a work visa are permitted to stay in the country for the duration of their work contract, typically up to 12 months, and are granted multiple entries. However, expatriates are confined to the specific job for which the visa was granted and are authorized to work solely for the employer who initiated the visa application.
It’s crucial to emphasize that Angolan work visas do not confer the right to establish residence. Expatriates desiring to reside in the country must undergo a separate application process for a residence permit in Angola.
EOR Solutions in Angola
Conclusion
In conclusion, Mercans’ Employer of Record (EOR) solutions offer a strategic and efficient approach for businesses seeking to establish their presence in Angola. Our comprehensive services, ranging from legal compliance and payroll management to tax-related matters, provide a hassle-free entry into the Angolan market. By leveraging Mercans as your trusted EOR partner, you can focus on your core business activities while we navigate the intricacies of local employment regulations. Our commitment to excellence ensures that your expansion into Angola is not only seamless but also compliant and tailored to your unique business needs. With Mercans, embrace a reliable and cost-effective solution to unlock the full potential of your global workforce.