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Global Expansion Guide

Timor-Leste

Manage and pay your employees easily with BIPO in Timor-Leste and 170+ other markets. Build your international teams today with our global Employer of Record service!

employment guide_currency

Currency

United States Dollar (USD)
employment guide_language

Language

Tetum, Portuguese
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Capital

Dili

Employer of Record Timor-Leste

Employment Contract

Statutory Contributions

Minimum Wage

Public Holidays

Working Hours

Leave

Termination and Compensation

BIPO as your Employer of Record

Benefits of BIPO EOR Service in Timor-Leste

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Employer of Record Timor-Leste

Embark on your business expansion in Timor-Leste with BIPO’s Employer of Record (EOR) services. Designed to assist you in navigating the intricacies of local employment laws and regulations, we can help ensure a smooth transition for your business and workforce.

As an Employer of Record (EOR), we act as your legal employment entity, streamlining the process of business expansion. Allowing businesses to focus on their core business operations while the EOR manages all aspects of compliance, payroll, HR, and employee benefits when venturing into the Timorese market. An EOR provider addresses the common challenges associated with local employment laws, payroll regulations, and work permit requirements.

This guide was last updated on 8 May 2026. The content in this guide is current as of this date and based on common business practices.

Employment Contract

Employment contracts in Timor-Leste may be structured as either fixed-term or open-ended agreements. Fixed-term contracts must be made in writing; otherwise, they will be deemed open-ended contracts. Such contracts may be renewed through mutual written agreement, provided that the total duration does not exceed 3 years.

Employment contracts should include, at a minimum, the following information:

  • Identification details of both the employer and employee;
  • Employee’s job title, position, and duties;
  • Place of work;
  • Normal working hours and rest periods;
  • Wage amount, payment method, and payment frequency;
  • Employee’s occupational category;
  • Date of contract execution and commencement date, where different;
  • Probationary period, if applicable;
  • Contract duration and justification for the use of a fixed-term arrangement; and
  • Applicable collective agreement, if any.

Statutory Contributions

Scope of Application: Applicable to employees of private enterprises.

Social Security Type Wage Ceiling Employee Contribution Employer Contribution

Unified System

(Includes sickness, maternity, work injury, pension, disability, survivor benefits)

Actual wage

(Basic wage, 13th-month pay, performance bous, night/shift/remote allowance, special occupation allowance, other allowances, compensation for unfair dismissal)

 4% 6%

Minimum Wage

The statutory minimum wage for private sector employees in Timor-Leste is USD 115 per month, effective since June 2012.

Public Holidays

The public holidays listed below are national public holidays observed across Timor-Leste. Please refer to official government announcements for the latest updates.

  • New Year’s Day
  • Veterans Day
  • Idul Fitri
  • Holy Friday
  • World Labour Day
  • Restoration of Independence Day
  • Idul Adha
  • Corpus Christi
  • Popular Consultation Day
  • All Saints’ Day
  • All Souls’ Day
  • National Women’s Day
  • National Youth Day
  • Proclamation of Independence Day
  • Memorial Day
  • Day of Our Lady of Immaculate Conception and Timor-Leste Patroness
  • Christmas Day
  • National Heroes Day

Notes

  • There is no statutory requirement to provide a substitute rest day where a public holiday falls on an employee’s scheduled rest day.
  • Overtime limit: Overtime work must not exceed 8 hours per day.
  • Overtime compensation: Employees are entitled to an additional 100% of their regular hourly wage for overtime work performed.
  • Exemptions from overtime compensation: The same exemptions applicable to working hours and overtime provisions above shall apply.

Working Hours

Normal Working Hours

Daily Weekly
8 hours 44 hours

Work Breaks

Employees are entitled to a 1-hour break after 5 consecutive hours of work.

Weekly Rest

Employees are generally entitled to 1 rest day per week, typically observed on Sunday.

Overtime Limits

  • Work performed on a weekly rest day must not exceed 8 hours per day;
  • Overtime work must not exceed 4 hours per day and 16 hours per week.

Overtime Compensation

  • Overtime on regular working days: Additional compensation of 50% of the employee’s regular hourly wage;
  • Work on weekly rest days: Additional compensation of 100% of the employee’s regular hourly wage.

Exemptions from Overtime Compensation

Exemptions from overtime provisions may apply in the following circumstances:

  • Force majeure events; or
  • Work required to prevent or repair serious damage to the enterprise or to maintain continuity of business operations.

