Employer of Record in Lesotho

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

Businesses can only operate smoothly in Lesotho if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Lesotho below, to avoid any compliance issues.

Employment Contract Requirements

Employment contracts in Lesotho can be verbal or written, with a preference for written agreements for legal recognition. These contracts, in Lesotho or English, should detail essential aspects such as:

• Identification of both parties
• Commencement date
• Job responsibilities and duties
• Employees compensation and other benefits

Onboarding Process

We can help you get a new employee started in Lesotho quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Lesotho

The standard working hours are 45 hours per week, distributed over either a five-day or six-day reference period. In a five-day workweek, the daily working hours are 9 hours, whereas in a six-day workweek, they are 8 hours for five days and 5 hours for the sixth day.

Overtime in Lesotho

In Lesotho, overtime work is limited to 11 hours per week, with employees entitled to an additional payment of at least 25% for overtime hours, totaling 125% of their regular wage. On weekends and holidays, this extra payment can rise to 200% of the employee's wage.

Probation Period in Lesotho

In Lesotho, the probationary period for employees should not surpass four months, as stipulated by the Labor Code.

Setting up a local legal entity in Lesotho can be time-consuming and expensive. It often involves complex paperwork, local representation, banking, registrations, and ongoing tax filings, which isn't cost-effective if you're simply looking to hire a few employees or test the market. An Employer of Record removes these barriers entirely. Instead of spending months establishing a presence, an EOR lets you hire and onboard employees within days while staying fully compliant.

This enables faster market entry and greater agility. Whether you’re launching a pilot program, supporting a regional client, or adding specialized talent, you don't need to commit to long-term infrastructure to explore new business opportunities. The EOR handles local employment logistics while you retain day-to-day oversight of your hires. This model lets you scale up or down based on business needs, giving you more flexibility with less overhead and risk.

Fiscal Year in Lesotho

April 1st - March 31st is the 12-month accounting period that businesses in Lesotho use for financial and tax reporting purposes.

Payroll Cycle in Lesotho

The payroll cycle in Lesotho is usually Monthly, with employees being paid last day of the month.

Minimum Wage in Lesotho

In April 2025, Lesotho’s government enacted a 5 percent increase to all sectoral minimum wages for the 2025/2026 financial year, bringing factory‐sector rates to between LSL 2 724 and LSL 3 041 per month; construction to LSL 3 226–LSL 5 664; wholesale and retail to LSL 3 088–LSL 3 276; small retail to LSL 2 792–LSL 2 950; hospitality to LSL 2 779–LSL 3 058; and domestic workers to LSL 872.

Bonus Payments in Lesotho

There is no mandatory provision for a 13th-month salary in Lesotho.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 0% on top of the employee salary in Lesotho.

Employee Payroll Tax Contributions

In Lesotho , the typical estimation for employee payroll contributions cost is around 11%.

Individual Income Tax Contributions

Lesotho imposes individual income tax at progressive rates, ranging from 20% to 30%.

Pension in Lesotho

The public pension is funded by the state and does not require contributions from the employer.

One of the biggest risks in global hiring is payroll mismanagement. In Lesotho, even small errors in tax reporting or social contribution payments can trigger audits, fines, or reputational damage. For companies without in-country expertise, the risk isn’t worth taking. An Employer of Record removes this burden by owning the legal responsibility of payroll, executing every step with built-in compliance.

Key Ways an EOR Supports Payroll in Lesotho:

• Mitigates Compliance Risk: Oversees all legal obligations for payroll, tax filings, and recordkeeping.
• Local Regulatory Expertise: Interprets and applies Lesotho’s latest labor and tax changes in real time.
• Free Processing: Reduces mistakes in wage calculations and reporting through built
• Payroll Record Management: Maintains compliant payroll audit trails and documentation for each employee.

In Lesotho, employers seeking to hire foreign talent must adhere to specific immigration procedures, including obtaining the appropriate work permits such as Short-Term or Long-Term Work Permits. The application process involves securing a job offer, gathering necessary documentation, and submitting applications to the Ministry of Home Affairs. Employers are responsible for sponsoring foreign employees, which includes providing essential documents like a business permit and tax clearance certificate. Fees for work permits vary, with a two-year permit costing M3,000.00, plus additional application and card fees. Processing times have been reduced to approximately two weeks, and permits are typically valid for up to two years, with renewal processes in place. While Lesotho does not currently offer a specific visa for digital nomads, employers must be aware of common challenges in hiring foreign nationals, such as navigating complex immigration procedures and ensuring compliance with labor laws. Engaging with immigration experts and implementing comprehensive onboarding programs can aid in overcoming these challenges.

Mandatory Leave Entitlement in Lesotho

The annual leave entitlement in Lesotho is 12 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Lesotho

Lesotho observes a total of eleven national public holidays.

Paid Time Off in Lesotho

Employees in Lesotho are entitled to up to 12 working days of annual leave per year, which equates to one day for each month of continuous employment with the same employer.

Maternity Leave In Lesotho

Employees in Lesotho are entitled to paid maternity leave, typically lasting 14 weeks, with 7 weeks before and 7 weeks after childbirth. In cases of pregnancy-related illness or complications, women may be eligible for up to eight weeks of additional leave. There is no obligation on the employer to pay for this leave.

Paternity Leave In Lesotho

Employees are entitled to 14 days of paternity leave.

Sick Leave In Lesotho

Employees in Lesotho are entitled to unpaid sick leave during the initial six months of continuous employment. After this period, they are eligible for up to 12 days of full-pay sick leave and up to 24 days of half-pay sick leave per 12 months of continuous employment. The employer is responsible for providing this payment during sick leave.

Parental Leave In Lesotho

There is no provision for shared parental leave that allows parents to divide a set amount of leave between them. Besides maternity and paternity leave entitlement, 14 days of bonding leave is provided for adoptive parents.

In Lesotho, benefits play a central role in attracting and retaining top talent. Employees often expect more than just a paycheck – they're looking for stability, healthcare coverage, pension plans, and other perks that show a company is invested in their well-being. If you're not familiar with what’s standard or required, you risk falling short. An Employer of Record helps bridge that gap by administering a locally competitive benefits package that meets both legal requirements and employee expectations.

An EOR doesn't just check boxes, they make sure your employees receive benefits that are timely, properly communicated, and well-managed from the moment they’re onboarded. From managing healthcare contributions to adjusting for regional differences in leave or bonus entitlements, an EOR acts as both a legal and operational partner. The result is a better employee experience, less administrative burden on your internal team, and greater confidence that your offer is aligned with what top candidates in Lesotho actually want and need.

Termination Process in Lesotho

Either the employer or the employee can terminate the employment relationship in Lesotho. Dismissal needs to be justified based on the company's operational needs or related to the employees capacity or conduct. Employers must provide a written explanation for the dismissal to the affected employee.

Notice Period in Lesotho

As per the Labour Code in Lesotho:

• 7 days notice for less than 6 months of service
• 14 days notice for less than 1 year of service
• 1 month notice for more than 1 year of service
• 3 months notice for more than 10 years of service, unless specified differently in a collective agreement.

Severance in Lesotho

As per the Labour Code in Lesotho, severance pay is determined by years of service. Employees with over a year of continuous service receive two weeks' pay for each completed year. However, employees dismissed due to misconduct are not eligible for severance pay.