How is income tax calculated in Lesotho?
Lesotho uses two rates: chargeable income up to M6,480 a month is taxed at 20%, and the excess at 30%. The calculator uses the monthly amounts multiplied by 12.
Every employee gets a non-refundable tax credit of M1,020 a month (M12,240 a year) off the tax, so someone earning M5,100 a month or less pays no tax.
Contributions to an approved pension or retirement annuity fund are allowable deductions, but no compulsory employee social security contribution is modelled.
What is the income tax rate in Lesotho?
| Taxable income | Rate |
|---|---|
| LSL 0 – LSL 77,760 | 20% |
| Over LSL 77,760 | 30% |
What mandatory salary deductions apply?
- No compulsory employee contributions were found for a regular employee.
Gross salary and take-home salary
Gross salary is what your contract says before anything is taken off. Take-home salary is what reaches your bank account after income tax and the compulsory employee contributions. Employer contributions are paid on top of your salary and are not taken from it.
Example: LSL 49,000.00 a month
An employee earning 49,000 a month, about US$3,000.
| Item | Monthly | Annual |
|---|---|---|
| Gross salary | LSL 49,000.00 | LSL 588,000.00 |
| Income tax | LSL 13,032.00 | LSL 156,384.00 |
| Compulsory contributions | LSL 0.00 | LSL 0.00 |
| Take-home pay | LSL 35,968.00 | LSL 431,616.00 |
Effective income tax rate 26.6%; all deductions 26.6%.
Frequently asked questions
How much salary is tax-free in Lesotho?
Employees earning M5,100 a month or less pay no tax, because the M1,020 tax credit cancels the 20% tax.
What are the tax rates?
20% on chargeable income up to M6,480 a month and 30% on the excess.
Is the tax credit refundable?
No. It can reduce tax to nil but is not paid out.
Official sources
- Revenue Services Lesotho: Guide on Taxation of Employment Income 26-27. Read 5 November 2026.
Last reviewed 5 November 2026. An estimate for planning, not tax advice; your employer’s payroll and the tax authority decide what is actually withheld.
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