Guide to employment, payroll and benefits in

Timor-Leste

Rivermate offers complete payroll, benefits and compliance services for

Timor-Leste

01. Overview

Last updated: 

August 19, 2021

Currency
New Zealand Dollar
Capital
Dili
Ease of doing business
39.4
Language
Portuguese
Population
1318445
GDP growth
-8.00%

02. Grow your team in

Timor-Leste

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

Timor-Leste

, particularly if you don't have established local relationships. You can hire employees in

Timor-Leste

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

East Timor, also known as Timor-Leste, is an island country in Southeast Asia that is officially known as the Democratic Republic of Timor-Leste. It consists of Timor's eastern part, the neighboring islands of Atauro and Jaco, and Oecusse, an exclave on the island's northwestern side surrounded by Indonesian West Timor. The Timor Sea separates the country from Australia, which is its southern neighbor. East Timor was colonized by Portugal in the 16th century and was recognized as Portuguese Timor until the Revolutionary Front for an Independent East Timor proclaimed independence on November 28, 1975. It was invaded and occupied by the Indonesian military nine days later, and the following year it was designated as Indonesia's 27th province. The Indonesian occupation of East Timor was marked by a decades-long, highly violent conflict between separatist groups and Indonesian military forces. Indonesia relinquished control of the territory in 1999, following a UN-sponsored act of self-determination. On May 20, 2002, it became the first modern sovereign state of the twenty-first century, joining the United Nations and the Community of Portuguese Language Countries as Timor-Leste. East Timor declared its intention to join the Association of Southeast Asian Nations as the eleventh member in 2011. It is one of only two primarily Christian countries in Southeast Asia, the other being the Philippines, and Asia's only country entirely in the Southern Hemisphere.

04. Public holidays

05. Types of leave

Paid time off

Public holidays

Sick days

Maternity leave

Paternity leave

Parental leave

Other leave

06. Employment termination

Termination process

Employers and employees both have the right to end their contracts with sufficient notice. Employers may terminate an agreement only for the reasons specified in the Labour Code, which are as follows: contract expiration for fixed-term agreements; mutual agreement between parties; termination on the employee's initiative; termination on the employer's initiative on reasonable grounds; and termination for market, technological, or structural reasons relating to the business, with a minimum of no less than one year.

Notice period

In Timor-Leste, the notice period is limited to 30 days.

Severance pay

There are no specific provisions tailored to severance payments in Timor-Leste.

Probation period

The probation period is set at eight to fifteen days for fixed-term contracts. For contracts with an indefinite duration, the probation period is set at one to three months.

07. Working hours

General

According to the Labour Code, working hours cannot exceed eight hours per day or 44 hours per week. Employees are not permitted to work more than four hours of overtime per day or sixteen hours per week unless the additional overtime is necessary to prevent or repair severe damage to the business. Employees are entitled to a one-hour break after every five hours worked.

Overtime

Additional compensation is required for overtime, work on public holidays, and night work. Overtime work is compensated at 50% of the regular rate of pay. Working on a federal holiday is compensated at twice the regular rate of pay. Work performed at night or between the hours of 9 p.m. and 6 a.m. is compensated at 125 percent of the regular pay rate.

08. Minimum wage

General

Timor-Leste's minimum wage rate is US$115 per month.

09. Employee benefits

General

Because Timor-health-care Leste's system is mostly financed by the government, employer-provided health-care coverage is not needed.

Individuals have access to a government-run social security system, and businesses are required to enroll both the firm and its workers in the system. Employers may incorporate their own perks and provisions for internal workers, but they are not required to provide any extra benefits.

According to the Labour Code, workers must give one yearly bonus on or before December 20 of each year. The bonus should be equal to one month's salary. There are no further incentives needed, but your business may provide additional bonuses to create a more attractive job package to local talent.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

Timor-Leste

to hire a team takes time, money, and effort. The labor law in

Timor-Leste

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Timor-Leste

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Timor-Leste

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Timor-Leste

via our Employer of Record / PEO solution.

Ready to get started? Our friendly staff is ready to assist you with all your questions, let's connect.