Contractor or Employee? Botswana Now Presumes

Two separate systems decide what your working arrangement actually is in Botswana, and they do not use the same test. One asks whether you are an employee. The other asks where the work happened. You can be a contractor for one and a taxpayer here for the other.

The employment side: a presumption that flips the burden

Section 151 of the Employment and Labour Relations Act, in force since 1 September 2026, presumes that a person who works for or renders a service to another is a worker, unless that other party is shown to be a client or customer of a business genuinely carried on by the individual. The presumption applies regardless of the form of the contract or the label used in it.

It triggers on facts. Practitioners writing on the Act list them as: control or direction over the manner of work; hours determined by the other party; integration into the organisation; working an average of at least 40 hours a month over three months or more; economic dependency; tools of trade provided; and working for only one entity.

The consequential part is procedural. Once one or more of those is present, the burden shifts to the employer to prove independent-contractor status. That is a meaningful change for anyone who has been on a consultancy agreement for years while sitting in the same team, on the same hours, with the same laptop, as the permanent staff.

Why 40 hours a month is the number to remember

Forty hours a month is ten hours a week. It is a low bar, and it is deliberately low. A long-running part-time arrangement with a single client can satisfy it comfortably.

If you genuinely run a business with several clients, set your own hours and use your own equipment, the presumption is rebuttable and you are what your contract says. If you have one client who directs your day, the paperwork is no longer the deciding fact.

The tax side, which catches remote workers

Botswana taxes on source. Income is taxable here if its source is here, and under section 11(b) of the Income Tax Act, any payment for services rendered or work done in Botswana is deemed to accrue locally.

Read that carefully if you work remotely for a company abroad. The payer’s location is not the test. The work is done in Botswana, so the income has a Botswana source, and it is taxable here. Your foreign employer will not be operating PAYE, which means the registration, the filing and the payment are all yours to do.

• Resident bands currently run 0% to P48,000, then 5%, 12.5%, 18.75% and 25% from P156,000
• A new top band of 27.5% applies above P400,000 a year, about P33,333 a month, effective 1 July 2026
• The tax year runs 1 July to 30 June, and individual returns are due three months after year end, by 30 September
• Late payment carries interest of 2% a month
• VAT registration becomes compulsory at P1 million of taxable turnover in any twelve months, and individual consultants are not exempt

One caution on a threshold that may be stale: the revenue service’s own pages still state that registration is required once taxable income exceeds P36,000, while the first tax band now begins at P48,000, and new Income Tax and Tax Administration Acts took effect on 1 July 2026. We could not confirm whether the registration threshold moved with them. Check it with the revenue service rather than relying on either figure.

How the two tests interact

They can disagree, and that is not a contradiction. You might be presumed a worker under the labour statute while remaining responsible for your own tax because no local employer is withholding it. The practical consequences differ: the labour presumption is about notice, leave and unfair dismissal; the tax rule is about who files.

If you are being paid from abroad, the mechanics of actually receiving the money are a third question again, covered in getting paid from abroad. And the wider conditions you are negotiating inside are set by the new labour law.

One reason to care about which side of the line you are on: the official count of jobs carrying no labour-law protection, no taxation and no benefits is 257,289 people, 34.1% of everyone in work. The two ways Botswana measures that are in informal work in Botswana.