Employer of Record in Papua New Guinea

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 Papua New Guinea 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 Papua New Guinea below, to avoid any compliance issues.

Onboarding Process

We can help you get a new employee started in Papua New Guinea 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.

Hiring in Papua New Guinea means navigating local labor laws, mandatory employee benefits, payroll taxes, and strict employment regulations. These requirements aren’t always intuitive, especially if your team lacks in-country legal or HR expertise. An Employer of Record steps in as the legal employer for your hires, managing all compliance-related responsibilities. This includes issuing locally compliant contracts, registering employees with relevant authorities, processing payroll, and handling social security contributions and taxes in line with national laws.

By handing over these complexities to an EOR, your business avoids costly compliance errors and the time required to master local employment standards. You can focus on growing your team and operations while trusting that the legal and administrative foundation is solid. Whether you're making one strategic hire or building out an entire team, the EOR keeps you compliant, removes guesswork, and reduces the risk of legal or financial penalties, without requiring you to open a legal entity or maintain a local HR team.

In Papua New Guinea, employers are required to comply with various payroll taxes, including income tax withholding, superannuation contributions, and local levies. Employers must withhold income tax based on progressive rates, which range from 0% to 42%, and contribute to mandatory employee superannuation contributions. Papua New Guinea does not have a formal social security system, but employers with 15 or more employees must register with Papua New Guinea's retirement program (superannuation fund).

Employer contribution rate is 8.4% of the employee's salary, while employees contribute 6%. Employers also need to remit local levies and training levies on annual payrolls exceeding PGK 200,000.

Payroll is typically processed on a fortnightly basis, and failure to comply with tax regulations can result in significant fines and penalties. To streamline these processes, employers can benefit from using payroll management software, which consolidates payroll data, ensures compliance, and helps with the efficient handling of complex tax calculations and reporting requirements.

As of 2025, the statutory minimum wage in Papua New Guinea is PGK 3.50 per hour.

Running payroll in Papua New Guinea is complex, especially when you're hiring without a local entity. Local laws determine everything from tax withholdings and reporting deadlines to benefit contributions and currency requirements. Missteps can lead to fines, payment delays, or unhappy employees. An Employer of Record takes this burden off your plate by handling the full payroll process. Acting as the legal employer, the EOR ensures you remain compliant with all payroll-related obligations, while still allowing you to manage your team’s day-to-day work and performance.

Key Ways an EOR Supports Payroll in Papua New Guinea:

• Compliance Assurance: Ensures payroll aligns with local tax laws, labor regulations, and statutory deadlines.
• Payroll Processing & Tax Management: Calculates salaries, applies correct tax withholdings, and submits required reports.
• Benefits & Social Security Contributions: Manages employer obligations for pensions, health insurance, and other legal entitlements.
• Contract Generation & HR Administration: Drafts compliant employment contracts and supports onboarding, terminations, and HR tasks.
• Currency Payments: Issues timely salary payments in local currency, ensuring employees are paid accurately and on time.

In Papua New Guinea, work permits and visas are essential for employers hiring foreign workers. The process involves submitting applications, paying fees, and meeting specific eligibility criteria. The key visa types include the Employment Visa, Work Permit, and Short-term Work Visa. Employers must demonstrate the need for foreign labor, ensure compliance with local labor laws, and submit supporting documentation for sponsorship.

Mandatory Leave Entitlement in Papua New Guinea

The annual leave entitlement in Papua New Guinea is 14 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

An Employer of Record (EOR) helps businesses manage annual leave, paid time off (PTO), and local holidays across the globe, including in Papua New Guinea. By partnering with an EOR, companies ensure full compliance with local labor laws in Papua New Guinea when it comes to annual leave and time-off management.  EOR providers like Playroll offer platforms that simplify tracking and managing employee time off in Papua New Guinea. By outsourcing this responsibility to Playroll, you can streamline leave management, ensure compliance, and free up time to focus on other business priorities.

Public Holidays in Papua New Guinea

Papua New Guinea observes 11 national public holidays, with dates for certain holidays, such as Easter, varying each year based on the Christian calendar.

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Administering employee benefits in Papua New Guinea requires more than just offering a standard package. Local labor laws often mandate specific entitlements, from health insurance to paid leave, and the rules can change without warning. Papua New Guinea also has unique standards for what an attractive, competitive benefits package looks like. For businesses without in-country expertise, meeting these obligations and expectations can quickly become risky and expensive. An Employer of Record acts as your compliance partner, ensuring all benefits are provided according to the latest legal requirements and without administrative strain on your internal team.

Beyond compliance, an EOR brings clarity and consistency to a process that’s often complex and fragmented. They handle enrollments, ensure accurate employer contributions, manage communications with local providers, and keep everything properly documented. This means employees get what they’re entitled to, and you avoid the headache of navigating benefits systems in a foreign market. Whether you're hiring one person or building a larger team, an EOR provides a clear, dependable structure that lets you offer competitive benefits without taking on unnecessary risk or workload.