Build a global team in minutes
Get expert helpPalau’s on your global hiring radar, and you’re not alone. It’s a place with local talent, strategic ties to the U.S., and serious potential for global teams looking to expand in the Pacific. But as soon as you try to hire someone there, there’s a lot to wrap your head around. Work permits. Social security. Tax filings. It’s not impossible, but you do need a roadmap.
That’s exactly what this guide gives you. We’ll step through how to hire and pay employees in Palau. Whether you’re new to the region or ready to scale, you’ll get the clarity you need to build a team that’s both compliant and ready to contribute.
Step-by-step hiring in the Republic of Palau
Palau is small, but the hiring process is layered. Between national government oversight and tight-knit community dynamics, successful hiring here means knowing the rules and the local nuances.
Understand the labor market
Palau’s labor force is regulated by the Palau National Government, which oversees employment law, work permits, and payroll. Local hires bring cultural fluency and institutional knowledge. Foreign workers often fill specialized roles in industries like tourism, construction, or healthcare.
Community and culture matter. Skills are important, but so is understanding how relationships and respect shape decision-making. If you’re building a team here, knowing how things work socially is just as critical as knowing how they work on paper.
Define the role before you hire
Before you recruit, get specific:
- Who do you want to hire—local, foreign, or remote?
- Is this full-time, part-time, or contract?
- How does the role fit within Palau’s wage expectations?
Clarity up front will save you time (and red tape) later.
Post the job and find your candidate
You can list roles locally through the Island Times or government job platforms. If you’re hiring a foreign national, you’ll need to prove that the role couldn’t be filled locally before proceeding with a permit request.
Screen, select, and verify
For any hire, gather ID, education records, and certifications. For foreign hires, start the work permit prep early because eligibility checks are strict, and delays are common.
Handle the paperwork
Here’s what you’ll usually need:
- Signed offer letter and employment contract
- Passport and health certificate (for foreign nationals)
- Local police clearance (depending on the role)
Register your employee
New hires must be registered with the Social Security Office and the Ministry of Finance. Registrations with these offices set them up for income tax deductions and social contributions.
Avoid the usual pitfalls
- Don’t skip documents—Palauan agencies are thorough.
- Only assign roles to foreign workers that the government has pre-cleared.
- For foreign hires, offer cultural support. Adjustment takes time.
Securing work permits and employment eligibility
Hiring in Palau can look different, depending on your candidate’s background.
Palauan citizens don’t need a work permit, but employers still need to register them properly.
Legal residents and immigrants might need renewals, depending on visa terms. It’s smart to confirm this with the Division of Immigration.
Foreign nationals need a full application, including a labor market test, medical and police clearance, and sometimes a repatriation bond. The process can take 4-6 weeks, so plan accordingly. For a closer look at what’s involved, read this guide on work visa authorization in Palau.
Crafting employment contracts that meet local standards
Palau requires all employment agreements to be written and aligned with its National Code. English is standard. More importantly, your contract needs to reflect local expectations, not just legal boilerplate.
Include the essentials
- Job title and responsibilities
- Duration (fixed-term or open-ended)
- Work schedule and rest days
- Pay rate and payment frequency
- Paid leave (minimum of one day per month after probation)
Many employers also include:
- A clause for resolving disputes locally
- Clear repatriation terms for foreign hires
These extra touches can prevent problems down the line.
Payroll, wages, and payments in Palau
Wage expectations in Palau are changing. As of 2025, the minimum wage is $4.50 per hour. Skilled workers often earn more, depending on industry and experience.
When and how to pay
You can pay employees bi-weekly or monthly—just make sure it’s clearly defined in the contract.
Most employers use local banks like the Bank of Guam or the Bank of Hawaii. Direct deposit is the norm. Final paychecks must be issued within five days of termination.
What taxes and contributions do you owe?
- Income tax. 12% 6% for up to $8,000, 10% for $8,000 to $40,000, and 12% for $40,001 and higher
- Social Security. 7% from the employee, 7% matched by the employer
- Health insurance. Optional, but highly recommended for competitive roles
You’ll report and submit filings quarterly. Keep a digital trail—audits are rare but do happen.
Hiring from abroad? Consider an EOR
An Employer of Record (EOR) can handle payroll, taxes, and compliance in Palau on your behalf—especially helpful if you don’t have a local legal entity. If you’re new to the concept, check out this guide on what an employer of record does.
Compliance and risk management for employers
Palau’s labor regulations are clear, but they don’t leave room for shortcuts. Here’s what to keep track of:
- Keep written contracts and pay records
- File quarterly tax and Social Security reports
- Renew permits on time for foreign workers
Want to stay ahead? Create a simple compliance calendar. Set reminders for renewals, filings, and annual reports. Consistency here keeps you off the government’s radar.
Navigating onboarding and employee integration
Smooth onboarding builds long-term retention. Especially in a tight labor market like Palau, your first impression counts.
- Start with a structured orientation—cover both the job and cultural context
- Pair foreign hires with local mentors to ease transitions
- Provide language support when needed
Little things go a long way. Show new hires they’re valued, and they’ll stick around.
Tips and resources for a successful application
Be proactive. Government hours are limited, and things move on island time. Prepare documents in advance and check requirements twice.
A simple checklist can save you major delays:
- Do you have every required clearance?
- Is your contract up to standard?
- Have you budgeted 4-6 weeks for processing?
If you’re unsure, reach out to a local legal consultant or lean on a trusted EOR partner.
Partnering with EOR providers
An employer of record acts as the legal employer for your team in Palau. They handle contracts, payroll, taxes, and compliance, so you don’t have to set up a local entity.
Using an EOR means:
- Hiring faster with less overhead
- Staying compliant without reading every labor code
- Offloading back-office responsibilities while you grow your team
This is the kind of support that Pebl offers. And yes, we do it in Palau.
Hiring in Palau is different—but with the right process, it’s doable
You’re not just checking boxes—you’re building trust. Palau’s labor system rewards employers who play by the rules and respect the local way of working.
This guide gives you the basics. Combine it with thoughtful planning, cultural awareness, and support from the right partners, and you’ll be well on your way.
How Pebl can help
Pebl makes global hiring manageable. Our services help you legally hire, pay, and support employees in Palau—without opening a local entity.
We handle the contracts, contributions, payroll setup, and compliance deadlines. You focus on building the team. Whether you’re making your first hire in Palau or managing a distributed global workforce, we’ve got the infrastructure to help you scale.
Ready to get started? 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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