Country Payroll Guide Malawi

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Key Facts

Capital
Lilongwe
Date format
mm/dd/yyyy
Currency
Malawian Kwacha (MWK)
VAT
the standard rate is 16.50%

Contributions

Employers

National Pension Scheme
National Pension Scheme - 10%
Total Employment Cost
Total Employment Cost - 10%

Employees

National Pension Scheme
National Pension Scheme - 5%
Total Employee Cost
Total Employee Cost - 5%

Minimum Wage

Minimum Wage
The minimum wage in Malawi is 35000 MWK per month.

Payroll

Payroll Cycle
Weekly, Monthly
13th Salary

There are no provisions in the law regarding 13th salaries.

Income Tax

Employee Income Tax (1)
0 - 1200000 MWK - 0%
Employee Income Tax (2)
1200000 - 36000000 MWK - 30%
Employee Income Tax (3)
36000000 MWK and over - 35%

Working Hours

General Working Hours

48 hours per week.

Overtime

Overtime hours during the regular workday are paid at a rate of 150% of the normal pay. In addition, the employee is entitled to receive the hours of overtime back in compensatory rest for at least the equivalent amount of overtime worked. For work over a weekend or public holiday, the overtime pay rate is 200%.

Leave

Paid Time Off

Minimum annual leave is 15 days for an employee who works a five day work week and 18 days for an employee who works a six day work week.

Public Holidays

12 public holidays.

Sick Days

If the employee has completed for 12 months of employment, they are entitled to four weeks of sick leave at 100% pay and an additional eight weeks at 50% pay.

Maternity Leave

Women are entitled to eight weeks of maternity leave every three years and receive their full salary.

Paternity Leave

There is no statutory paternity leave in Malawi.

Parental Leave

There is no statutory parental leave.

Other Leave

Work-related injury leave: For temporary disability, the employee is entitled to a percentage of their regular salary. For employees who are deemed to be permanently disabled, a lump sum of 54 months is paid out to the employee. For employees who are partially disabled, a percentage of the 54 months will be paid out to the employee, depending on the degree to which they are assessed to be disabled.

In addition to this, it is the responsibility of the employer to pay for all medical expenses associated with the injury. If the injury results in death, a sum totalling 42 months excluding any disability benefit paid before the passing of the employee is paid out to the family.

Termination

Termination Process

Termination needs to be submitted in writing to the other party. The employee must be given the opportunity to present their counterargument. The employer is obligated to provide a termination certificate to the employee stating the reason for termination.

Notice Period

The notice period depends on the frequency the employee is paid:

  • If the employee is paid monthly: 30 days’ notice.
  • If the employee is paid every 2 weeks: 15 days.
Severance Pay

An employee is only eligible for severance pay if they are let go due to economic reasons (i.e. redundancy or retrenchment) or if they are terminated unfairly. In addition, the employee must have completed one year of employment.

  • 1-5 years of service – 2 weeks’ pay for every year of employment.
  • 6-10 years – 3 weeks’ pay for every year of employment.
  • 11+ years – 4 weeks’ pay for every year of service.
Probation Period

Depending on the contract, the probation period can last up to 12 months.

Visa

Employment Visa

Individuals who do need a visa can apply for one at the Embassy of the Republic of Malawi on arrival. The country processes most visa applications within three working days. Foreigners also need a visitor’s permit (VP) or business visit (BV) that allows for short stays of 30 days or less — these documents include an option to extend the permit for up to 60 days. Work permits in Malawi are valid for at least six months and up to two years on the first issuance.