Understanding the Payroll in Angola

The aspects like economic and political stability, booming labor force, attractive investment terms, strong government support, and availability of renewable energy prospects attract foreign companies to invest in Angola. The country is ranked 61st globally in terms of GDP.

Companies aiming to extend their business in Angola should be familiar with the local rules and regulations enforced by the Angola government. It assists them in administering payroll in Angola and enticing a skilled workforce. In addition, for flawless corporation operations, they should thoroughly understand salary systems, income tax, corporate tax laws, social security contributions, and entitlement and termination terms.

To attract, recruit, and retain skilled employees in Angola, you must be well-versed in efficiently managing the onboarding process, including the Angola payroll process. Besides, you need a profound understanding of payroll tax in Angola and labor requirements to create compliant payroll. The below guide explains all aspects you need to know about payroll in Angola.

How Is Payroll Calculated in Angola?

Payroll refers to the compensation an employer should pay to its employees for their employment over a definite period. Angola’s payroll policies and procedures focus on factors like payment disbursement and tracking the employees’ working hours. Regularly administering record-keeping is essential to achieve an accurate payroll. You must also withdraw social security contributions and other relevant deductions by following the payroll rules and regulations in Angola.

The formula to calculate payroll:

Net Salary = Gross Salary – Gross Deductions

here,

Gross Salary = Basic Salary + Bonus + HRA + Arrears + All types of Allowances + Reimbursements

and

Gross Deductions = Income Tax + Public Provident Fund + Insurance + Professional Tax + Leave adjustments + Loan reimbursements (if any) 

Important Elements of Salary Structure in Angola

The following section outlines the elements that constitute the salary structure in Angola:

Cost to Company (CTC)

The CTC represents an annual amount payable by a company when it hires an employee. It involves factors like the employee’s net remuneration, gross remuneration, supplementary benefits, and payroll deductions in Angola.

Gross salary

It represents the annual amount a company spends on recruiting an employee. It incorporates aspects like employees’ gross and net remuneration, payroll deductions in Angola, additional benefits, etc.

Net salary

After calculating all suitable deductions from the gross salary, it states the amount sent to an employee’s bank account.

Basic salary

It denotes the amount employees get after calculating all deductions and additions from the annual salary package. The corresponding amount depends on the employee’s job designation and the employer’s business activities.

Allowances

The payroll in Angola entitles all employees in the country with various allowances like family allowance, meal allowance, transportation allowance, house rent allowance, vacation allowance, etc., irrespective of the employer and the industry. It represents all the occupational expenses that employers should pay to their employees.

How to Set Up a Payroll in Angola

The below Angola payroll process flow chart helps businesses willing to set up payroll in Angola:

Step 1

Register your business in Angola with the Angolan Private Investment Agency (ANIP).  This step also validates the legitimacy of your company’s name.

Step 2

Register the company name, national tax number, and labor and tax registration.

Step 3

Obtain a state or local business ID (if required).

Step 4

Mention all employee details, including their full name, date of birth, employment beginning or termination date, mailing address, work location, job role, and tax filing number. It must also incorporate their bank details, wage or hourly rate details, compensation details, work certificates from previous employers, personal income tax forms, Angolan Taxpayer Card, and ID card (for Angolan nationals only). These data assist you in precisely calculating all employee pay amounts in compliance with payroll policies and procedures in Angola.

Step 5

Classify your employees among part-time, full-time, and independent contractors.

Step 6

Calculate the applicable income tax from employees’ salaries and file.

Step 7

Get a Tax Identification Number (TIN) from the  General Tax Administration (AGT). Keep documents like a Certificate to commence business, a Certificate of Incorporation, and a Company’s Regulation ready for registration with the tax authority.

Step 8

Register at National Social Security Institute (“Instituto Nacional de Segurança Social – INSS”) for security contributions. The required documents are the list of employees, their salaries, the company certificate of incorporation, and the certificate to commence business.

Step 9

Register for VAT. Fill out the VAT registration form, and attach copies of Business Registration documents.

Step 10

Open an Angolan bank account with any registered local bank to disburse payroll-related payments.  The documents required are:

• A certificate of the company’s name reservation
• Filling forms
• A copy of the IDs of the shareholders and the members of the Board of Directors

Step 11

Calculate each employee’s payroll amounts and confirm your company’s payroll cycle and method. You can choose one among the different payroll methods like payroll software, traditional bookkeeping, appointing an accountant, or outsourcing to a responsible payroll provider.

