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From
$249/month
$49/month
2% of gross salary / month
The small Asian nation Timor-Leste, received independence in 2002 and has since focused on rebuilding its infrastructure and living standards for residents. The democratic nation has a population of 1.3 million people who have welcomed initiatives to grow the country’s private sector. Its economic growth is expected to reach 4.1% in 2024 due to an ease in inflation. The official languages of Timor-Leste are Tetum and Portuguese, but English is becoming increasingly popular as a preferred choice of business language among the youth. If you are ready to hire in Timor-Leste, consider the growth and economic potential of the country and its people.
Hire in Timor-Leste, and pay employees through our platform or app.
Our Timor-Leste EOR solution is the most affordable on the market.
Fast Timor-Leste onboarding, hire in as little as 24 hours.
We draft compliant Timor-Leste labor contracts.
We manage all Timor-Leste mandatory benefits.
It doesn’t stop with Timor-Leste — we hire employees globally.
If you are prepared to adopt a strong and committed workforce in Timor-Leste, you should hire a professional employer of record, commonly known as an EOR. An EOR in Timor-Leste is established in the country and is recognized as a legal entity. The EOR specializes in representing and working with foreign businesses that want to hire employees in Timor-Leste. An employer will use an EOR if they do not have a business in the country, making it easier to find talented and skilled employees without the cost and legalities involved in registering an entity.
In this instance, you might find that the term professional employer of record, or PEO, is used instead of EOR. A PEO offers services such as recruitment, management of payroll, and HR administration but serves as a co-employer on behalf of their client. An EOR, on the other hand, is regarded as a legal employer and can perform a range of services that a PEO cannot. Being aware of these differences can assist businesses looking for the right HR solution.
A Timor-Leste EOR can hire employees on behalf of the employer or client company. The EOR will save businesses time finding a skilled workforce by eliminating the need to set up a registered entity in the country. An EOR is connected to services that recruit employees in Timor-Leste, making it easier to place employees who provide the best fit for the company. The professional EOR can support onboarding processes and help new employees adjust to their job roles. An EOR can help with compliance with labor laws so that the client company avoids penalties when hiring remote workers. With the average salary in Timor-Leste being $150 to $250, it’s more cost-effective to hire in this country than to establish a legal entity and deal with the legal process.
Horizons stands out as a Timor-Leste EOR through:
An EOR works by acting as a sole employer without taking over the management and performance of employees. This way, businesses are protected against violating the local labor laws that govern hiring, benefits, the minimum wage, and contract termination. The EOR in Timor-Leste provides HR services such as processing payroll and administering benefits, but they focus on keeping businesses compliant in the following ways:
Timor-Leste operates according to the Labor Code of the Republic of Timor-Leste (2012). The country’s labor code provides a breakdown of the regulations governing different aspects of employment, from remuneration to the type and amount of leave employees are entitled to throughout the year.
There are two main types of employment contracts in Timor-Leste, including the individual employment contract and the collective labor agreement. An individual employment contract is a written agreement that details terms such as remuneration, hours, benefits, and job positions. Individual contracts can be fixed and involve temporary or seasonal work. The fixed agreement cannot last longer than 3 years, including contract renewals. For permanent employees, contracts involving an unlimited period are signed. The role of a Timor-Leste EOR is to ensure that the conditions presented in a fixed or permanent contract adhere to the minimum labor law requirements.
No probationary period.
At completion of the project.
Not applicable
Typically up to 3 months
15 days
Not applicable
Typically up to 3 months
30 days
1 month salary per year of service
In Timor-Leste, employees must work a standard 8-hour day or 44-hour work week as per the Labor Code. Overtime work is paid at a rate of 50% of the regular hourly rate. Work that is completed on a weekend or a public holiday will be compensated at a rate of 100% of regular hourly rates.
