Mozambique Invest - Labor & Immigration

Social Security in Mozambique

Understanding Your Rights and Obligations

Contributions, Coverage, and Compliance for Employers and Workers

Mozambique operates a compulsory social security system that covers both local and foreign workers, though significant exemptions exist for expatriates with home country coverage. Understanding contribution obligations, registration requirements, and timing deadlines is essential for legal compliance.

The 7% Contribution Split

Employer and Employee Shares

Social security contributions total 7% of defined gross remuneration, split between employer (4%) and employee (3%). This division places the larger burden on employers while ensuring employees have stake in the system through their direct contribution.

The 4% employer contribution represents a fixed labor cost that must be factored into employment budgeting. Unlike discretionary benefits, this contribution is legally mandatory and cannot be negotiated away or reduced through agreement.

The 3% employee contribution is withheld from wages by employers, who act as collection agents. Employees never see this portion of their salary - it flows directly from employer to the National Institute of Social Security (INSS). Employers bear responsibility for accurate withholding and timely remittance.

What Counts Toward the Base

The contribution base encompasses most regular compensation elements. Basic wage forms the foundation, but the calculation extends significantly beyond minimum salary.

Seniority bonuses rewarding tenure, management bonuses for supervisory roles, and regular income or productivity premiums all enter the base. Attendance premiums paid consistently to reward punctuality count, as do night work payments compensating evening shifts. Other regular allowances and commissions, provided they're paid consistently rather than sporadically, also contribute to the base.

The key distinction is regularity and predictability. Payments that employees can reasonably expect each month or pay period typically count toward the social security base. One-time bonuses, irregular allowances, or unpredictable payments generally don't.

What's Excluded

Various subsidies detailed in social security law fall outside the contribution base. These typically include reimbursements for actual expenses incurred rather than compensation for labor.

Transportation reimbursements covering commuting costs, meal vouchers for food during work hours, and similar expense-replacement payments often qualify for exclusion. The rationale is that these amounts don't represent income but rather offset costs employees incur to perform work.

Irregular or occasional payments also escape the contribution base. Year-end bonuses paid unpredictably, one-time performance awards, or sporadic gifts don't contribute to the calculation. This exclusion prevents administrative complexity from variable payments while focusing contributions on stable, recurring income.

Registration Obligations

Employer Registration Timeline

Employers must register with INSS within 15 days of business commencement or company acquisition. This tight deadline means registration should be among the first administrative tasks when establishing operations.

The 15-day window starts from the actual commencement date, not incorporation date. A company incorporated in January but beginning operations in March has 15 days from March, not January. However, if operations begin immediately upon incorporation, the clock starts immediately.

Company acquisitions trigger the same 15-day requirement. Purchasers acquiring existing businesses must register separately even if the predecessor was registered. The registration is entity-specific, not transferable.

Employee Registration Responsibility

Registering employees falls entirely on employers. Workers themselves need not take any action - the employer must complete registration within 30 days of contract commencement.

For employees already registered from previous employment, the process simplifies. Employers need only include the existing social security number on wage sheets. The system recognizes the worker and attributes contributions to their existing account.

New registrations require more documentation but remain employer-managed. Workers provide identification and personal information to employers, who submit registration applications to INSS on workers' behalf.

Mandatory Updates

Changes in employment status require notification within 30 days. Cessation of employment, contract suspension, termination, or significant contract modifications all trigger update obligations.

These updates matter because INSS presumes employment continues until notified otherwise. Failure to report termination means contribution obligations continue indefinitely. An employer who terminates a worker but doesn't notify INSS remains liable for contributions as if employment continued.

This creates significant exposure. An employer dismissing ten workers but neglecting to file termination notices would owe contributions for those workers month after month despite them no longer being employed. The system presumes continuation until formally notified otherwise.

Payment Mechanics

Monthly Payment Window

Contributions must be paid monthly between the 20th of the current month and the 10th of the following month. This 20-day window provides flexibility while ensuring timely revenue flow to INSS.

Payment on the 25th of September for September wages complies. Payment on the 5th of October for September wages also complies. Payment on the 11th of October for September wages violates the deadline and may trigger penalties.

Electronic Platform Requirement

All payments must use the electronic platform payment guide generated by INSS systems. Manual payments, direct bank transfers without proper coding, or other informal methods don't satisfy the obligation.