Leave

Annual Leave

  • Eligibility and entitlement:

    • 12 days after 1 full year of service; or
    • 1 day per month for employees with less than 1 year of service
  • Pay: Full salary paid by the employer during annual leave
  • Encashment: Any unused annual leave must be fully compensated upon termination of employment

Sick Leave (Authorised Absence)

  • Eligibility: Medical certificate required
  • Entitlement: 12 days per year

  • Pay:

    • First 6 days: Full pay
    • Next 6 days: Half pay
  • Payment responsibility: Paid by the employer

Maternity Leave

  • Eligibility: Female employees
  • Entitlement: 12 weeks, with at least 10 weeks to be taken after childbirth
  • Pay: Full salary paid by the employer

Other Leave Types

  • Authorised absence: 3 days of paid leave per year for marriage, bereavement, community, or religious activities
  • Miscarriage leave: 4 weeks of paid leave for female employees following a miscarriage
  • Paternity leave: 5 days of paid leave for male employees upon childbirth
  • Prenatal check-up leave: Paid leave for pregnant employees for necessary medical examinations, as required
  • Nursing breaks: 1 hour per session, 2 sessions per day, with pay, for female employees with children under 6 months old
  • Parental leave: Unpaid leave for employees with children under 10 years old to care for sick or injured children, subject to medical certification

Termination and Compensation

Notice Period

  • Resignation by employee:

    • Without just cause: 30 days’ written notice or payment in lieu of notice
    • With just cause: Immediate termination

  • Termination by employer:

    • With just cause: Immediate termination

    • Redundancy due to economic, technical, or structural reasons:

      • Service ≤ 2 years: 15 days’ written notice or payment in lieu
      • Service > 2 years: 30 days’ written notice or payment in lieu

Compensation

  • In cases of unlawful dismissal by the employer, reinstatement with back pay is generally preferred. Where reinstatement is not possible:

    • 1–6 months of service: 0.5 month’s wage
    • 6 months–1 year: 1 month’s wage
    • 1–2 years: 2 months’ wage
    • 2–3 years: 3 months’ wage
    • 3–4 years: 4 months’ wage
    • 4–5 years: 5 months’ wage
    • 5 years and above: 6 months’ wage
  • Where an employee resigns with just cause (e.g., due to employer breach or abuse), compensation is payable at double the above severance amounts.
  • Service allowance: Regardless of the mode of termination, employees are entitled to a service allowance equivalent to 1 month’s wage for every 5 completed years of service.

BIPO as your Employer of Record

BIPO’s total HR solutions include our award-winning HR Management System, Global Payroll Outsourcing, Employer of Record service, and Athena BI.

As your EOR partner, our services are designed to provide a comprehensive, hassle-free experience:

  • Initial Consultation:
    The journey typically begins with an in-depth discussion to understand your specific business needs, ensuring our EOR services perfectly align with your objectives.
  • Payroll Management:
    We offer a streamlined payroll system that ensures timely and accurate salary disbursement, complete with statutory deductions and contributions in full compliance with Timorese regulations.
  • Contributions and Taxes:
    Our expertise in managing local social security requirements ensures your business complies with in-country financial obligations.
  • Compliance with Minimum Wage and Working Hours:
    We guarantee that your employment practices adhere to the Timorese minimum wage and working hours standards, safeguarding your business against potential legal issues.
  • Leave and Paid Time Off Management:
    Implement and manage leave policies that comply with Timor-Leste’s laws, ensuring a fair and transparent leave management system for your employees.
  • Regulatory Compliance:
    Stay ahead of local labour laws and regulations with our up-to-date compliance services, minimising legal risks for your business.
  • Other services:
    Work visa, permit applications, termination procedures.

Services may vary across countries.

Benefits of BIPO Employer of Record Service in Timor-Leste

Unlock your growth potential with BIPO’s Employer of Record service in Timor-Leste. Our EOR service empowers businesses with seamless scalability while ensuring regulatory compliance.

From smooth onboarding to risk mitigation, BIPO handles the administrative HR tasks, enabling companies to concentrate on core business functions and accelerating growth. Our local expertise and global reach ensure efficient operations, enhancing flexibility and reducing operational complexities.

Stay up to date with the latest employment regulations.

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Frequently Asked Questions

An Employer of Record (EOR) is a partner company that acts as the official employer for your employees.

An EOR company handles all the HR aspects and processes, including the legal complexities associated with regulatory and tax compliance.

As your EOR, BIPO supports your organisation by providing a comprehensive range of HR, payroll and advisory services to ensure your business stays compliant. These include end-to-end on/offboarding services for your employees (e.g.: payroll processing, HR and benefits administration, labour contracts, visa applications, payroll/tax compliance, and more).

By engaging BIPO as your EOR, your business benefits from:

  • Compliance in the global markets where you operate
  • Reduced costs and risk mitigation
  • Overall workforce productivity, effectiveness, and efficiencies

A global EOR benefits organisations regardless of size or industry. It is especially useful for organisations that want to:

  • Scale their global business and be fully operational in foreign markets quickly
  • Reduce financial and HR complexities while expanding internationally
  • Minimise time spent trying to understand local labour laws and foreign tax systems
  • Stay compliant across global markets while reducing HR and administrative workflows
  • Benefit from a centralised and intuitive cloud HR platform to manage international teams

A global EOR enables businesses to fast-track their market entry into international market, and reduce the complexities of setting up multiple foreign entities.

When you partner with BIPO, we take on the the day-to-day administrative tasks, while you maintain full control of the business and delegate HR workflows and hiring needs.

Our vast network of business partners across 170+ markets globally supports your business expansion plans, with in-country HR experts providing localised support. Going global has never been easier!

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