150% of the standard hourly rate
200% of the standard hourly rate
200% of the standard hourly rate
The public holidays that are celebrated in the country include the following:
| Date | Holiday name |
|---|---|
| 1 Jan 2025 | New Year’s Day |
| 2 Jan 2025 | New Year’s Holiday (government) |
| 29 Jan 2025 | Lunar New Year |
| 3 Mar 2025 | Veteran’s Day |
| 5 Mar 2025 | Ash Wednesday |
| 31 Mar 2025 | Eid ul Fitr (Tentative Date) |
| 18 Apr 2025 | Good Friday |
| 1 May 2025 | Labour Day / May Day |
| 20 May 2025 | Restoration of Independence Day |
| 6 Jun – 7 Jun 2025 | Eid al-Adha (Tentative Date) |
| 19 Jun 2025 | Corpus Christi |
| 30 Aug 2025 | Popular Consultation Day |
| 1 Nov 2025 | All Saints’ Day |
| 2 Nov 2025 | All Souls’ Day |
| 3 Nov 2025 | National Women’s Day |
| 12 Nov 2025 | National Youth Day |
| 28 Nov 2025 | Proclamation of Independence Day |
| 7 Dec 2025 | Day of Remembrance |
| 8 Dec 2025 | Day of Our Lady of Immaculate Conception |
| 25 Dec 2025 | Christmas Day |
| 31 Dec 2025 | National Heroes Day |
The amount of paid time off employees are eligible to receive is based on how long they have been employed at their current company:
no leave entitlement
22 days of paid leave annually
22 days of paid leave annually
22 days of paid leave annually
Employees who fall ill or sustain a severe injury in an accident are entitled to 12 days of sick leave, provided they issue a medical certificate. The first 6 days are paid in full, and the remaining 6 days are paid at 50% of remuneration.
(percentage of regular wages owed to the employee)
no leave entitlement
12 days of paid leave annually
12 days of paid leave annually
12 days of paid leave annually
Unpaid (unless specified in the employment contract or under special circumstances)
Unpaid (unless specified in the employment contract or under special circumstances)
Unpaid (unless specified in the employment contract or under special circumstances)
In order for employees to receive the full wages due to them, workers must present a valid medical certificate from a certified doctor to their employer.
Paid time off includes paid maternity leave for pregnant women of 12 weeks, with 6 weeks reserved for after childbirth. Male employees can receive 5 days of paid paternity leave.
Workers must receive annual leave of at least 12 days. In addition to yearly leave, all Timor-Leste employees must be given 3 days of leave for family matters, including bereavement and emergencies.
Certain conditions constitute termination of an employee’s contract, including the expiration of the agreement or both parties agreeing to end the contract. An employer can initiate termination based on an employee violating the agreement. Changes in the structure and technology of the business are additional reasons for canceling an employment contract. It’s important to note that all employees must receive a written notice concerning termination based on their period of service with the company.
Severance pay is mandatory in Timor-Leste and depends on the length of employment with the same company. For example, an employee who has been working for the business for at least 1 year but less than 2 years will receive 60 days’ payment.
Social security contributions are governed by the Social Security Institute (Instituto de Segurança Social – ISS).
Pension fund is 8%, health is 2% and accident fund is 1% all of which is taken from the employee’s gross salary. Total employer contribution is 11% and for employees 4%.
Foreign employees working in Timor-Leste are generally subject to the same social security contribution requirements as local employees. However, there may be exceptions or specific arrangements based on bilateral agreements or special circumstances.
The tax system is progressive, meaning that higher income levels are taxed at higher rates. This ensures that individuals with higher incomes contribute more to public revenue. Tax ranges from 10 to 25%.
Health insurance is part of the compulsory social security contributions managed by the Social Security Institute (Instituto de Segurança Social – ISS). The public health insurance system covers a range of medical services, including hospital care, medical treatments, and some medications.
Private health insurance options are available but are less common. Individuals who wish to supplement their public health coverage with private insurance can explore options with local insurance companies.
The compensation laws in Timor-Leste are guided by the EOR, which will guarantee that the employer provides the workforce with the benefits that are owed to them. Employees are eligible for overtime pay, and they must receive surplus payment for nighttime work. The minimum wage in Timor-Leste is $115 per month, which came into effect in January 2012. Statutory compensation is guided by the Labor Code 2012.
Employees are entitled to annual bonus pay of one month’s salary, which must be settled on December 20th.
Social security contributions are paid to employees based on the employment scheme in Timor-Leste. All individuals who sign a contract with an employer have the right to receive social security contributions. The employer pays a rate of 6% on a contributory incidence basis and is responsible for issuing a declaration for individual employees and the entire workforce before the 10th of the new month.
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A Timor-Leste EOR understands the Labor Code and can easily communicate these regulations to a foreign company looking to hire a workforce in the country. Because an EOR is recognized as the sole employer of the workforce, it will be held accountable for issues of noncompliance. It is their duty to ensure that you follow the mandatory practices of labor law, as this will prevent any fines or lawsuits from being issued against the EOR and the client company.
Hiring an EOR in Timor-Leste simply makes the process of finding qualified employees and practicing labor laws quick, easy, and affordable. Rather than try to navigate barriers such as languages and culture, the EOR in the country can handle these challenges on behalf of their clients. An EOR will discuss aspects of an employment contract with employees and assist with the onboarding process. From the steps to hiring the right individuals for the job to including benefits, minimum wages, and procedures for termination, these aspects are handled by a trusted and experienced EOR.
Holiday Schedule in Timor-Leste [2025]
