Employer Tax Contributions

Tax Type	Rate	Base
Pay As You Earn (PAYE)	Progressive (0% - 25%)	Employee's taxable income
NASSCORP (Social Security)	5% (employer contribution)	Employee's gross monthly earnings
Workers' Compensation	1.75% (employer contribution)	Employee's monthly gross earnings

Filing & Compliance

• Monthly PAYE and NASSCORP remittances are due by the 15th day of the following month.
• Annual Employer Reconciliation is due by March 31st of the following year.
• The tax year runs from January 1st to December 31st.

In Liberia, employers deduct various taxes and contributions from employee salaries, including income tax and social security contributions.

Income Tax

Income tax is calculated based on a progressive tax system with graduated rates. The rates for the 2025 tax year are as follows:

• Annual Chargeable Income (LRD) Up to 70,000: 0%
• Annual Chargeable Income (LRD) 70,001 - 200,000: 5%
• Annual Chargeable Income (LRD) 200,001 - 800,000: 15% (6,500 LRD plus 15% of the excess over 200,000 LRD)
• Annual Chargeable Income (LRD) Over 800,000: 25% (96,500 LRD plus 25% of the excess over 800,000 LRD)

Employers are responsible for withholding income tax from employee salaries monthly and remitting it to the tax authorities within 10 days of the end of the month. Non-cash benefits, like company cars or housing, are generally taxable, although some exemptions apply. For example, non-cash benefits not exceeding 100,000 LRD annually are exempt.

Social Security Contributions

Both employers and employees contribute to the National Social Security and Welfare Corporation (NASSCORP). The contribution rate for both is 4% of the employee's monthly gross salary. Employers deduct the employee's portion from their salary and remit both portions to NASSCORP. It's important to keep in mind that changes to the tax rates are possible with the Liberian 2026 budget proposal to replace Goods and Services Tax (GST) with a Value Added Tax (VAT), although details are yet to be confirmed.

Other Deductions

Other deductions from employee salaries may include:

• Other Statutory Deductions: No information available
• Voluntary Deductions: These might include union dues, health insurance premiums (if not covered by the employer), or contributions to retirement savings plans.
• Court-Ordered Deductions: Garnishments for debts or child support obligations.

Goods and Services Tax (GST)

As of February 2025, Liberia levies a 10% Goods and Services Tax (GST) on most goods and services. Businesses do not currently deduct input GST, which can lead to tax cascading. Note: Liberia plans to introduce a VAT system in 2026, replacing GST. Details of the transition and potential rates are still being developed as of today's date. This new regime aims to resolve issues arising from GST, like the inability for businesses to deduct input tax.

Important Considerations for Employers

It's crucial for employers in Liberia to stay updated on tax laws and regulations. Using an Employer of Record (EOR) can greatly simplify navigating complex payroll processes, ensuring accurate tax calculations and compliance. EORs handle all aspects of Liberian payroll, including tax deductions, social security contributions, and compliance with local labor laws. This allows businesses to focus on their core operations without the added burden of managing intricate payroll procedures in a foreign jurisdiction. Given the planned implementation of VAT in 2026, using an EOR becomes even more critical for managing the transition smoothly.