Lebanon: A Guideline to Payroll and Employer of Record

Establish your presence globally with Neeyamo as we help you go beyond borders to manage your international payroll and hire new talent in Lebanon.

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Overview

Much like other groundbreaking inventions such as the telephone, the light bulb, and paper, the invention of the Phoenician Alphabet, which emerged in Lebanon around 1050 BC, holds immense significance in human history. It was a pivotal milestone in developing various modern writing systems. Throughout its rich history, Lebanon has consistently demonstrated its people's talents and capabilities and continues to harbor a highly skilled workforce with a diverse range of abilities.

Do your organization's expansion plans require hiring employees in a country permeated with ambition? If you lack a physical entity in the country – a key requisite to hiring local talent- your solution is the best HR payroll software, Neeyamo – Global Payroll Services. Neeyamo's international payroll system assists in onboarding and managing employees in Lebanon- processing payroll and payroll accounting, managing global payroll compliance requirements, benefits, and more.

Tools And Instances

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Global Payroll

Neeyamo’s global payroll solution covering 180+ countries

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Global Work

A tech-based EOR solution to manage your extended workforce

Facts And Stats

Capital

Beirut 

Currency

Lebanese Pound 

Official Language

Arabic 

Fiscal Year

1 January - 31 December

Date Format

DD/MM/YYYY 

Country Calling Code

+961

Time Zone

Lebanon (GMT+3)

Global Payroll

Overview

Payroll: Meaning 

Payroll is the list of compensation to be paid to employees of a company or organization for a set period or date. Global payroll provider companies allow organizations to outsource their payroll, allowing employers to focus on other aspects of their business. 

Handling payroll for a widespread workforce can pose a major challenge for any firm. The added complication of compliance can make things worse and drastically affect the time and efforts that can be used in other equally important aspects of an organization's development. 

Over the years, Neeyamo has observed these complexities and strived to provide a global payroll solution through a single technology platform, Neeyamo Payroll.

Payroll Taxes

Payroll tax is the percentage amount retained from an employee's salary and paid to the government to invest in the general population's welfare. These are statutory in nature and are levied from both the employer and employee. Additional statutory contributions are made by employers towards aiding both short-term and long-term benefits for their employees.

Employee Taxes

Taxable Income Rate (%) 

Personal Income Tax Rate in Lebanon remained unchanged at 25 % in 2023. The maximum rate was 25 %, and the minimum was 20%.

Employee Contribution 

  • Medical Scheme Employee- 3% 

Employer Taxes

Employer Payroll Contributions

Taxable Income Rate (%) 

Personal Income Tax Rate in Lebanon remained unchanged at 25 % in 2023. The maximum rate was 25%, and the minimum was 20%.

Up to LBP 9,000,000 4%
LBP 9,000,001–LBP 24,000,000 7% 
LBP 24,000,001–LBP 54,000,000 12% 
LBP 54,000,001–LBP 104,000,000 16% 
LBP 104,000,001–LBP 225,000,000 21% 
Over LBP 225,000,000 25%

Social Security in Lebanon 

However, the overall amount of an employer's social contributions is 22.5% of an employee's gross pay. This is split into:  

  • Employer Contribution 

  • Social Security 

  • Maternity and Sickness Benefit Scheme-8% 

  • Family Benefit Scheme - 6% 

  • End of service indemnity - 8.5% 
  • Medical Scheme

Other taxes in Lebanon for 2023:

  • Corporate Tax Rate - 17%
  • Employer Tax- 22.5% 
  • Sales Tax Rate - 11%
  • Social Security Rate - 25.5%

Personal Income Tax Rate is 25%

With effect from April 26, 2023:

  • The daily transportation allowance is 250,000 LBP.
  • Cost of Living expenses is LBP 4,500,000.
  • Increase in schooling allowance.

Payroll Cycle

Overview

Undoubtedly, payroll is a critical process for any organization. The Pay cycle is a notable feature that provides a sense of accountability for an employee to be paid consistently for their work.

Frequency

The payroll frequency in Lebanon is typically monthly.  

13th Month Cycle

There is no statutory requirement to pay the 13th or the 14th month salary. There is no evidence that bonuses are customary.

Global Work

Overview

An Employer of Record services (EOR) provider helps you get rid of the hassle of handling the complexities that come with setting up a new employee in remote locations. They act as legal employers, facilitate salary payments, and handle everything from health insurance. Payroll taxes, and employee benefits to comply with local tax laws and regulations.

