What is gratuity in Botswana?

The employer should be funding 2.12% of the Annual Basic Salary during the first 5-year period and 4.23% thereafter. The calculations are shown at the end of this article. Most employers simply pay this out of working capital when the amount is due.

What is severance pay in Botswana?

Severance is paid at the rate of 1 day per month of service (12 days per year) up to 5 years of employment and 2 days for each month worked (24 days per year) beyond 5 years.

How is leave pay calculated in Botswana?

Annual paid leave An employee shall be entitled to paid leave at the rate of at least 15 working days in respect of each period of 12 months’ service calculated at the rate of one-and-a-quarter working days for every completed month of service.

Is gratuity the same as severance?

Gratuity basically means a monetary gift from an employer to an employee especially for services rendered. Severance pay, as discussed last week, is only paid when an employee is declared redundant. Gratuity is a lump sum amount that an employer pays an employee if he/she retires or resigns from employment.

Why gratuity is given?

Gratuity is the monetary amount which is payable to the employee of an organisation under the Payment of Gratuity Act 1972. This is mainly paid to the employee as a token of appreciation for his/her services towards the company.

How is gratuity taxed in Botswana?

Two-thirds of severance pay or terminal gratuity is taxed. Pension contribution not more than 15% of remuneration is deductible….Withholding Taxes and Final Tax Rates.

Who is entitled to severance?

In order to qualify for severance pay, you must have been with your employer for five or more years. Furthermore, your employer must have a payroll over $2.5 million or have terminated the employment of 50 or more employees within a six-month period due to the permanent closure of all or part of their business.

What is the formula for severance pay?

Accordingly, you would divide your yearly salary by 52 to get the weekly pay rate. Then, multiply this pay rate by the number of weeks. If you earn $39,000 a year, then you make $750 a week. If you worked for the company for 10 years, then you would get $7,500 in severance.

What is the minimum wage in Botswana?

3.8 Botswana pula
What is the Botswana Minimum Wage? Botswana’s Minimum Wage is the lowest amount a worker can be legally paid for his work. Most countries have a nation-wide minimum wage that all workers must be paid. The Botswana minimum wage is 3.8 Botswana pula an hour for most full-time workers in the private sector.

Is gratuity payable on termination?

Gratuity Payment Rules: Employees will become eligible for payment of Gratuity only after termination of his employment on completion of 5 continuous years in service, according to the Code on Social Security 2019 introduced in Lok Sabha.

Who qualifies for gratuity?

The Payment of Gratuity Act, 1972, states that an employee is eligible to get gratuity only after he or she has worked with an organization for at least five years. The employee stands to receive the gratuity amount on his or her superannuation, or at the time of retirement or resignation.

When do you have to pay gratuity in Botswana?

ii)The gratuity must be due in the terms of a written contract or employment; iii) The gratuity must be due only on termination of the contract or employment; iv) There must have been a continuos period of not less than two years employment under the contract, in Botswana, at termination;

What’s the legal definition of an illegal gratuity?

Illegal Gratuity Law and Legal Definition. Illegal gratuity is something of value that a person gives offers or promises for the purpose of influencing the action of an official in the discharge of his or her public or legal duties.

How much tax do you pay on pension in Botswana?

Two-thirds of severance pay or terminal gratuity is taxed. Pension contribution not more than 15% of remuneration is deductible. An individual may escape tax in Botswana if he is away from Botswana for a period in excess of 183 days in a year. Housing benefit is taxed on 10% of municipal ratable value.

How long can you go to jail for a gratuity?

If a person gives or receives an illegal gratuity conviction, they face a prison term of up to two years. A bribery conviction can result in up to 15 years of imprisonment as well as huge fines under the Federal Corrupt Practices Act. A conviction for giving or receiving an illegal gratuity is up to a two-year prison sentence.