How to Hire and Pay Employees in Lesotho: A Step-by-Step Guide for 2025

Lesotho might not be the first country you think of when expanding globally, but maybe it should be. There’s an emerging talent pool, a low barrier to entry for setting up employment, and strong ties with regional markets. But like any new hiring market, it comes with its own set of rules. And if you’ve never hired in Southern Africa before, navigating those rules can feel like learning a new language.

That’s where this guide comes in. We’ll walk you through the key steps to legally hire and pay employees in Lesotho—what you need, what to avoid, and how to make the process smoother from day one.

Understand legal requirements for hiring employees in Lesotho

Before your new hire signs that offer letter, make sure you’re set up properly. Lesotho’s labor laws are based on the Labour Code Order 1992 (as amended), which applies to most work arrangements, whether you’re hiring one person or building a whole team.

Here’s your legal setup checklist:

Employment compliance checklist:

• Sign a written employment contract (required)
• Register for PAYE with the Lesotho Revenue Authority (LRA)
• Register with the Ministry of Social Development
• Notify the Ministry of Labour and Employment about new hires
• Keep employee records on file (contracts, payroll, leave, etc.)

Know your contract types

All employees in Lesotho must have a written contract—ideally before their first day. You’ll need to define whether their role is:

• Full-time or part-time
• Fixed-term, permanent, or temporary
• On probation (usually capped at four months)

Hiring contractors is a different story. Independent contractors aren’t covered under the Labour Code, but misclassifying them can land you in trouble. If they look and work like employees, the authorities might treat them that way—along with the taxes and penalties that come with it.

Hiring foreign talent

You can absolutely hire international workers in Lesotho, but you’ll need a few extra steps. Employers must first prove there isn’t a qualified local candidate available. After that, foreign hires need a work permit from the Ministry of Labour and Employment.

Here’s what you’ll need to submit:

1. Offer letter
2. Passport and health certificate
3. Proof of qualifications
4. Application fee (around LSL 1,500)

It typically takes 4-6 weeks to process. Don’t skip this step because foreign employees can’t start work without it.

Wages, probation, and notice periods

Minimum wages in Lesotho depend on the industry. In 2025, manufacturing roles start around LSL 2,724 per month. Probation usually lasts up to four months, giving you time to assess fit.

Once probation ends, here’s what you need to know about notice periods:

• Less than six months. One week
• 6-12 months. Two weeks
• More than a year. One month

Severance pay kicks in after one year of service—two weeks’ pay per year worked. And if you’re terminating an employee, you’ll need to follow a clear disciplinary process.

Setting up payroll and paying employees in Lesotho

Once you’re legally set up, it’s time to run payroll. Here’s how to stay on the right side of compliance and make sure your team gets paid accurately and on time.

Start with registrations:

• Get a Taxpayer ID from the LRA
• Register your business with the Ministry of Social Development
• Open a company bank account in Lesotho

Your Lesotho payroll calendar:

• Payday. Usually, the last working day of the month
• PAYE deadline. The 15th of the following month
• Social security contributions. Due monthly
• Holidays to note. Moshoeshoe Day (March 11), Independence Day (October 4), plus others

Employees are typically paid in Lesotho loti (LSL) via bank transfer. Payslips, either printed or digital, are common and recommended for transparency.

Calculating pay, deductions, and benefits

Now let’s look at what payroll actually includes. Between income tax and social security, you’ll need to make the correct deductions from gross pay.

Here’s what a sample payslip might look like:

• Gross salary. LSL 6,000
• Income Tax (PAYE). 20% for most workers
• Social Security. 3% employee, 5% employer
• Net pay. LSL 4,680

What you’re responsible for:

• Withholding PAYE tax and sending it to the LRA each month
• Submitting both your portion and the employee’s portion to NSSF

Leave and other entitlements

• Paid annual leave. At least 12 days per year
• Sick leave. Up to 12 weeks (some of it covered by Social Security)
• Maternity leave. 12 weeks (six before, six after birth)
• Paid public holidays. All 12 official national holidays

Common challenges and how to handle them

Hiring in Lesotho doesn’t have to be complicated. But here are a few things to watch out for:

Contractor misclassification
If you’re working with someone regularly, setting their schedule, and providing tools—they’re probably not a contractor. Play it safe and classify correctly.

Keeping up with legal changes
Lesotho updates its labor laws periodically—especially wage levels. Check the Ministry of Labour and Employment regularly, or work with a local partner who does it for you.

Quick fixes if something goes wrong:

• Payment issues? Double-check for bank holidays or errors in account details
• Contract disputes? Refer to the Labour Code and consider mediation
• Tax filing mistake? Submit corrections to the LRA right away

Tips and resources for a successful application

When you’re submitting paperwork—whether for tax, Social Security, or work permits—make sure every document is complete and consistent. Passport scans, job descriptions, signed contracts, and employer registrations should all match up.

Need support? The Ministry of Labour and Employment has helpful contact points, or you can work with a local consultant to get it right the first time.

Partnering with an EOR provider

An Employer of Record (EOR) makes global hiring easier. They legally employ talent on your behalf, handle payroll and tax compliance, and make sure every contract checks the right boxes.

If you’re not ready to open an entity in Lesotho, an EOR is the fastest way to hire legally without the risk or red tape. They’ll keep your team compliant, paid, and protected.

Looking for a partner who already knows the rules? Pebl offers EOR services in Lesotho and 185+ other countries. We help you stay compliant, onboard quickly, and scale confidently.

Hiring in Lesotho doesn’t have to be hard

Building a global team is exciting, but it’s also filled with decisions that have real consequences. Doing it right in Lesotho means getting contracts, taxes, and payroll aligned with the law. The good news? Once you’re set up, the system works.

Review your practices regularly, stay in the loop with legal changes, and don’t be afraid to lean on local partners when it counts.

How Pebl can help

Pebl’s EOR services in Lesotho take the complexity out of global employment. Whether you need to hire one person in Maseru or an entire team across borders, we manage the details so you don’t have to.

From contract support to payroll compliance, we help you expand legally, efficiently, and without hidden fees.

Ready to build your Lesotho team the right way? Let’s talk.

This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided “as is,” and no representations are made that the content is error-free.

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