How to Run Payroll in Sierra Leone: Employment Taxes & Setup

Milani Notshe

Research Specialist

Last Updated

February 13, 2026

In This Guide

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Running payroll in Sierra Leone involves many moving parts before your team sees money land in their accounts. Each month you need to calculate gross-to-net correctly, apply statutory withholdings and employer contributions, issue compliant payslips, plus file and remit on schedule. If anything slips through the cracks, you could face penalties, back-pay exposure, and unnecessary friction with your people.

If you’re hiring in Sierra Leone, whether you’re building a local presence or expanding your global footprint, this guide is for you. We’ll walk through the choices and compliance requirements that have the biggest impact on your speed and risk, from entity vs. no-entity hiring to worker classification and the statutory bodies you’ll interact with along the way. By the end, you’ll know exactly what to expect and how to keep payroll running smoothly, wherever you’re hiring.

Key Takeaways

Payroll cycle: Employers in Sierra Leone generally process payroll on a monthly basis.

Tax filing: PAYE income tax and social security contributions are typically reported and remitted monthly.

Employer taxes: Employer obligations include contributions to the National Social Security and Insurance Trust (NASSIT), calculated as percentages of employee earnings.

Tax year: Sierra Leone follows the calendar year for tax purposes, from January 1 to December 31.

Payroll processing methods: Payroll is commonly handled in-house or outsourced to providers familiar with Sierra Leonean tax and social security requirements.

How to Choose Your Payroll Structure in Sierra Leone

Expanding into Sierra Leone? Building a compliant payroll setup involves much more than simply paying salaries. You’ll be responsible for employment compliance, monthly tax and social declarations, and mandatory benefits. Even small delays in filings or payments can lead to real penalties.

You have several operating models to choose from to make this easier. The right one depends on your legal footprint, your appetite for risk, and how quickly you need to start hiring. Let’s break down the main options and when to use each.

1. No Local Entity in Sierra Leone: Use an Employer of Record (EOR)

If you don’t yet have a legal entity in Sierra Leone, an Employer of Record is usually the fastest and lowest-risk way to hire. An EOR becomes the legal employer on paper, provides locally compliant employment contracts, and manages payroll under local regulations, while you continue to direct the work and manage performance.

This model is ideal for:

Testing a new market
Hiring your first team members
Scaling a distributed workforce without building local infrastructure,

Why it’s the fastest and least risky option:

You skip the lengthy process (and cost) of setting up an entity.
All local registrations, monthly declarations, and statutory payments are handled by a provider already set up in-country, dramatically reducing your compliance risk.

2. You Have a Sierra Leone Entity: Run In-Country Payroll

If you already operate a local entity, or you’re planning to establish one, running payroll directly gives you maximum flexibility and control. You can set your own policies, design benefits, and align payroll closely with your finance and internal approval processes. But this also comes with greater operational responsibility.

What you’re responsible for:

Registering with relevant authorities and maintaining compliance with statutory bodies (often involving CSS/IPRES or similar local institutions).
Accurately calculating and remitting payroll taxes and contributions every month – plus handling year-end requirements.
Issuing compliant payslips and maintaining audit-ready payroll documentation.

When this option makes sense:

You’re hiring at scale and want payroll fully “in-house,” even if you partner with a local provider for execution.
You need deeper integration with finance systems or custom benefit structures.

If you want to keep the entity but offload the admin, many employers choose global payroll services to handle calculations, filings, and payments while they remain the legal employer.

3. Contractors Only: Use Contractor Management

Paying independent contractors is often simpler than setting up full payroll, especially for short-term or highly specialized work.

However, you need to watch out for misclassification risk. In Sierra Leone, as in many jurisdictions, someone may legally qualify as an employee based on how they work – not what their contract says. If they’re under your direction, working like an employee, you may be responsible for full employer obligations.

When contractor payments work well:

You need specialised expertise for a defined scope or timeframe
The contractor operates independently, not under your control or supervision

You can also use contractor management services to streamline compliant contracts, invoicing, and payments.

