Your quick guide on talent and labor compliance norms in Palau
Capital
Ngerulmud
Currency
United States Dollar (USD)
Languages
Palauan, English
Payroll Frequency
Fortnightly
GDP per Capita
$11,806.89
Employer Tax
9.5%
Talent Overview
Palau is an island country located in the Pacific whose main economic activity is agriculture and fishing. However, their government has employed most of its working population and has provided them with ample opportunities through the help of the United States of America. Plans of bolstering the country’s tourism are also being worked as an additional stream of income for Palau.
Major economic hubs:
Koror, Melekeok, Ngermid
Skills in demand:
Teachers, Fishermen, Administrative positions, Construction
Local Universities
The top local university in Palau are:
Salary Data
The below table mentions some jobs in Palau with average monthly salary:
| Job Title | Average Monthly Salary(in USD) |
| Accounting and Finance | 2,810 |
| Software Engineer | 2,540 |
| Financial Analyst | 3,380 |
| Graphic Designer | 1,610 |
| Project Manager | 3,120 |
| Sales Manager | 4,420 |
| Customer Service Representative | 980 |
Talent Sourcing Tips
The following sections will be covering the basic information that employers need to know when employing local employees in the country. The following are taken from the country’s rules and regulations of employment.
Employee Contracts in Palau contain the terms and conditions of employment and the employee’s vital information and obligations. It is written in the English language.
Probation period for Palauan employees should not exceed 6 months
| Date | Name | Type |
| 1 Jan | New Year’s Day | Public Holiday |
| 2 Jan | Day off for New Year’s Day | Public Holiday |
| 15 Mar | Youth Day | Public Holiday |
| 5 May | Senior Citizens Day | Public Holiday |
| 1 Jun | President’s Day | Public Holiday |
| 9 Jul | Constitution Day | Public Holiday |
| 10 Jul | Day off for Constitution Day | Public Holiday |
| 4 Sep | Labor Day | Public Holiday |
| 1 Oct | Independence Day | Public Holiday |
| 2 Oct | Day off for Independence Day | Public Holiday |
| 24 Oct | United Nations Day | Public Holiday |
| 23 Nov | Thanksgiving | Public Holiday |
| 24 Nov | Family Day | Public Holiday |
| 25 Dec | Christmas Day | Public Holiday |
| Type of Leave | Time Period | Mandatory |
| Annual Leave | Maximum 30 days | Yes |
| Sick Leave | Maximum 30 days | Yes |
| Maternity Leave | 5 months | Yes |
Payroll
Payroll Cycle
Salaries in Palau are released every two weeks.
Minimum Wage
The minimum wage in Palau is USD 3 per hour
Overtime Pay
Overtime pay rate will be based on the agreement between employer and employee, as it will be indicated in the employment contract.
Bonus
A 13th month pay is not a requirement in Palau
Below are some of the benefits that Palauan employees are entitled to:
Taxes
| Type of Contribution | Tax Rate |
| Social Security Insurance | 7% |
| Healthcare Financing | 2.5% |
| Type of Contribution | Tax Rate |
| Social Security Insurance | 7% |
| Healthcare Financing | 2.5% |
| Income Bracket | Tax Rate |
| $0-$8,000 | 6% |
| $8,001 – $40,000 | 10% |
| $40,001 and higher | 12% |
Palau has replaced their VAT system with Goods and Services Tax starting January 2023. The rate for PGST will be 10%.
Offboarding & Termination
Termination of employment contract in Palau may occur in the following circumstances:
A Notice period of 60 days will be observed for terminated employees in Palau.
Terminated employees in Palau will be given their final pay as their final compensation. Employers must deduct any debts or salary advances when calculating the severance pay.
Visa and Immigration
Foreign employees must secure a work visa to stay in Palau for work. They will have the option to apply for the following visas base on their nature of work:
