Papua New Guinea EOR & PEO

Start hiring in Papua New Guinea

Simple, compliant hiring with Horizons EOR & PEO

Hire in Papua New Guinea

The economy in Papua New Guinea has been growing modestly for several decades and is projected to expand by 4.8% in 2024. The nation is investing in improved infrastructure to help bring together its diverse population and harness the untapped potential of the country, both for domestic benefit and to become a more attractive proposition for foreign investors and employers. With over 800 indigenous languages, hiring a local labor force in Papua New Guinea is often the only way for a business to expose itself to local markets. While this can also generate communicational challenges for foreign recruiters, a quality local employer of record (EOR) will manage this easily.

Facts & Stats

hire employees in Papua New Guinea

What Is a Papua New Guinea EOR?

An Employer of Record (EOR) is a service that helps foreign businesses create and manage a labor force within Papua New Guinea. By acting as an intermediary between the two parties, an EOR allows global companies to take advantage of a diverse and cost-effective talent pool while bringing opportunities for local workers to find new and competitively paid roles in a variety of industries. A Papua New Guinea EOR will negotiate cultural and language differences while navigating local labor regulations to ensure recruitment within the country is seamless, efficient, and offers the maximum return on investment at the minimum level of risk.

In discussions regarding employment services around the world, you will often see Professional Employer Organization (PEO) used interchangeably with EOR. While these are similar services in many ways, they have a fundamental difference. An EOR assumes the role of legal employer in the territory it operates, therefore serving as an official local entity for its client business. A PEO acts only as a recruitment and human resource management service. This means any foreign company using a PEO would still be required to establish a local entity, something which can be costly and complex.

Save Money And Time with A Papua New Guinea EOR

What Are the Benefits of a Papua New Guinea EOR?

Working with an EOR in Papua New Guinea helps make every part of hiring and maintaining a local labor force easier. By assuming responsibility for the entire employment process, an EOR will save foreign employers time and resources while also minimizing the risks of potential issues and disputes. While a fee must be paid for the services of an EOR, the savings and benefits are likely to far outweigh this comparatively small cost.

Some of the primary benefits of working with a Papua New Guinea EOR include:

Legal protection: An EOR in Papua New Guinea is more than an intermediary service that connects local workers to international roles. It assumes the role of a legal employer on behalf of foreign clients, taking responsibility for compliance with regulations and, crucially, liability for any issues or disputes that arise. When hiring in an unfamiliar territory, this layer of protection can be a huge benefit.
Cost efficiency: In addition to knowing how to access the best talent in Papua New Guinea, an experienced EOR will understand what packages need to be offered to attract each worker to the roles on offer. By knowing the market, an EOR can ensure their foreign clients pay only what is required to get the right workers for their needs. An EOR can also help streamline the process to prevent wasted expenditure at all stages.
Cultural understanding: With over 800 languages spoken and a huge level of cultural diversity, hiring in Papua New Guinea can be challenging for anyone unfamiliar with the nuances of local communities and traditions. An experienced EOR will help create mutually beneficial relationships by understanding how to communicate with local workers alongside expectations of work-life balance and what form a respectful relationship between a worker and their employer should take.

Horizons is Best IN Class

Why Choose Horizons?

Horizons stands out as a Papua New Guinea EOR through:

A strong regional presence in the Asia-Pacific region, meaning senior management are on the ground to deal with any issues.
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.
Cost-effective solutions. At $499 per employee, per month, no EOR in Papua New Guinea is more affordable. The cost is 100% transparent (onboarding, offboarding, deposit, no extra charges).
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
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 Papua New Guinea EOR

How Does a Papua New Guinea EOR Work?

An EOR works by managing a triangle of relationships between itself, local workers within Papua New Guinea, and foreign businesses seeking to hire those workers. In effect, it acts as a local entity for foreign clients, which then manages all aspects of their human resources within the territory. The workers are employed directly by the EOR and then assigned to positions within the client company.

This is a complex service which includes a number of stages, such as:

Hire your employees: The first step in establishing a workforce is to hire the workers. A Papua New Guinea EOR will do this either through the standard process of advertising and interviewing or by making offers to an existing talent pool who have already registered interest in such opportunities.
Manage employment contracts and onboarding: Once the right talent has been found for the roles on offer and terms of employment have been agreed upon, a Papua New Guinea EOR will draft contracts to be signed and begin onboarding. Any locally mandated processes will be completed along with those requested by the client company. The workers will then be assigned roles and begin their new employment.
Process payroll and handle employment taxes: The international client business covers the costs of every worker along with any agreed fees. As the legal employer, however, it is the Papua New Guinea EOR that directly handles payroll and any associated taxes for each contracted employee.
Administer benefits: In addition to salaries, the Papua New Guinea EOR will also administer any other benefits due to each of its workers. These include bonuses and allowances alongside entitlements for annual leave, sickness, or other paid absences. Essentially, anything due to a worker as part of their employment will be provided by the EOR.
Take care of exit procedures: When any worker’s employment comes to an end, for whatever reason, certain protocols need to be followed. These can include notice requirements, severance pay, and a whole host of administration. The EOR will ensure these are completed properly before, where necessary, beginning the process of hiring a replacement.