This allows organizations to focus on collaborating with employees in Lebanon for operational tasks, knowing they have a cost-effective solution to support their global corporate payroll services & HR requirements as they continue their global expansion.

Neeyamo, being a Cloud-based HR and Payroll company providing one of the best payroll services and software solutions, strives to provide its customers with a seamless employee management experience and offers global compliance in payroll and EOR aspects with our Global Payroll Technology Stack. Neeyamo provides both managed payroll services with an automated payroll system as well as EOR services under one umbrella. 

HR Mandates and Practices

Minimum Wage

The minimum wage is 675,000 LBP. The basic salary should be fully enrolled in the National Social Security Fund (NSSF) and Ministry of Finance. 

Overtime

A normal working day should be 8 hours a day and 48 hours per week. Overtime is paid for excess hours above 48 working hours per week on the basis of 50% extra payment. 

Data Retention Policy

Data privacy is protected in a general manner by the Penal Code, which makes it a criminal offense to use or disclose individuals' personal data without their consent. Under the Civil Code, an individual whose rights are breached in this way may bring a court case seeking compensation/damages and/or an order to end the infringement. There is no specific legislation on data protection in the employment context but the Penal Code's provisions indicate that employers can collect and use personal data only with the consent of the employee or job applicant concerned. 

Record keeping, rules and regulations 

Employers that employ at least five employees must (under the Labour Law) keep a file for each employee, stating their name, occupation, age, nationality, address, marital status, date of employment, wages (and any adjustments to them), any disciplinary sanctions penalties imposed, and occupational injuries and diseases sustained, and the date of and reasons for termination of employment. The file must include a leave card, a recording of annual leave, sick leave and other leave taken.

Employers that employ at least 15 employees must keep at every workplace:

  • A payroll record stating for all employees the date employment started and ended, the days worked, the amount of daily, weekly or monthly wages paid, fringe benefits and any piecework or commission payments 

  • A record of all occupational injuries and diseases sustained 

  • “Basic work regulations”, approved by the public labor authorities and displayed prominently, stating the daily working hours, the weekly rest period, public holidays, and the measures and precautions taken for the prevention of occupational injuries and fire hazards 

  • Disciplinary rules, approved by the public labor authorities and displayed prominently, stating the applicable disciplinary offenses and sanctions.

Hiring and Onboarding Requirements

Hiring

In order to hire employees in Lebanon, businesses need to either establish a legal presence there or partner with a local employment agency. Managing payroll, benefits, taxes and new hire onboarding in a foreign country like Lebanon can be difficult if the appropriate procedures are not established from the start, especially in the absence of localized experience.

Hiring foreigners in Lebanon 

Foreign nationals living in Lebanon are legally allowed to work in the country so long as they obtain approval from the Ministry of Labor and are granted a Work Permit. 

Probation

The maximum probationary period is 3 months. 

Leave

National Holidays

Under the Holidays Act, employers are required to provide paid time off to employees for the following public holidays: 

  • 1 Jan - Sunday New Year Public Holiday 
  • 6 Jan - Friday Orthodox Christmas Public Holiday 
  • 9 Feb - Thursday St Maron's Day Public Holiday 
  • 14 Feb - Tuesday Commemoration of the Assassination of PM Rafic Hariri Public Holiday 
  • 25 Mar - Saturday Feast of the Annunciation Public Holiday 
  • 7 Apr - Friday Good Friday Public Holiday 
  • 10 Apr - Monday Easter Monday Government Holiday 
  • 14 Apr - Friday Orthodox Good Friday Public Holiday 
  • 16 Apr - Sunday Orthodox Easter Day Public Holiday 
  • 17 Apr - Monday Orthodox Easter Monday Government Holiday 
  • 21 Apr - Friday Eid al-Fitr Public Holiday 
  • 22 Apr - Saturday Eid ul Fitr Holiday Public Holiday 
  • 1 May - Monday Labor Day Public Holiday 
  • 7 May - Sunday Martyr's Day Public Holiday 
  • 7 May - Sunday Liberation and Resistance Holiday Public Holiday 
  • 28 Jun - Wednesday Eid al-Adha Public Holiday
  • 29 Jun - Thursday Eid al-Adha Holiday Public Holiday 
  • 30 Jun - Friday Eid al-Adha Holiday Public Holiday 
  • 19 Jul - Wednesday Muharram (Tentative Date) Public Holiday 
  • 28 Jul - Friday Ashoura (Tentative Date) Public Holiday 
  • 15 Aug - Tuesday Assumption of Mary Public Holiday 
  • 27 Sep - Wednesday The Prophet's Birthday (Tentative Date) Public Holiday 
  • 22 Nov - Wednesday Independence Day Public Holiday 
  • 25 Dec - Monday Christmas Day Public Holiday" 