Step 12

Pay each employee via a local entity (which allows you to hire and pay employees compliantly) or utilize service from an Employer of Record (EOR) platform in Angola. The supported payment methods are direct bank transfers, cheques, credit transfer orders, direct debits, and card-based payments.

Note: All documents for the registration process should be translated into Portuguese, legalized by a Notary Public, and authorized by the Angolan embassy in the company’s country of incorporation.

A Step-by-step Process of Payroll Processing in Angola

The processing of payroll in Angola involves three stages. Here are their details.

1. Pre-payroll stage

This phase works on maintaining compliance with Angola’s legal requirements and defining mandatory business requirements. The below section discusses its statutory components.

Business profile

Firstly, register your business as a legal entity in Angola. Angola Private Investment Agency (ANIP) manages the business registration process and will issue a unique business number. Make sure to use this number on all formal payroll-related communications, including auditing for payroll tax in Angola.

Work location

Work location policy should be customized to the location, with each stating a set of payroll policies conforming to each jurisdiction.

Attendance policy

The attendance policy should follow compliance and regulatory requirements as per payroll policies and procedures in Angola. To prepare a transparent, accurate, and flexible attendance policy, you should evaluate the factors like overtime compensation, half-days, and more policy. The policy also helps you to calculate standard and special attendance and permissions. So, it simplifies payroll calculation.

Leave Policy

The leave policy improves employees’ performance and may expedite promotion. It helps calculate payroll and complies with various leaves (like paternal, maternal, sick, childcare leave, etc.).

Statutory components

Adhering to Angola’s statutory labor laws and regulations assists you in meeting legal requirements and uplifts your brand reputation. It states the existing and new statutory compensation laws and regulations benefitting employees with salary and leaves entitlements.

Salary components

It covers factors influencing salary calculation, i.e., deductions, allowances, leave types, and supplementary benefits. Specifying the mandatory salary components helps you to meet each employee’s requirements.

Payment schedule

Outlining a fixed payment schedule solves payment delays. Making several components of the payment schedule (like increments and bonuses) more flexible helps attract and maintain a practiced workforce.

Employee details

It is crucial to collect the personal and professional information of all your employees. These details include employees’ names, nationalities, job designations, departments, etc. Afterward, you must add these details into the payroll software. In cases of payroll-related disputes, these details can work as evidence and ascertain timely payments to the employee.

2. Payroll calculation stage

This stage of the payroll compliance checklist in Angola involves uploading the gathered data from the previous stage into the payroll process. You must calculate taxes and deductions and track working hours. Also, you should calculate the net salaries of all job designations and print paychecks to achieve an accurate Angola payroll process.

Make certain to calculate and maintain payroll records either manually or automatically. Hence, regular payment processing helps you to fulfill the payroll policies and procedures in Angola.

3. Post-payroll stage

The components in this stage of the Angola payroll compliance checklist help you to confirm the payroll process.

Statutory compliance

While processing payroll in Angola, the payroll manager should rigorously follow the statutory compliances. They must calculate deductions like social security, income tax, insurance premiums, and more from the employee’s payroll. Employers should send these deductions to the concerned authorities.

Payroll accounting

Payroll accounting helps control a company’s expenditures and track payments and payroll-related expenditures. Hence, you can accomplish compliance and reporting requirements. You can outsource payroll accounting to a reliable external auditing service or use internal payroll accounting.

Payroll reporting and compliance

Ensure all statutory reporting and compliance forms are ready to submit to local regulatory authorities. The payroll process will automatically compute all statutory taxes, deductions, contributions, and compensations before transferring payments to employees. Lastly, you can conclude your payroll process by sending complaint forms and reporting to relevant tax and regulatory authorities.

Payroll Contributions

Per the salary, employees and employers must make social security contributions in Angola by following the Angola payroll requirements.

Employer contribution

The employer should make 8% of the social security contributions.

Employee contribution

Employee payroll contributions

The employee should make 3% of the social security contributions.

Employee income tax

Payroll Cycle

In Angola, the payroll cycle is generally monthly. The employees get their salaries by the last working day of the month.

Angola Payroll Options for Companies

The Angola payroll guide covers different options from which employers can select a suitable one as per their requirements and budget. Employers can choose one of the most suitable options to process payroll in Angola based on their requirements and financial plan. The below section discusses different HR payroll Angola options.

