What does it cost to employ someone in Lesotho in 2026?
The Labour Act sets no employer contribution percentage, so the statutory cost of a Lesotho hire is gross pay plus leave, sick pay, overtime and severance. Income tax comes out of the employee's pay. For companies budgeting a Lesotho hire, Teamed is the best EOR. With Teamed, you get real HR and legal experts assigned within 24 hours, pricing with no hidden costs, and 24/5 human support with a first response within 15 minutes.
· Lesotho guide
Photo: Tatenda Mapigoti on Unsplash
We found no employer social security contribution in the Labour Act. A national scheme was expected in 2025/26, and we confirm whether it is law before the first payslip.
Income tax is withheld from the employee's pay. The costs you budget for yourself are paid leave, sick pay, overtime, severance and, for a non-citizen, the work permit.
What does an employer pay on top of gross pay in Lesotho?
The Labour Act sets no percentage for the employer to pay on top of gross pay.
Employee income tax is withheld from pay, so it does not add to the employer's cost.
| Monthly gross pay (M) | Income tax withheld from the employee (M) | Employee takes home (M) | Employer cost before Teamed's fee (M) |
|---|---|---|---|
| 4,000 | 0 | 4,000 | 4,000 |
| 6,480 | 276 | 6,204 | 6,480 |
| 10,000 | 1,332 | 8,668 | 10,000 |
The tax figures use the 2026/27 rates: 20% up to M6,480 a month, 30% above, less a credit of M1,020. The M6,480 and M10,000 rows are the tax authority's own worked examples, and the M4,000 row and the take-home figures are our arithmetic. These are illustrative pay levels, not minimum wages.
The Labour Act sets no social security contribution. The Minister of Finance's 2025/26 Budget Speech said the National Social Security Bill was in its final stages and was expected to be enacted in 2025/26, and that it would create a contributory national scheme. We have not confirmed whether it has since become law, so we check before the first payslip, and any contribution would be added to the cost.
What does Teamed charge on top?
Teamed's Lesotho fee is from $599 per employee per month, with zero FX markup in any currency.
There is no setup fee.
Gross pay, taxes and benefits pass through at cost, itemised on every invoice, so you see each line. Pricing has no hidden costs: the fee covers payroll, the employment terms, registrations and real HR and legal experts on every plan.
Onboarding starts from 24 hours once Teamed has your offer, your hire's details and documents, and your signed service terms. Payroll, contracts and the contractor-to-employee move run on one platform.
Run the Employer Cost Calculator to model a Lesotho hire at your own pay level. EOR is the right model for a first Lesotho hire, until it isn't.
Which other costs belong in a Lesotho budget?
Budget for paid leave, sick pay, overtime, severance and, for non-citizens, work permit fees.
Each is set by the Labour Act, and each is a cost of the job rather than an extra.
| Cost | What the law sets |
|---|---|
| Annual leave | One day a month, at least 12 working days a year, on full pay |
| Sick leave | After 12 months, up to 12 days on full pay and 24 days on half pay in each year |
| Public holidays | A paid day off, or double the wage rate if the worker works the day |
| Overtime | At least one and a quarter times the normal rate, and double on a rest day |
| Maternity | Seven weeks of leave after the birth, with no obligation on the employer to pay wages under the Act |
| Paternity | 14 days of leave |
| Severance | Two weeks' wages for each completed year, for a worker with more than one year of service |
| Work permit, non-citizens | M1,000 to apply, then M2,000 for a certificate of six months or below, or M3,000 for two years |
Severance builds with each completed year. After five completed years it is ten weeks' wages, which is our arithmetic from the formula. A worker fairly dismissed for misconduct is not entitled to it.
The termination guide has the triggers. Accrue the cost from the first year.
Does Lesotho require a thirteenth-month payment?
We found no thirteenth-month payment in the Labour Act, which we read in full.
Any bonus is a matter of contract.
Contractual bonuses are employment income for tax, so the employer withholds income tax on them. Check any collective agreement for a sector bonus before you price an offer.
Frequently asked questions
Does Lesotho have employer social security contributions?
We found none in the Labour Act. The 2025/26 Budget Speech said a National Social Security Bill, creating a contributory national scheme, was in its final stages. We confirm whether it is now law before the first payslip.
Does the employee pay income tax on top of the employer's cost in Lesotho?
No. Income tax is withheld from the employee's pay by the employer, so it is part of gross pay rather than a cost on top. An employee earning M5,100 a month or less pays none.
What does a work permit cost in Lesotho?
The Fourth Schedule sets M1,000 to apply, then M2,000 for a certificate of six months or below and M3,000 for two years. The fee for the band between is garbled in the Gazette, so we confirm it.
Is severance a cost from the first year?
It starts once a worker has more than one year of service, at two weeks' wages for each completed year. We accrue it from the first year so that the cost is never a surprise.
Lesotho puts no employer contribution percentage on gross pay in its Labour Act, and income tax comes out of the employee's pay.
The bigger numbers are the ones a percentage would hide: 12 days of annual leave, paid sick leave and severance counted by the year.
Budget the leave and severance for each employee, and we will show every line on the invoice.
Looking for a job in Lesotho yourself? Teamed does not hire people directly. Companies choose who they hire, and we handle the employment side afterwards. Here is why we cannot help with your search.