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What To Know About Payroll Processing In Sierra Leone

Payroll in Sierra Leone centers on four main obligations: Pay As You Earn (PAYE) income tax withholding, social security contributions to the National Social Security and Insurance Trust (NASSIT), skills development and other statutory levies, and periodic payroll reporting to the National Revenue Authority (NRA). Your team must calculate, withhold, remit, and report these amounts accurately for every pay period, while tracking changing thresholds and rates that can differ by income level and, in some cases, business size or sector.

Non-compliance can trigger penalties, interest, and audits from the NRA or NASSIT, as well as delayed salary payments and loss of employee trust if net pay is miscalculated. This guide walks you through how to structure payroll calculations, align with filing and payment deadlines, and set up compliant processes whether you operate through your own entity or via an Employer of Record.

Types Of Payroll Taxes In Sierra Leone

In Sierra Leone, payroll taxes are primarily driven by PAYE income tax, mandatory NASSIT social security contributions, and the Skills Development Levy collected by the National Revenue Authority. Each has its own base, rate structure, and payment schedule that you must integrate into your monthly payroll cycle.

Pay As You Earn (PAYE) Income Tax

PAYE is the employee income tax that you withhold at source and remit to the National Revenue Authority on a monthly basis. It is calculated on taxable employment income using progressive rates of 0%, 15%, 20%, and 30% depending on annual income brackets, and you as the employer are fully responsible for correct calculation, deduction, and payment.

There is no separate employer PAYE rate, but failure to withhold and remit the correct employee tax can result in penalties, interest, and back assessments after NRA audits. Returns and payments are typically due by the 15th of the month following payroll, and late or underpaid PAYE can also expose directors to personal liability in serious cases.

NASSIT Social Security Contributions

NASSIT is Sierra Leone’s mandatory social security scheme that funds pensions and related benefits, and both employer and employee contribute. The standard combined rate is 15% of insurable earnings, with employers contributing 10% and employees contributing 5%, subject to NASSIT’s insurable earnings ceiling where applicable.

You must deduct the 5% employee share from gross salary, add your 10% employer share, and remit the full 15% to NASSIT, usually by the 15th of the following month together with the prescribed schedules. Late payment attracts surcharges and interest, and persistent non-compliance can lead to enforcement actions, including recovery proceedings and restrictions on doing business with public bodies.

Skills Development Levy

The Skills Development Levy is a payroll-based charge collected by the National Revenue Authority to fund vocational and skills training initiatives. It is generally levied at around 1% of the total payroll cost for qualifying employers, with the cost borne by the employer rather than the employee.

Liable employers must calculate the levy on monthly payroll, file the relevant return, and pay it alongside other NRA obligations, typically on a monthly or quarterly basis depending on registration conditions. Underpayment or non-filing can result in penalties similar to other NRA-administered taxes, and the levy is often reviewed during tax audits that compare payroll records with corporate tax filings.

How To Pay Employees In Sierra Leone

Most employers in Sierra Leone pay salaries via bank transfer in Sierra Leonean leones (SLL), although cash payments are still used in more informal or remote settings. You should align your pay frequency with employment contracts and common practice, typically monthly, and ensure that funds clear on or before the agreed payday so that statutory deductions can be remitted on time.

If you do not have a local entity, you will usually rely on an Employer of Record or a local payroll partner that can hire workers compliantly and run payroll in SLL on your behalf. Payslips should clearly show at least gross pay, taxable income, PAYE withheld, NASSIT contributions, other deductions, net pay, and the pay period, and they are typically provided electronically or in printed form for each pay cycle.