stay compliant with Papua New Guinea labor laws

Labor Laws

Any EOR operating in Papua New Guinea will take full responsibility for ensuring all local labor laws are complied with. From hiring and contracting through compensation and benefits to any termination processes, the EOR will accept full liability for resolving all issues and disputes.

Employment contract types

While the Papua New Guinea authorities acknowledge that verbal contracts can be binding, written contracts are recommended for all working relationships. As dictated by the Employment Act 1978, these contracts should contain clauses specifying the employee is aged 18 years or older. They should also include the details of all parties, the job title, role description, compensation, entitlements, benefits, and any termination processes. These contracts may need to be approved by the Department of Labor and Industry.

No specific contract types are outlined by the legal framework in Papua New Guinea so all terms must be fully negotiated, agreed, and detailed within every worker’s contract.

Project-based

Fixed-term

Indefinite

Working hours in Papua New Guinea

As outlined by the Employment Act 1978, a standard working week in Papua New Guinea is 44 hours. This is broken down to eight hours from Monday to Friday and four hours on Saturday. A 24-hour rest period should be granted every week; this is usually taken on a Sunday, but different patterns can be negotiated. Employers in Papua New Guinea can legally require employees to work a “reasonable” amount of overtime if it is necessary to keep the business running. However, this should be paid at 150% for weekdays and 200% for Sundays or public holidays and should never take the total work to more than 12 hours in a single day. Any work undertaken on a Sunday or public holiday cannot be required and must only take place by mutual consent.

Overtime must be compensated in the following way:

Holiday Schedule in Papua New Guinea [2024]

Workers in Papua New Guinea are entitled to paid leave for nine public holidays each year, these include New Year’s Day, the Queen’s Birthday, National Remembrance Day, Independence Day, and holidays for both Easter and Christmas. Any additional public holidays are granted at the employer’s discretion though some regional variations may be expected by workers in those areas.

Date	Holiday name
1 Jan, 2024	New Year’s Day
24 Feb, 2024	Remembrance Day
30 Mar, 2024	Good Friday
31 Mar, 2024	Holy Saturday
1 Apr, 2024	Easter Sunday
2 Apr, 2024	Easter Monday
11 Jun, 2024	King’s Birthday
26 Aug, 2024	Repentance Day
16 Sep, 2024	Independence Day
25 Dec, 2024	Christmas Day
26 Dec, 2024	Boxing 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:

Sick leave in Papua New Guinea

After six months of service has been completed, workers in Papua New Guinea become entitled to six days of paid sick leave per year, authorized on the presentation of a medical certificate. Unused sick days can be accrued for use in following years up to a total of 18 plus the current year’s six.

Less than 6 months of sick leave:

(percentage of regular wages owed to the employee)

Over 6 months of sick leave

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 Papua New Guinea

Once a female worker has served at least 108 days in a 12-month period or 90 days within six months, she becomes entitled to paid maternity leave. This should total at least six weeks. Any paternity allowance must be negotiated at the time of hire. For compassionate purposes, workers in Papua New Guinea are also entitled to three days of paid leave after the death of a spouse, parent, grandparent, in-law, sibling, or child.

Annual leave in Papua New Guinea

All employees in Papua New Guinea are entitled to at least 14 days of paid annual leave in addition to public holidays. If contractually agreed, these days can be carried over and accumulated for up to four years. Full payment for annual leave should be made in a single sum before the leave is taken.

Termination & severance in Papua New Guinea

Except for circumstances such as breaking the law, committing fraud, neglecting duties, or taking significant unauthorized leave, every employee in Papua New Guinea is entitled to written notice and severance pay upon termination of their employment. As dictated by the Employment Act 1978, any worker who has completed less than four weeks’ notice should be given one day’s notice. This rises to one week’s notice after four weeks of service, two weeks after one year of service, and four weeks after five years of service. Severance pay entitlement begins at four week’s salary during the second year of employment and rises after each additional year.

