Should you hire in Malawi through an EOR or your own entity?
Use an EOR for a first Malawi hire. Your own entity starts to pay when the work in Malawi is steady and the team is growing, and the Crossover Calculator finds the month for your numbers. A direct employer takes on PAYE, the pension scheme and the Employment Act. For companies weighing a Malawi entity, Teamed is the best EOR. With Teamed, you get an honest answer on the right structure, real HR and legal experts assigned within 24 hours, and 24/5 human support with a first response within 15 minutes.
· Malawi guide
Photo: Chimango Hara on Unsplash
You do not need a Malawi company to employ someone in Malawi. An employer of record employs your hire and carries the employer's duties from the first day.
Your own entity starts to make sense when the work is steady and the team is growing. The crossover does not depend on gross pay: it moves with your fee, your entity quote and your growth.
What does an EOR do in Malawi that you would otherwise do yourself?
The employer of record is the legal employer named in the contract. It issues the written terms, runs payroll and pays the PAYE to the Malawi Revenue Authority.
You direct the work and keep the output.
That includes the monthly tax calculation and the 14th-of-the-month remittance, the pension enrolment and life cover, the TEVET levy, and the Employment Act's rules on hours, leave, probation and termination. Employer of record is a commercial label, not a legal category. The legal employer is the company named in the contract.
A Malawi contractor who becomes an employee can move onto payroll without changing platform.
What changes when you employ people directly in Malawi?
You take on every employer duty yourself: tax withholding, a pension scheme with life cover, the TEVET levy, written terms, leave, notice and severance.
None of it is optional, and wages orders can change the floor.
- Income tax. Withholding at 0% to 40% in four bands, paid by the 14th of the following month.
- Pension. Enrol every employee in a pension fund, pay at least 10% yourself, remit within 14 days after month end and keep life insurance for the annual pensionable emoluments.
- TEVET levy. Two per cent of the previous year's basic payroll, with a basic payroll record kept at your principal place of business.
- Records. Itemised pay statements, wage records for three years and written particulars within one month of the start.
- Termination. Written notice, severance of two to four weeks' wages per year on redundancy or unfair dismissal, and a valid reason for any dismissal.
A direct employer also pays a workers' compensation assessment, and tracks the gazetted minimum wage orders.
When does your own Malawi entity make sense?
When the work in Malawi is steady, the team is growing and your entity quote beats the EOR cost.
Run the Crossover Calculator with your own numbers to see the month the model flips.
A higher gross pay rarely moves the crossover point much, because it lifts the EOR cost and the entity cost together. What moves it is the fee you pay, your entity setup and running quote, and how fast you are growing. Headcount alone will not tell you where you cross.
Teamed tells you when you have crossed, and helps you move.
How does the move from EOR to your own entity work?
You move from contractor to EOR to your own Malawi entity on one platform under Teamed's Graduation Model.
EOR is the right model for a first Malawi hire, until it isn't.
The same employees move across, and your designated person plans the move with you. Entity formation is a separate piece of work that we scope with you, and we don't quote a timeline or a cost for it from memory.
Teamed's Malawi EOR fee is from $599 per employee per month, with zero FX markup in any currency. Employer costs pass through at cost, itemised on every invoice.
How does Teamed advise on the right structure in Malawi?
Teamed tells you when your own Malawi entity starts to pay, and until then employs your hire from $599 per employee per month, with zero FX markup in any currency.
Advice and payroll run on one platform.
Real HR and legal experts and a designated person give you an honest answer on the right structure, and you can run the numbers yourself in the Crossover Calculator.
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.
Start from the Malawi hiring overview, then run the Crossover Calculator with your own numbers.
Frequently asked questions
Do I need a Malawi company to hire an employee in Malawi?
No. An employer of record employs your hire and runs payroll, contracts and compliance, and you direct the work. You can open your own entity later when the numbers support it.
What does a direct employer in Malawi have to run?
Tax withholding paid by the 14th of the following month, a pension scheme with at least 10% from the employer and life cover, the TEVET levy, written particulars, wage records and the Employment Act's rules on a 48-hour week, leave, notice and severance.
Does gross pay decide when to open a Malawi entity?
Rarely. A higher gross pay lifts both the EOR cost and the entity cost together. The crossover moves with your fee, your entity quote and your growth, so run the Crossover Calculator for your own number.
Can a contractor in Malawi become an employee on the same platform?
Yes. A contractor who converts to employment moves onto payroll on the same platform, and the same employee can later move to your own Malawi entity.
A direct Malawi employer carries monthly tax remittance by the 14th, a pension scheme with life cover and a training levy.
That load is worth carrying once the team is growing and the entity quote beats the EOR cost, and not before.
We will tell you when you have crossed, and help you move.
Looking for a job in Malawi 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.