Annual Leave

Annual Leave in Lebanon

  • 15 days from 1 (completed year) till five  years of employment
  • 17 days from five till ten years of employment
  • 19 days from 10 till 15 years of employment
  • 21 days for More than 15 years

Maternity Leave

Lebanese law currently allows women to take up to 10 weeks of paid maternity leave 

Paternity Leave

Male employees are entitled to 3 days of paternity leave 

Sick Leave

Entitlement to sick leave depends on the length of service. It goes as follows: 

  • Between three months and two years of service: Half a month on full pay and half a month on half pay 
  • Between two and four years: One month on full pay and one month on half pay 
  • Between four and six years: One and a half months on full pay and one month and a half pay 
  • Between six and ten years: Two months on full pay and two months on half pay 
  • More than ten years: Two and a half months on full pay and two and a half months on half pay. 

Other Leave

Bereavement leave 

  • Employees are granted a paid leave of up to two days in the event of the death of a first-level relative (father, mother, spouse, child, grandchild, sister, brother, grandfather or grandmother) with full pay.
  • Employees are granted a paid leave of up to 1 day in the event of the death of a 2nd level relative (uncle, aunt, cousin, niece, nephew, brother-in-law, sister-in-law, father-in-law, or mother-in-law).
  • Proof document (obituary paper) should be provided to the HR department when the employee resumes work.

Marriage leave 

Employees are granted a one-week paid leave for their marriage, and this is only for “one time” during their employment with the company. 

Termination

Notice Period

The length of notice is specified by law and cannot be reduced. It varies with the length of the employee’s employment: 

  • Under three years: One-month prior notice.  
  • Three years to six years: Two months’ prior notice.  
  • Six years to twelve years: Three months’ prior notice.  
  • Over twelve years: Four months’ prior notice.  

Severance Pay

The pay to be taken for the assessment of indemnities referred to is the last one paid before dismissal for the dismissal advance notice. 

Pay is understood to be the basic remuneration calculated at the time and encashed by the employee as well as the allowances and commissions added to the basic pay. 

If pay was calculated in whole or in part on the basis of commission, account shall be taken of the average sum actually encashed by the employee during the twelve-month period before dismissal. 

Visa

Overview

Lebanon Immigration System 

All expatriates working in Lebanon must have a work permit and a residence permit. Such permits may be issued only at the request of an employer. To obtain a work permit, the following items must be submitted:

  • A special work permit application completed and signed by the applicant and the employer.
  • A list of the names of the foreign employees (if any) at the office of the employer that must be signed and sealed by the employer
  • The address of the employer
  • The passport or the identity card of the expatriate. The Minister of Labor retains a photocopy of this document.
  • A medical report evidencing that the expatriate is free from epidemic diseases.
  • A photocopy of the employer’s registration in Lebanon.
  • A list of authorized signatures of the employer.
  • A certified copy of the employment contract entered into between the employer and the expatriate.
  • -A quittance (discharge or clearance certificate) issued by the Social Security National Fund.

Employee Background Checks

Legal and Background Checks

Lebanon Criminal Records Search  

Requirements: Name, DOB, Current Address, copy of passport or ID (USA DL is acceptable), Release 

The nationwide criminal record search in Lebanon is conducted through the Ministry of Interior. This search will report back felony-level convictions in the past seven years. The Report may include case type, file date, file location, case number, charge information, disposition information, and sentencing information. 

Employment Verification in Lebanon  

Requirements: Name, date of birth, employer name and contact information, dates of employment, position held and release form 

Past employment verification is recommended for all employees. It is approximated that 40% of all resumes and employment applications contain falsified information. Our standard Employment Verification reports the employer’s name, subject’s title, dates of employment, and whether they are eligible for rehire, and we ask for additional comments. 

Last updated on October 6, 2023

If you have any queries or suggestions, reach out to us at irene.jones@neeyamo.com

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