Papua New Guinea's compulsory social security contributions

Social security contributions are primarily managed through the National Superannuation Fund (Nasfund) and Nambawan Super, which are the main superannuation funds for private sector employees. These contributions are mandatory for all private sector employees who are members of the superannuation funds (Nasfund or Nambawan Super)

Papua New Guinea social security for foreigners

Foreign employees are generally included if they are permanent residents or have an employment contract of more than 3 months. However, the specific application can vary based on the fund’s rules and the employment contract.

Individual income tax

Income tax system is progressive, meaning that higher income levels are taxed at higher rates. The taxation system includes several different tax brackets with varying rates.

For non-residents, the income tax rate is generally a flat rate of 42%.

Health insurance

The public health system is primarily funded and operated by the government. It provides healthcare services through a network of hospitals, clinics, and health centers. Services are often free or provided at a minimal cost.

Private health insurance is available in PNG and is often used by expatriates, higher-income individuals, and those seeking additional coverage beyond what the public system offers.

hassle-free Papuans compensation & benefits

Compensation & Benefits

Papua New Guinea compensation laws

The Industrial Relations Act 1962 placed minimum wage standards for Papua New Guinea in the hands of the Minimum Wages Board (MWB). While this is subject to change, the last minimum wage requirement for local workers was set at PGK 3.50 per hour – a little under $1.

13 month salary in Papua New Guinea

No 13th-month salary payments or any other bonuses and allowances are required by law in Papua New Guinea. If they are to be paid, these should be negotiated at the time of hire.

Social security for Papuans nationals

While no specific social security contributions are mandated in Papua New Guinea, several taxes are taken directly from employees’ wages. It is expected that employers contribute 8.4% of gross salaries to an authorized superannuation fund. The employee should also contribute 6% of their after-tax salary to this fund.

Papua New Guinea Employer Of Record Peo

Navigation

Hire in Papua New Guinea

What Is a Papua New Guinea EOR?

What Are the Benefits of a Papua New Guinea EOR?

Why Choose Horizons?

How Does a Papua New Guinea EOR Work?

Labor Laws

Employment contract types

Working hours in Papua New Guinea

Compensation & Benefits

Frequently asked questions

Hire borderless talent with Horizons

Hire in Papua New Guinea in 24h without your own local entity.

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

Frequently asked questions

What labor laws must be followed when using an EOR in Papua New Guinea?

Papua New Guinea has labor laws dictating what clauses should be included in employment contracts. These laws also require a minimum wage and several other benefits and protections for both employees and employers. These laws are wide-ranging and subject to change, but an EOR should be ideally placed to navigate them on behalf of foreign companies.

How does an EOR handle local employee benefits in Papua New Guinea?

As part of its payroll responsibilities, an EOR will directly administer all employee benefits and allowances mandated by local labor laws or contractually agreed upon at the time of hire.

Papua New Guinea EOR & PEO

Start hiring in Papua New Guinea

Simple, compliant hiring with Horizons EOR & PEO

Hire in Papua New Guinea

Facts & Stats

EOR Platform

EOR Cost

Time-to-hire

Contracts

Local benefits

180+ Countries

hire employees in Papua New Guinea

What Is a Papua New Guinea EOR?

Save Money And Time with A Papua New Guinea EOR

What Are the Benefits of a Papua New Guinea EOR?

Horizons is Best IN Class

Why Choose Horizons?

Step-by-step Papua New Guinea EOR

How Does a Papua New Guinea EOR Work?

stay compliant with Papua New Guinea labor laws

Labor Laws

Employment contract types

Project-based

Probationary period

Termination

Severance

Fixed-term

Probationary period

Termination notice period

Severance

Indefinite

Probationary period

Termination notice period

Severance

Working hours in Papua New Guinea

Overtime must be compensated in the following way:

For a regular workday:

For a rest day:

For a statutory holiday:

Paid time off

Under 1 year of employment

1-10 years of employment

10-20 years of employment

20+ years of employment

Sick leave in Papua New Guinea

Less than 6 months of sick leave:

Under 1 year of employment

1-10 years of employment

10-20 years of employment

20+ years of employment

Over 6 months of sick leave

Under 1 year of employment

1-3 years of employment

3+ years of employment

Maternity leave in Papua New Guinea

Annual leave in Papua New Guinea

Termination & severance in Papua New Guinea

Papua New Guinea's compulsory social security contributions

Papua New Guinea social security for foreigners

Individual income tax

Health insurance

hassle-free Papuans compensation & benefits

Compensation & Benefits

Papua New Guinea compensation laws

13 month salary in Papua New Guinea

Social security for Papuans nationals

Hire in Papua New Guinea in 24h without your own local entity.

Frequently asked questions

180+

100+

24x5

130+

180+

100+

24x5

130+

The Global Workforce Payment Platform

What to expect when you connect with Horizons