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Malawi EOR & PEO

Start hiring in Malawi

Simple, compliant hiring with Horizons EOR & PEO

Hire in Malawi

Though historically it has been among Africa’s poorest nations, Malawi is one of the most politically stable on the continent, with over 60 years of peace and multi-party elections every five years since 1993. In 2021, the government launched the Malawi 2063 Vision, a set of proposals designed to transform the country into a wealthy and self-reliant state. In 2024, the economy is expected to grow by two percent. From a population of approximately 20 million, Malawi has a potential labor force of over eight million with an average monthly wage of between $200 and $400 per month, depending on the industry.

Facts & Stats

EOR Platform

Hire in Malawi, and pay employees through our platform or app.

EOR Cost

Our Malawi EOR solution is the most affordable on the market.

Time-to-hire

Fast Malawi onboarding, hire in as little as 24 hours.

Contracts

We draft compliant Malawi labor contracts.

Local benefits

We manage all Malawi mandatory benefits.

180+ Countries

It doesn’t stop with Malawi — we hire employees globally.

hire employees in Malawi

What Is a Malawi EOR?

An Employer of Record (EOR) is a service that connects workers from one country with an employer from another. In Malawi, this means assisting global companies with establishing a labor force in the African nation while simultaneously helping local people seize opportunities for roles outside Malawi’s domestic industries, which are heavily dominated by agriculture. To achieve its aims, an EOR assumes the role of an employer and human resources manager for Malawi workers. It then assigns these workers to roles within its foreign client’s business. In most circumstances, an EOR represents the most efficient way for any global business to begin hiring in Malawi.

 

A professional employer organization (PEO) is often discussed interchangeably with an EOR. This is a similar recruitment and management service that sources talent inside Malawi on behalf of foreign clients. However, there is a key difference. An EOR serves as a legal local entity within Malawi for its clients. A PEO does not. Any business working with a PEO will need to undergo the complex and costly process of independently establishing an entity for itself in Malawi.

Save Money And Time with A Malawi EOR

What Are the Benefits of a Malawi EOR?

By sidestepping the need to create a local entity, or to establish an in-depth understanding of the local labor market, working with an EOR allows foreign businesses to begin hiring Malawian workers quickly, efficiently, and with minimum cost or risk. Some of the primary benefits of contracting a Malawi EOR include:

  1. Streamlined service: Without an EOR, a foreign business may have to undertake weeks, or even months of groundwork before it can hire its first employee. Contracting an EOR not only cuts through much of the red tape but provides instant access to Malawi talent through the EOR’s established networks. In some cases, the first workers can be in place within days.
  2. Legal assistance: Employment in any territory must be done in compliance with local labor laws. These regulations are different in every country, and keeping up with them can be a minefield for even the most experienced outside human resource departments. As a local expert, an EOR will not only have an existing understanding of Malawi labor law but will also accept full liability for ensuring it is complied with.
  3. Cultural guidance: Creating a productive labor force isn’t just about finding the right skills for the right pay; it also requires negotiating cultural norms and expectations to form healthy relationships and get the best out of every employee. Language barriers and lack of local awareness can create huge challenges in this area. As an organization with experience operating within Malawi, an EOR can be a great help in bridging these gaps in understanding.
Horizons is Best IN Class

Why Choose Horizons?

Horizons stands out as a Malawi EOR through:

  1. A strong regional presence in Africa, meaning senior management are on the ground to deal with any issues.
  2. Client-focused infrastructure. Horizons won’t oversell you on products and services you don’t need. Horizons offers the easiest platform to compliantly hire and pay people worldwide.
  3. Cost-effective solutions. At $499 per employee, per month, no EOR in Malawi is more affordable. The cost is 100% transparent (onboarding, offboarding, deposit, no extra charges).
  4. A customer-first culture. Horizons is an efficient bootstrapped company. It is not an externally-funded company burning investor cash to aggressively acquire new clients. Horizons is the only EOR that grows with its customer, reflecting the level of care and personal attention provided to each customer. Horizons will carefully advise on the best setup in each country: the type of contract needed, how to structure your benefits, and how to offboard a person while minimizing the risk of conflicts and extra cost
  5. A long-term partnership. Horizons is the only EOR platform with a recruitment arm — a direct response to client demand. If any employee is leaving, or if our clients want to explore a new country, Horizons can recruit new candidates directly for the client.  Horizons is:
    • The only EOR doing this in-house — no subcontracting
    • The only EOR doing this without a retainer — clients are only charged upon success
    • The only EOR charging just a 2% fee per month
Step-by-step Malawi EOR

How Does a Malawi EOR Work?

An EOR in Malawi works by acting as an employer for local workers, whom it then assigns to positions with clients running businesses based outside the country. This allows foreign businesses to bypass many of the requirements of establishing themselves within Malawi while also outsourcing their human resources needs to an experienced local expert. Similarly, local workers are able to secure opportunities from a wider job market while knowing their employment will be handled by an agency that understands the local working regulations and culture.

Among the services provided by a Malawi EOR are:

  1. Hire your employees: The first and most vital step to creating a labor force in Malawi is to hire workers. An EOR will begin doing this as soon as an agreement is made with a foreign client. The best talent for each required role is found either through advertising and assessment or by approaching members of an established roster of interested locals.
  2. Manage employment contracts and onboarding: The second service carried out by a Malawi EOR is contracting and onboarding. Once the right workers have been found, the EOR will confirm their employment by creating contracts that satisfy all legal regulations and any stipulated requirements of the foreign client. They will then complete any necessary onboarding processes and assign each worker to their individual roles in the client business.
  3. Process payroll and handle employment taxes: Although each Malawi worker performs the day-to-day duties on behalf of the foreign client, the EOR remains the legal employer at all times. As such, the EOR handles all payroll and tax processes, including settling disputes and managing audits.
  4. Administer benefits: In addition to managing payroll, an EOR’s responsibilities as the legal employer also extend to administering benefits such as annual leave, social security, sick rights, and any other agreed bonuses and allowances. The EOR will perform this function throughout the employment cycle.
  5. Take care of exit procedures: The final stage of an EOR’s responsibility occurs when the working relationship ends. Whether this happens due to the employee moving on, the needs of the employer changing, or some other reason, there will be official protocols that must be followed. These can include notice periods, severance pay, and – in some circumstances – exit interviews. The EOR will ensure every necessary process is followed for each departing employee.
stay compliant with Malawi labor laws

Labor Laws

Ensuring compliance with local labor laws and employment regulations is one of the prime services offered by a Malawi EOR. This means maintaining a thorough knowledge of the expectations and rules across every aspect of employment.

Employment contract types

The Malawian Employment Act is the primary document establishing a framework for employer responsibilities and employee rights, whether the work is for local companies or global businesses. It states that any agreement of employment must be laid out in a signed contract that details, among other things, the parties involved, the work to be undertaken, the conditions, and the compensation. Employment contracts in Malawi should also address any confidentiality, termination, and grievance procedures. 

Project-based

Probationary period

No probationary period.

Termination

At completion of the project.

Severance

Not applicable

Fixed-term

Probationary period

Typically up to 3 months

Termination notice period

7 to 30 days

Severance

Not applicable

Indefinite

Probationary period

Typically up to 3 months

Termination notice period

7 to 30 days

Severance

1 to 10 years is 2 weeks' salary per year of service

More than 10 years is 3 weeks' salary per year of servicem

Working hours in Malawi

According to The Employment Act (2000), the maximum standard working week in Malawi should be 48 hours. For a five-day working week, no employee should be asked to work more than 12 hours in a single day. For a six-day week, this is reduced to eight hours each day. Every worker should be offered at least 24 continuous hours of rest in each seven-day period. The act also outlines requirements for overtime pay which is set at a minimum of 150% during a standard week, 200% when the employee is giving up a rest day, and 400% for hours worked on public holidays.

Overtime must be compensated in the following way:

For a regular workday:

150% of the standard hourly rate

For a rest day:

200% of the standard hourly rate

For a statutory holiday:

200% of the standard hourly rate

Every worker in Malawi is entitled to paid time off for public holidays. In 2024, this totals 15 days, including secular holidays, national celebrations, and significant dates in both the Christian and Islamic calendars.

 

DateHoliday name
1 Jan, 2024New Year’s Day
15 Jan, 2024John Chilembwe Day
3 Mar, 2024Martyrs’ Day
29 Mar, 2024Good Friday
1 Apr, 2024Easter Monday
11 Apr, 2024Eid al-Fitr
1 May, 2024May Day
14 May, 2024Kamuzu Day
6 Jul, 2024Independence Day
15 Oct, 2024Mother’s Day
25 Dec, 2024Christmas Day
26 Dec, 2024Boxing Day

Paid time off

The amount of paid time off employees are eligible to receive is based on how long they have been employed at their current company:

Under 1 year of employment

no leave entitlement

1-10 years of employment

18 days of paid leave annually

10-20 years of employment

18 days of paid leave annually

20+ years of employment

18 days of paid leave annually

Sick leave in Malawi

For every 12 months of continuous service, Malawi employees are entitled to four weeks’ sick leave with full pay and a further eight weeks at half pay. Employers may request a medical certificate before authorizing payment.

Less than 6 months of sick leave:

(percentage of regular wages owed to the employee)

Under 1 year of employment

no leave entitlement

1-10 years of employment

28 days of paid leave annually

10-20 years of employment

28 days of paid leave annually

20+ years of employment

28 days of paid leave annually

Over 6 months of sick leave

Under 1 year of employment

Unpaid (unless specified in the employment contract or under special circumstances)

1-3 years of employment

Unpaid (unless specified in the employment contract or under special circumstances)

3+ years of employment

Unpaid (unless specified in the employment contract or under special circumstances)

In order for employees to receive the full wages due to them, workers must present a valid medical certificate from a certified doctor to their employer.

Maternity leave in Malawi

Aside from public holidays, annual leave, and sick leave, the only other paid time off legally guaranteed to Malawi workers is for maternity. This is for female workers only and is set at a minimum of eight weeks every three years. Any additional paid leave, either for maternity or other reasons, must be negotiated directly with the employer.

Annual leave in Malawi

Vacation entitlement in Malawi is dependent on working patterns. Any employee working a regular six-day week should be given at least 18 days plus public holidays each year. Employees working five days should be given 15 days plus public holidays. Unless mutually agreed, these should be taken within six months of the entitlement period.

Termination & severance in Malawi

The Malawi Employment Act states that any worker on an indefinite-term contract should be given written notice for no-fault termination. This amounts to four weeks for any worker paid monthly. For those paid fortnightly, the period is two weeks during the first five years of service and one month after that time. Severance pay for redundancies and other no-fault termination is set at a minimum of two weeks’ wages for less than five years of continuous service, three weeks for five to ten years, and four weeks for ten years or more.

Malawi's compulsory social security contributions

Social security contributions are primarily governed by the National Pension Scheme under the Pensions Act. The scheme mandates contributions from both employers and employees to ensure financial security for workers upon retirement, disability, or in other specified circumstances.

The combined contribution from both employer and employee is a minimum of 15% of the employee’s basic salary.

Malawi social security for foreigners

Foreign employees working in Malawi are generally subject to the same social security contribution requirements unless there are specific exemptions provided by bilateral agreements or the terms of their employment contracts.

Individual income tax

The income tax system is progressive, meaning that tax rates increase with higher income levels. The Malawi Revenue Authority (MRA) administers these taxes.

Taxable income includes salaries, wages, bonuses, allowances, and other benefits in kind.

Health insurance

Health insurance coverage is not universally mandated or provided by the government. However, various options for health insurance are available through private insurance companies and employer-provided schemes.

Private health insurance policies typically cover hospitalization, outpatient services, maternity care, emergency services, and sometimes dental and optical care.

hassle-free Malawian compensation & benefits

Compensation & Benefits

Malawi compensation laws

Articles 54 and 55 of the Malawi Employment Act, 2002 state that a national minimum wage should be adhered to. The exact figure varies depending on the sector, but anyone who is not a domestic worker or truck driver should expect to earn at least MWK 3,461.54 each day or MWK 90,004 each month. This converts to roughly $2 per day or $55 per month.

13 month salary in Malawi

Malawi labor law does not mandate any bonuses or allowances for local workers; this includes 13th-month salary payments. Any benefits in addition to the standard compensation package must be agreed directly at the time of hire.

Social security for Malawian nationals

All workers in Malawi are expected to contribute social security payments to a National Pension Scheme. Employees should pay 5% of their pensionable income, while employers should add an additional 15%.

Hire borderless talent with Horizons

Hire in Malawi in 24h without your own local entity.

With Horizons, you get quick service, transparent pricing, and expert support.

Frequently asked questions

As the entity that will assume liability for compliance with labor laws in Malawi, an EOR will ensure it is fully aware of all up-to-date regulations and how these should be applied in any aspect of employment. Should it fail in this respect, the EOR is legally responsible for finding a resolution or facing the consequences.

Using an EOR in Malawi allows any global business to begin hiring without delay while applying minimal resources and accepting reduced risk. An EOR is a complete solution for recruiting and managing a labor force in Malawi.

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