The electronic system ensures contributions are properly attributed to employer accounts and individual worker records. It also enables INSS to track compliance efficiently and identify delinquent employers quickly.

Foreign Worker Exemptions

Home Country Coverage Exception

Foreign workers demonstrating coverage under their home country's social security system are exempt from Mozambican contributions. This prevents double taxation of the same income for social security purposes.

The exemption requires authenticated proof. Documents must be issued either by Mozambican consular services in the origin country or declared compliant by the employer. Simply asserting home coverage isn't sufficient - documentary evidence is mandatory.

The authentication requirement prevents fraud. Without verification, workers might claim exemption while not actually maintaining home country coverage, leaving them unprotected in either system.

Bilateral Agreements

Bilateral social security agreements simplify the exemption process for nationals of treaty countries. The Portugal-Mozambique Convention, in force since 2016, is currently the primary operative agreement.

These agreements establish coordination mechanisms allowing workers to accumulate benefits across both systems, prevent double coverage, and simplify portability. Workers moving between Portugal and Mozambique can aggregate contributions for benefit calculations rather than losing coverage when relocating.

Additional bilateral agreements may be negotiated with other major labor-sending countries. Workers from treaty countries should verify whether agreements exist that could affect their social security obligations and benefits.

Practical Application for Foreign Workers

Foreign workers seeking exemption should secure documentation before arriving in Mozambique. Obtaining proof documents after arrival is more complicated, particularly if consular services aren't readily accessible.

Employers hiring exempt foreign workers should verify and retain documentation. INSS audits will require proof of the exemption basis. Missing documentation exposes employers to retroactive contribution demands.

Some foreign workers may prefer contributing to Mozambican social security despite holding home country coverage. Voluntary participation is generally not permitted under current regulations - exemption is mandatory for those with qualifying home coverage.

Workplace Accident Insurance

Separate from Social Security

INSS social security contributions don't cover workplace accidents or occupational diseases. This coverage is employer responsibility through separate collective insurance policies.

Employers must purchase workplace accident insurance from private insurers or state insurance entities. The policy must cover temporary and permanent disability from work-related injuries or illnesses, plus subsistence for workers during recovery periods.

Failure to maintain this insurance leaves employers directly liable for all costs related to workplace injuries. In serious accident cases, this liability can be substantial - medical expenses, disability payments, and potential wrongful death claims all fall to employers lacking proper coverage.

Coverage Requirements

Workplace insurance must cover all employees regardless of nationality, contract type, or wage level. Part-time workers, fixed-term contractors, and foreign employees all require coverage.

Premium calculations typically consider industry risk levels, workforce size, and claims history. High-risk industries like construction or mining face higher premiums than office-based services.

Employers should verify coverage adequacy annually. Growth in employee numbers, changes in activity types, or increased risk exposure may require policy adjustments to maintain sufficient coverage.

Enforcement and Consequences

Inspection Authority

INSS and labor inspectorate officials can audit employer compliance at any time. Inspections review registration records, contribution payment histories, and workforce documentation.

Employers must maintain accessible records showing all employees, their registration status, contribution calculations, and payment proof. Missing or incomplete records trigger presumptions against employers.

Penalties for Non-Compliance

Late payment penalties accrue on overdue contributions. Interest charges compound monthly, and administrative fines may be assessed for persistent delinquency.

Failure to register employees creates exposure for both missing contributions and penalties. Since unregistered employment is presumed to continue until notified, the liability can accumulate for extended periods.

Criminal liability may attach in cases of systematic evasion or fraud. Employers deliberately misclassifying workers to avoid contributions or falsifying payment records face potential prosecution beyond civil penalties.

Impact on Foreign Workers

For companies employing foreign workers, social security compliance affects work authorization renewals. Authorities reviewing foreign worker permits examine overall compliance records, including social security standing.

Persistent social security violations may lead to denial of foreign worker permit renewals. Immigration authorities view social security delinquency as evidence of poor overall compliance culture.

The social security system balances worker protection through mandatory coverage with administrative feasibility through relatively simple percentage-based contributions. For employers, the key is establishing robust systems that track covered remuneration accurately, register workers promptly, update status changes timely, and remit contributions within the monthly payment window. For foreign workers, understanding exemption possibilities prevents unnecessary double contributions while ensuring proper documentation protects the exemption.