Payment Method: Use local bank transfers in Sierra Leonean leones for most employees, reserving cash only where banking access is limited.
Pay Frequency: Set a consistent monthly pay date in contracts and ensure payroll cutoffs allow time for tax and NASSIT calculations.
No-Entity Hiring: Engage an Employer of Record if you lack a Sierra Leonean entity but need to hire and pay staff compliantly.
Payslip Content: Include gross earnings, itemised allowances, PAYE, NASSIT, other deductions, and net pay for each period.
Bank Details: Collect accurate employee bank account information and verify names against national ID to avoid rejected transfers.
Record Keeping: Store payroll records and payslips securely for several years to support NRA and NASSIT audits.
Foreign Staff: Confirm whether expatriate employees are taxable and insurable in Sierra Leone or under special arrangements.

Payroll Set Up Checklist (Entity Vs No-Entity)

Getting payroll set up correctly in Sierra Leone determines how smoothly you can hire, pay, and stay compliant with the National Revenue Authority and NASSIT. Your approach will differ depending on whether you operate through a registered local entity or rely on an Employer of Record to employ staff on your behalf.

With an entity, you handle registrations, filings, and payments directly, while a no-entity model shifts most operational risk and administration to your Employer of Record or payroll partner. In both cases, you still need internal controls to validate calculations, approve payments, and reconcile payroll with your general ledger.

Incorporation Or EOR Decision: Decide whether to register a local company or use an Employer of Record based on headcount, timeline, and long-term plans.
NRA Registration: Obtain a Taxpayer Identification Number and register for PAYE and any applicable levies with the National Revenue Authority.
NASSIT Registration: Register the business and all eligible employees with NASSIT to enable mandatory social security contributions.
Banking Setup: Open a local SLL-denominated bank account dedicated to payroll and statutory payments.
Payroll Policies: Define pay frequency, overtime rules, allowances, and benefits in line with Sierra Leone’s labour laws and contracts.
Data Collection: Gather employee IDs, contracts, bank details, NASSIT numbers, and tax status declarations before first payroll.
Payroll Software: Implement payroll software or a provider that supports Sierra Leonean tax tables and statutory reporting formats.
Approval Workflow: Establish cutoffs and approval steps for timesheets, variable pay, and final payroll sign-off.
Compliance Calendar: Build a calendar for PAYE, NASSIT, and levy due dates and align it with your internal accounting cycle.

Example Of Salary Tax Calculation

Assume an employee earns a monthly gross salary of SLL 15,000,000 and is fully subject to PAYE and NASSIT. You will first determine taxable income for PAYE using the annualised progressive tax bands, then calculate NASSIT on insurable earnings, and finally arrive at net pay after all statutory deductions.

The goal is to create a repeatable process: annualise the salary, apply the correct tax brackets, convert back to monthly PAYE, compute NASSIT at 5% employee and 10% employer, and confirm that the totals reconcile with your payroll ledger. This structure helps your team scale payroll while maintaining compliance and audit readiness.

Step 1 – Annualise Salary: Multiply SLL 15,000,000 by 12 to get annual gross income for applying PAYE brackets.
Step 2 – Apply PAYE Bands: Calculate tax at 0%, 15%, 20%, and 30% across the relevant income brackets to find total annual tax, then divide by 12 for monthly PAYE.
Step 3 – Compute NASSIT: Apply 5% employee and 10% employer NASSIT to the monthly insurable earnings, respecting any NASSIT ceiling.
Step 4 – Derive Net Pay: Subtract monthly PAYE and the 5% employee NASSIT from gross salary to get net pay.
Step 5 – Record And Reconcile: Post payroll entries to your accounting system and reconcile PAYE and NASSIT control accounts with payment receipts.

Submitting Employee Tax In Sierra Leone

To submit employee taxes in Sierra Leone, you will typically file PAYE returns with the National Revenue Authority and NASSIT schedules with the social security office, then pay via bank transfer or designated payment channels. Having accurate tax identification numbers, payroll period details, and reconciled payroll reports is essential for smooth submission and to avoid queries or penalties.

