Why hire in Timor-Leste through an EOR
Genuinely simple — and priced in dollars
Timor-Leste keeps its employer costs refreshingly straightforward: a flat 6% employer social security contribution, a flat 10% income tax with no progressive bands, and the US dollar as the official currency, so there's no exchange-rate complexity to budget for. We recently placed an 11-employee team here for a client — a small, specific market where local knowledge genuinely matters.
No entity required
Employ staff in Timor-Leste without registering a company or filing your own INSS social security contributions.
Priced in US dollars
Timor-Leste's official currency is the US dollar — no exchange-rate risk to factor into your budgeting.
Foreign-worker exemptions handled
Foreign employees already covered by a home-country social security scheme can be exempt here for up to 10 years — we check this for every hire.
Independent advice
We factor in the foreign-exemption years correctly for the specific hire — a real, time-limited saving worth tracking properly.
Deal directly, if you'd rather
Real recent experience — an 11-person team
Timor-Leste is a genuinely small, specific market, and we've placed a real team here — 11 employees for a single client, handled directly by us. If you'd rather talk through your specific situation before committing, get in touch and we'll walk you through exactly what a Timor-Leste hire involves.
Ask about a Timor-Leste hire →Employer costs at a glance
Timor-Leste's headline numbers
Employer costs explained
Why Timor-Leste is genuinely simple to budget for
Social security — a flat 6%, split 6/4 with the employee
Timor-Leste's social security system, run through INSS, applies a combined 10% contribution rate — 6% from the employer, 4% from the employee — covering pensions, sickness, maternity, unemployment, and occupational accident cover. There's no salary banding or complex tiering to work through, just one flat rate applied to earnings.
Small-employer relief
Private-sector employers with 10 or fewer workers, where at least 60% are Timorese nationals, are entitled to a reduced contributory rate — a genuine incentive for smaller foreign employers building a local team rather than a single specialist hire.
The 10-year foreign-worker exemption
Foreign employees working temporarily in Timor-Leste are covered by the local social security scheme by default — unless they can demonstrate they're already contributing to a social security scheme in another country, in which case they're exempt for up to 10 years. This matters for any client posting an existing employee from elsewhere rather than hiring locally from scratch, and it's something we check for every placement.
Employment basics
What's standard for a Timor-Leste employment contract
Social security
6% employer / 4% employee
Flat rate, no bands — covers pensions, sickness, maternity, unemployment, and accident cover.
Income tax
10% flat, withheld at payroll
No progressive bands on resident wage income.
Annual leave
12 working days after 1 year
Plus 14 paid public holidays annually.
Maternity leave
12 weeks paid
Standard entitlement for female employees under the Labour Code.
Before you budget a Timor-Leste hire
Get our free spreadsheet of employer social charges across 150 countries and see how Timor-Leste compares.
Common questions
Hiring in Timor-Leste, answered
Is Timor-Leste's employer cost really just 6%?
Yes for social security specifically — it's a flat 6% employer contribution, one of the simpler systems we cover. Combined with the flat 10% income tax, budgeting a Timor-Leste hire is genuinely more straightforward than most countries on this list.
Does a foreign employee posted here need to pay into local social security?
Not necessarily — if they can show they're already covered by a social security scheme in their home country, they can be exempt from Timor-Leste's system for up to 10 years. We check this for every placement.
Do I need a Timor-Leste entity to hire someone there?
No — through an Employer of Record arrangement, we become the legal employer, handling INSS registration and payroll, while you keep full control of the person's day-to-day work.
Ready to talk about a Timor-Leste hire?
Tell us the role and we'll give you the real cost and the fastest compliant route — including if that's not us.
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