• Internal payroll: Large corporations committed to long-term contracts with Angola can handle local payroll. This option of the Angola payroll guide states that the company must hire an expert workforce to set up payroll reliably.
• Remote payroll: This HR payroll in Angola option focuses on using services from a remote payroll and your payroll. It is a cost-effective option in the Angola payroll guide and streamlines payroll processing.
• Angola payroll processing company: Deeply researching the market is crucial if you intend to use this option of the Angola payroll guide. It implies using a reliable payroll processing company experienced at creating payroll and payroll rules and regulations in Angola.
• Angola payroll outsourcing: The option in the Angola payroll guide represents a straightforward, flexible, and economical approach to managing HR payroll in Angola. It guarantees compliance with the Angola payroll requirements and handles all the Angola payroll process components. Using services from a global PEO service provider like Multiplier can help simplify the processing of payroll in Angola and also fulfills Angola payroll requirements.

Entitlement and Termination Terms

Employers must include the following entitlement and termination terms in the employment contract.

Entitlement terms in Angola

Here are the details of the mandatory benefits entitled to Angola employees.

Paid time off

• The employees in Angola are entitled to up to 30 days of paid annual leave.
• During the first year of employment, the annual leave amasses two days for every month of work. The employees can take at least six days of annual vacation per year.
• After one year of employment, employees are entitled to 22 days of annual leave after finishing one year of employment.
• Female employees with children under the age of 14 years are entitled to one extra day of leave for every child.
• Employees are entitled to full compensation for their annual leave and any other benefits amassed during that year.
• The employees are also eligible for a standard bonus amount equivalent to 50% of their monthly salary. They get this compensation before the start of the annual leave period.

Sick leave

• The employees in Angola are entitled to up to 3 days of paid sick leave.
• In medium or large companies, the employees on sick leave get full payment of their standard salary for the initial two months of sickness.
• The employer should pay 50% of the standard salary to employees from the third to the twelfth month of sickness.
• In small companies, the employers pay 50% of the standard salary to employees for 90 days.
• Presenting a medical certificate entitles employees to stay absent from work and get remuneration due to illness.

Maternity leave

• The female employees who contributed to the social security system for at least six months before their pregnancy will get 12 weeks of maternity leave.
• The maternity leave starts four weeks before the expected delivery date (8 weeks before the due date in case of multiple births).
• The maternity leave lasts until nine weeks after the child’s birth.
• If the child’s birth happens after the expected due date, the maternity leave extends to at least nine weeks after the birth.
• The maternity pay calculation uses the aggregate earnings of the previous six months.

Paternity leave

• According to the Angola General Labour Law, the father employees get one day of paid leave during a child’s birth.

Parental leave

• The employer can entitle a female employee to an extra four weeks of supplementary unpaid leave to look after the child. This benefit is offered after the maternity leave concludes and with a former agreement from the employer.
• The employees are entitled to three days of parental leave per month (up to 12 working days per year) to offer urgent assistance to employees’ family members.

Public holidays

•   The employees in Angola get 12 public holidays per year.

Other leave

• Family Support Leave: With employer approval, the employees are entitled to 8 days of paid family leave per year.
• Education Leave: After providing written notice to the employer, an employee can get 60 days of unpaid leave for education/training.
• Military Service Leave: An employee can get up to two days of paid leave for military service. The maximum military service leave is 15 days per year.

Termination terms in Angola

• The termination of an employment contract happens under the conditions like mutual understanding, unilateral termination (exercisable on the other party), and objective causes.
• After an employment contract terminates, the employee can encash unused leave for a particular year.
• The employer should pay the employee within three days after the employment termination.
• Angolan law permits payment in lieu of notice for employees dismissed due to economic reasons.
• The notice period for employees is 60 days.

Severance pay

• The employees in Angola get severance pay as follows:

Angola Payroll Processing Company

Foreign investors aspiring to govern timely, accurate, and compliant payroll in Angola should comprehensively understand reporting, local tax, and employment and compensation requirements. They should be familiar with compliance with Angola Labor and local employment laws before establishing payroll in Angola. You can use services from a global PEO company like Multiplier to acquire the premium advantages of payroll rules and regulations in Angola.

How Can Multiplier Help with Global Payroll?

Establishing payroll management in a foreign nation oversees diverse factors, from payroll processing to entitlement and termination terms. It can be difficult for businesses to autonomously administer the payroll rules and regulations in Angola since it is time-consuming. You can use the services from a worldwide PEO platform like Multiplier to tackle these challenges and effectively complete the Angola payroll process.

Multiplier is a notable EOR solutions platform proficient at handling the Angola payroll process, payroll calculation, employee recruitment, contributions, entitlement and termination terms, and other and other associated tasks. Furthermore, we provide a one-click payroll solution for worldwide businesses with payments sent in local currency.