Payroll in Angola

Payroll Process

Standardizing payroll processes is critical for the efficient management of employee data and the prevention of compliance risks. In Angola, businesses with remote employees must adhere to complex and ever-changing local payroll regulations. For remote teams, managing payroll can be a challenge.

To simplify the process, here's an overview of the three payroll stages:

Pre-payroll phase

Setting up the organization

You need to first set up your organization in Angola. Every global organization has its policies, procedures, and processes for managing employee data. Standardizing these processes helps ensure compliance with local regulations and prevents errors in the payroll process. It involves laying down policies for the following.

Business profile

Any business interested in conducting commercial activities in Angola must obtain a commercial operations permit (Alvará) from the Ministry of Commerce. Business enterprises in Angola are subject to administrative licensing of general trade and provision of commercial services activity at the Ministry of Commerce.

Work location

Businesses operating in multiple locations should have a defined policy for each work location.

Leave policy

All employees are entitled to paid leaves, such as annual leave, sick leave, and maternity/paternity leave. The employer must have a leave policy outlining the conditions under which employees can take leaves.

Attendance policy

Employees are required to adhere to the organization's attendance policy. This policy should be clearly defined and communicated to all employees. It should also define the attendance monitoring method, biometric timekeeping or manual timesheets, and the consequences of violating the policy.

Statutory components

It's crucial to adhere to the General Labor Law of Angola which establishes the conditions under which employment relationships are formalized. The law covers working hours, overtime pay, leave, and termination of employment.

Salary components

Policies must be devised for the payment of salaries and other benefits, such as bonuses, allowances, and commissions. All salary components must be compliant with local regulations. It's important to choose the appropriate deductions, allowances, and benefits to offer employees.

Pay schedule

Payroll cycles in Angola are usually monthly, with employers paying wages by the last working day of the month. The frequency of payroll can be monthly, fortnightly, or weekly. Angolan law also mandates employers to pay a 13th and 14th salary with 50% being paid as the 13th salary for vacation bonus (mandatory payment before an employee takes vacation) and the rest as the 14th salary payment for a Christmas bonus.

Employee information

The payroll process also involves accumulating necessary employee information, such as name, address, contact details, bank account number, designation, date of joining, and salary details. This information must be accurate and up to date to ensure that employees are paid correctly.

Payroll calculation phase

Here, employees' salaries are calculated based on the information collected in the pre-payroll phase. This largely depends on the system used by the organization. Organizations using a systematic approach may feed employee information into payroll software to generate salary slips. The calculation will generate the net salary, the amount to be paid to the employee after all the statutory deductions.

Post-payroll phase

Salary payments

One of the most critical aspects of the payroll process is ensuring that employees are paid their salaries on time and in full. You can deliver payroll in Angola internally, outsource it to a third party locally, or remotely (via a foreign company). Foreign companies setting up in the country must incorporate and join the Angolan company registry, if they want to administer payroll internally.

Payroll accounting

Salaries are considered a business expense and must be accounted for in the organization's financial statements. All payroll-related transactions must be properly documented and recorded. Under article 22 of the PIT Code, employers must keep payroll reports for a minimum of five years, the records can be kept electronically as long as the records can be printed out on request.

Payroll reporting and compliance

Angola's taxation system uses a progressive income tax scale that ranges from 0 to 25% of an employee’s monthly earnings. Employees have to contribute to social security at a rate of 3%. There is no payroll tax in Angola, and employers have to pay the corporate income tax of 30%.

Utilizing Skuad's payroll services in Angola would help you stay compliant with the ever-changing local payroll regulations. Our team of experts will work with you to ensure that your payroll is processed accurately and on time. So, you can focus on running your business.

Payroll Processing in Angola

The General Labor Law of Angola dictates that employers must pay their employees on time and in full. All salaries and wage payments must comply with the local minimum wage, which is currently set at 1,500 Angolan kwanzas per month (US $9.50). Payroll processing also involves making the necessary deductions, such as income tax, social security contributions, and other mandatory deductions. For employers with foreign employees working in Angola, additional compliance requirements include obtaining the necessary work permits and visas.

Payroll Processing Company in Angola

Outsourcing payroll to Skuad offers many benefits, including compliance with local regulations, cost savings, and efficiency. Skuad's payroll services are designed to meet the specific needs of your business. When you outsource your payroll to Skuad, you can rest assured that your employees will be paid on time and in accordance with local regulations. We will handle all of the compliance requirements, including filing reports and paying taxes.

Payroll Management in Angola

Maintaining accurate and up-to-date payroll records is crucial for any organization. In Angola, employers are required to keep payroll reports for a minimum of five years. Skuad's payroll services in Angola can help you manage your payroll effectively and efficiently. It involves several tasks, such as maintaining employee records, calculating salaries, and preparing payroll reports.

Payroll Compliance in Angola

It's the employer's responsibility to ensure that all payroll-related transactions are properly documented and recorded. All salaries and wage payments must comply with the local minimum wage and other relevant laws and regulations.

Skuad's payroll services in Angola can help you stay compliant with the ever-changing local payroll regulations. We offer a comprehensive solution that includes everything from compliance and reporting to salary payments.

Payroll Components in Angola

Compensation: The minimum wage varies depending on the employee's sector in Angola.

• Agriculture: 21,454.00 AOA
• Transport, services, and manufacturing: 26,817.00 AOA
• Extractive industry and trade: 32,181.00 AOA

Working hours: According to the General Labor Law, the standard maximum working day is 8 hours or 44 hours per week. Employers can increase working hours to 9 hours per day, if the work is intermittent or requires the employee’s presence, and the employer limits the working week to 5 consecutive days.

Overtime laws: The maximum number of overtime hours an employee can work is 2 hours per day, 40 hours per month, and 200 hours per year. Extra hours worked during the mandated rest day are paid at 1.1 times the employee’s regular hourly wage. Hours worked during the complimentary rest period are considered overtime.

Social security: Employers make social security contributions of 8%, while employees contribute 3% of their salaries.

Sick leave: Employees on sick leave in large or medium companies receive full payment of their basic salaries for the first two months of absence. From the third month to the 12th month of absence, the employer has to pay 50% of the basic salary until the relevant social protection entity takes over. For smaller companies, employers shall pay 50% of the regular wage for 90 days.

Parental leave: After maternity leaves and with agreement from the employer, a female employee can take an additional four weeks of supplementary unpaid leave to take care of the child. Employees are also entitled to three days leave per month (up to a maximum of 12 working days a year) to attend to members of the employee’s household.

Public holidays:

• 1 Jan - New Year
• 4 Feb - Liberation Movement Day
• 1 Mar - Carnival
• 8 Mar - International Women's Day
• 23 Mar - Southern Africa Liberation Day
• 2 Apr - Good Friday
• 4 Apr - Angolan Peace Day
• 1 May - Labour Day
• 17 Sep - National Heroes Day
• 2 Nov - All Souls' Day
• 11 Nov - Independence Day
• 25 Dec - Christmas Day

Payroll taxes: Angola doesn't have payroll taxes.

Other laws: Laws in Angola divide companies or employers according to their size. Every organization is governed by a specific set of policies. The Labor Law also divides employees into two categories: national and foreign residents and expatriates.

Conclusion

Payroll processing is a crucial but time-consuming process for any organization. Angola's payroll laws and regulations are specific and require employers to maintain accurate records. You can choose to manage payroll internally, or outsource the process to a reputable payroll service provider like Skuad.

Skuad's payroll services in Angola can help you manage your payroll effectively and efficiently, ensuring compliance with all relevant laws and regulations. Get in touch with us today to learn more about how we can help you.