How to Hire Employees in Tunisia Using an Employer of Record
When your company recruits foreign talent to fill specialized roles you may wonder about the best way to hire them. Many remote contractors are willing to work as contractors, but that may not be the best solution. Contractors could fill your short term needs, but if you want to retain their skills it may be necessary to offer them full employment. Employees will usually be more loyal as they receive the entitlements and stability they need.
To hire a foreign employee in their own country, there has to be a local entity to run payroll. You can set up your entity, but that will prove to be time consuming and expensive. A better option is to use an employer of record (EOR) solution, where the EOR has an entity set up and ready to administer all employment for you.
What to know when hiring employees in Tunisia
If you have found a viable recruit in Tunisia, you will want to review the local employment entitlements, contract types and social contributions. These will all apply equally whether you set up an entity or use an EOR solution.
Employment in Tunisia
Written employment contracts are not required, as long as there is other evidence of the employment relationship. If there is an employment contract, it must be written in Arabic or French.
Vacation leave: Leave is accrued at one day for every month of service, up to 12 days annually, typically used between June and October.
Sick leave: There is no restriction on the number of sick leave days, and it is paid at 2/3 of the daily salary. The employer pays the first five days, and social security pays all subsequent days.
Maternity leave: New mothers receive 30 days leave, paid by social security.
Paternity leave: New fathers receive 2 days of leave.
Payroll and Tax in Tunisia
Income tax rate: The personal income tax is 0-35% after deductions.
Social security and payroll contributions:
Because social security pays many employee entitlements, the contribution rates in Tunisia are fairly high at a combined total of nearly 26% of salary.
- Employer contributions: 16.57%
- Employee contributions: 9.18%
Immigration and Work Permits in Tunisia
If your company has recruited an expat who is living in Tunisia, they will need a work permit. This rule applies even they already have residency and a different type of visa. Work permits require a Tunisian corporate sponsor and evidence that the position cannot be filled by a Tunisian. Realistically, the only way to obtain a work permit is with an EOR as the Tunisian sponsor.
How to hire employees in Tunisia with an employer of record
Because of the difficult process of setting up an entity in a foreign country, the EOR solution is your best option to hire remote employees. You recruit the worker as usual, and once an offer is extended and accepted the EOR will step in.
The EOR collects all the employee’s information and documents, drafts the employment contract in the local language, and onboards the employee. The employee is placed on the Tunisian payroll while taxes and social contributions are withdrawn by the EOR. The EOR also issues a payslip each month and sends your company a copy.
Your company manages the employee remotely in their daily work methods and schedule, but you don’t have to do any of the employment administration. You will remit total compensation plus employer contributions each month, and the EOR will advise you of all leave entitlements and other employment rules.
Alternatives to hiring employees in Tunisia without an EOR
If you are not quite ready to use the employer of record solution, two alternatives exist to hire employees in Tunisia.
Set up a local entity
A company planning an expansion or other commitments in Tunisia may find it worthwhile to set up its branch or subsidiary. Then, any employees could be hired directly and put on the entity payroll. This could be a good option when recruiting an entirely remote team. If not, the EOR is efficient in hiring a few employees.
Hire as contractors
Hiring a contractor can be much simpler, but you do run the risk of losing their skills at some point. The worker could be given a trial period as a contractor, and then offered an employee role if they work out. In the meantime, they would handle all of their taxes and contributions, so there is no further obligation for your company beyond payment.
One downside to contractors is that many countries are stepping up enforcement of misclassification rules. Misclassification is when a contractor is treated as an employee but does not receive any of the benefits or entitlements. In addition, the government does not receive the employer social contributions, so the working relationship could be scrutinized at any time for employee-like elements.
How Contractor Taxation helps you hire employees in Tunisia
In addition to our expertise, we offer access to a global network of employers of record in Tunisia. Our partner can show you how simple it is to hire with an EOR and offer account management as well.
Depending on your situation, you can transition an existing high-value contractor to a Tunisian EOR as an employee, and if you ever decide to set up an entity the EOR can help with that handover of personnel as you begin to run your own payroll.
What this means is that you are never on your own when employing abroad, as your employee relationship is secure, compliant and flexible if your needs change. Please contact us if you want to learn more about this foreign employment solution.How to Hire Employees in Tunisia Using an Employer of Record