NRA PAYE Return: Complete the monthly PAYE schedule and submit it to the National Revenue Authority using their prescribed format or portal.
NASSIT Schedule: Prepare and file the monthly NASSIT contribution schedule listing each employee’s insurable earnings and contributions.
Bank Payment: Pay PAYE, NASSIT, and any levies via bank transfer using the correct NRA or NASSIT reference numbers.
Portal Or Counter Filing: Where available, use electronic filing; otherwise, submit forms and proof of payment at NRA or NASSIT offices.
Third-Party Provider: If using an Employer of Record or payroll provider, review their filings and payment confirmations each month.
Document Retention: Keep stamped returns, payment receipts, and payroll reports for the statutory retention period to support audits.

Payroll Tax Due Dates In Sierra Leone

Tax Type	Due Dates
PAYE Income Tax	On or before the 15th day of the month following the month in which salaries are paid.
NASSIT Social Security Contributions	On or before the 15th day of the month following the month in which salaries are paid.
Skills Development Levy	Generally by the 15th day of the month following the payroll month, or as specified in the levy registration terms.
Annual PAYE Reconciliation	Typically due within three months after the end of the tax year on 31 December.
Annual NASSIT Reconciliation	Usually due within the first quarter following the end of the calendar year.
Corporate Income Tax Return With Payroll Schedules	Commonly due within six months after the end of the company’s financial year.

Running Payroll Processing in Sierra Leone

So, what does it actually take to run payroll in Sierra Leone? It involves calculating monthly salaries, applying the right statutory deductions, and making sure your team gets paid accurately and on time, while staying fully compliant with local tax and labour laws.

Let’s walk through what that looks like in practice:

Monthly Payroll Workflow

Gather all the essentials: hours worked, leave taken, new joiners, leavers, and any salary or benefit changes.
Double-check timesheets, leave balances, overtime, and any variable pay to make sure everything is accurate.
Work out gross earnings, including base salary, bonuses, commissions, and allowances.
Apply mandatory and voluntary deductions, like income tax, pension contributions, benefits, and any company-specific deductions. Then, calculate net pay after all deductions.
Run internal reviews, compare with previous payroll cycles, and get the necessary approvals.
Pay employees via bank transfer and share payslips through email or your payroll system.
Send statutory payments and required reports to tax authorities.
Update your records and ensure payroll entries flow correctly into your accounting system.
Share payroll summaries with finance and address any open questions or discrepancies.

How Playroll Streamlines Processing

Keeping track of all these steps, especially in a new market, is no easy task. Regulations change, requirements shift, and it’s easy for things to fall through the cracks. Playroll makes this effortless by managing the entire payroll process for you: onboarding employees, handling calculations and deductions, issuing payslips, transferring funds in Sierra Leonean leone, and taking care of statutory filings and compliance.

Income Tax And Social Security In Sierra Leone

Understanding the tax obligations for both employers and employees is crucial when operating in Sierra Leone's business landscape. This section explains how taxes and statutory fees affect payroll and individual earnings in Sierra Leone.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 11% – 12% on top of the employee salary in Sierra Leone. This mainly reflects the 10% NASSIT employer share plus around 1% for the Skills Development Levy and any minor statutory charges that may apply to specific sectors.

Tax Type	Tax Rate
NASSIT Employer Contribution	10% of insurable earnings
Skills Development Levy	1% of total payroll for qualifying employers
Work Injury Insurance (Typical Market Rate)	Approximately 1% of payroll, depending on insurer and risk class
PAYE Employer Withholding Obligation	0% rate but full responsibility for withholding and remittance
Withholding Tax On Certain Benefits	Varies by benefit type, commonly 5% – 10% where applicable

Employee Payroll Tax Contributions

In Sierra Leone, the typical estimation for employee payroll contributions cost is around 20%.

Tax Type	Tax Rate
PAYE Income Tax – Lower Band	15% on income within the first taxable band above the tax-free threshold
PAYE Income Tax – Middle Band	20% on income within the middle band
PAYE Income Tax – Top Band	30% on income above the upper threshold
NASSIT Employee Contribution	5% of insurable earnings
Voluntary Pension Top-Ups	Employee-elected, rate depends on scheme rules
Other Statutory Deductions	Variable, applied only where specific sectoral rules exist

Individual Income Tax Contributions

Individual income tax in Sierra Leone is charged on a progressive basis, with higher earners paying a larger percentage of their income in PAYE. Employers apply these brackets through payroll, but individuals may also be assessed directly by the National Revenue Authority if they have additional income sources.

