Lesotho Payroll & Social Contributions

Payroll withholding and social contributions

Employers operate PAYE on employee salaries and remit it to the RSL monthly. Lesotho has historically had no comprehensive mandatory national social-security or pension scheme for private-sector employees, so contribution practice varies — the items below are flagged for accountant confirmation.

• PAYE withholding — Employers must deduct PAYE from employees' chargeable employment income each pay period and remit it to RSL (Income Tax Act)
• PAYE rate scale — 20% up to LSL 74,040/year, 30% above, less the LSL 1,056/month personal tax credit percent (Income Tax Act)
• PAYE remittance deadline — 15th of the month following the month of deduction ((approx — confirm)) (Income Tax Act)
• Mandatory national social security — No comprehensive mandatory contributory national social-security/pension scheme for private-sector employees; a non-contributory old-age pension is funded from general revenue ((approx — confirm; some providers report employer/employee pension deductions for specific schemes)) (Old Age Pensions Act)
• Employer/employee pension contributions — Where a private/occupational pension or provident scheme applies, employer and employee contributions are commonly around 5% each of gross salary percent ((approx — scheme-specific, not a universal statutory rate; confirm)) (Employer occupational pension scheme rules)
• Contribution wage base / cap — No universal statutory social-security wage cap (scheme-specific where occupational pensions apply) ((approx — confirm)) (Employer occupational pension scheme rules)
• Annual PAYE reconciliation — Employers file an annual PAYE reconciliation/return summarising deductions and issue employee certificates ((approx — confirm form and due date)) (Income Tax Act)
• Late PAYE remittance penalty — Penalties plus interest on amounts remitted late ((approx — confirm exact penalty and interest rates)) (Income Tax Act)