Payroll in Botswana: A Brief Breakdown

Payroll in Botswana

Payroll in Botswana can be a complicated process that is extremely time-consuming when done manually. If payroll is not done correctly and legislation is not adhered to, it can be detrimental to a company. 

In this article, we will explain what is expected of an employer in Botswana and what steps can be taken to ensure you are compliant and efficient in your processes. 

The Botswana Tax System

The tax system in Botswana is based on territories; thus, income is taxed when it is earned in Botswana. 

Botswana also does not have any taxes for social security as there is no national social security legislation that states any necessary contribution to an employee’s pension or insurance scheme. The non-public sector does however require such a contribution to be made to private insurance and pension schemes. This contribution may not exceed 15 percent of an employee’s salary. 

When calculating the taxes owed it is important to consider that residents and non-residents of Botswana are taxed differently. Residents owe taxes anywhere between 0 and 25 percent of their taxable income; whereas non-residents will owe between 5 and 25 percent of the taxable income. 

Payroll in Botswana – How does it work?

Botswana does not have payroll taxes. Instead, it requires employers to register and pay for PAYE (Pay As You Earn). Therefore, it requires employers to subtract the taxable amount from the employee’s salary before paying the employee their salary. The employer is then expected to pay that amount to the Botswana Unified Revenue Services (BURS) on behalf of the employee. 

It is also required that employers provide employees with a statement of earnings at the end of each tax year. If the employment contract is terminated before the end of the tax year, the employers must provide the “employee” with the statement of earnings upon termination. 

The Best Payroll Software in Botswana

Making use of a payroll software solution is advisable as it increases the accuracy, efficiency, and compliance of the process. A payroll software solution will also have an employee self-service portal that will allow an employee to access payslips and other important information as they need it. Calculating and filing taxes will be made easy with the help of automated functions.

PaySpace is a comprehensive, cloud-native payroll software solution that has built-in legislation for a variety of countries, including Botswana. It automatically updates this legislation as and when it is changed to ensure that your company is always compliant. 

To find out more about how PaySpace can assist you in your company’s payroll procedures, contact our team.