Income Bracket	Tax Rate
0 – 7,200,000 SLL (annual)	0%
7,200,001 – 28,800,000 SLL (annual)	15%
28,800,001 – 43,200,000 SLL (annual)	20%
Above 43,200,000 SLL (annual)	30%

Pension in Sierra Leone

Pension in Sierra Leone is primarily delivered through the mandatory NASSIT scheme, funded by combined employer and employee contributions of 15% of insurable earnings. Employees may also participate in supplementary occupational or private pension plans, which are typically governed by scheme-specific rules and may offer additional retirement savings beyond the statutory NASSIT benefits.

Managing Common Payroll Challenges in Sierra Leone

Global employers operating in Sierra Leone often encounter unique payroll challenges that can affect compliance and efficiency, like navigating evolving tax laws and managing employee data. With a need for real-time accuracy, modern organizations must develop strategies to overcome these challenges effectively. Below, we explore some of the most common payroll hurdles and provide actionable solutions to streamline payroll processes in Sierra Leone.

Maintaining Accurate And Detailed Payroll Reports

Maintaining accurate global payroll reports is often challenging due to currency exchange complexities, data integration issues, and the need to keep employee information up-to-date –including tax information, hours worked, leave balances, and any changes in salary or job status. Generating accurate reports is easy with a comprehensive payroll automation tool that consolidates fragmented data sources, and can keep track of employee payments and deductions.

Keeping up with ever-changing tax laws & Compliance Laws

In Sierra Leone, tax laws and compliance regulations can change frequently, presenting a significant challenge for global employers. Monitoring updates to federal, state, and local tax codes is crucial to avoid non-compliance and costly penalties, but requires significant time and resources. Partnering with local experts or a reputable global HR platform is an effective way to maintain compliance. These services can help employers stay compliant with evolving regulations while freeing up time for more strategic work.

Consolidating Multi-Vendor Payroll Analytics

Managing payroll across multiple vendors often leads to fragmented data and inefficiencies, making it difficult to consolidate analytics. These challenges can hinder decision-making, especially when trying to gain a clear view of workforce costs and trends. To address this, organizations can invest in a centralized payroll management system that unifies data from multiple vendors. A consolidated platform simplifies payroll tracking, ensures data accuracy, and provides actionable insights into payroll expenditures.

Integrating Multiple HR & Payroll Systems

Global companies are prone to using multiple HR or payroll systems across regions, which can easily lead to fragmented payroll data, increasing the risk of delays and errors in employee compensation. To combat this, seamless integration between payroll and other systems is critical.

Payroll management systems that connect with existing HR and financial platforms can help streamline workflows by reducing manual inputs and ensuring that all departments operate with up-to-date, accurate information. In turn, this helps guarantee on-time, accurate payroll, boosting employee satisfaction.

How Playroll Can Streamline Payroll & Taxes In Sierra Leone

Expanding globally is an exciting milestone for any company, but it comes coupled with complex payroll challenges. It doesn’t have to be complicated. At Playroll, our easy-to-implement global payroll management software combines automation with hands-on support to make global payroll truly simple. Here's how Playroll helps:

Multi-Vendor Integration: Our platform syncs seamlessly with your providers and in-house systems to unify global payroll services in one platform.
Standardize Payroll Processes: Unify your operations in one dashboard to ensure payroll is running smoothly globally, with advanced approval flows and reports.
Improve Governance & Compliance: Improve compliance by centralizing all your compliance tasks and processes. Easily track your payment obligations, with digitized audit trails.
Advanced Reporting: Access and configure your data, your way, with a comprehensive suite of payroll analytics and reporting tools.

Disclaimer

THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). Playroll does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect Playroll’s product delivery in any given jurisdiction. Playroll makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.

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