Rwanda is a small country in the central part of Africa with both savanna regions and mountains. As one of the most densely populated countries in Africa, the country has plenty of human capital and natural resources that make it an attractive location for an expansion. However, you also have to consider important factors such as how to set up your Rwanda payroll, hire employees, and stay compliant.
G-P offers Rwanda payroll outsourcing to companies looking to expand into the country quickly. We can act as the Employer of Record to handle all compliance and set up your Rwanda payroll per local labor laws. When you work with us, we’ll lift all compliance management matters off your shoulders and onto our own.
Taxation Rules in Rwanda
Both employers and employees must pay taxes to certain funds at varying rates. Employers and employees must contribute 5% and 3% of gross salaries to the national pension fund respectively. Both contribute 0.3% to the Mother’s Insurance Fund. Employers must also make a contribution of 2% to an occupational hazards fund. Rwanda uses a Pay As You Earn (PAYE) system that means employees owe personal income taxes throughout the year.
Rwanda Payroll Options for Companies
You can choose the Rwanda payroll option that makes the most sense for your company, including:
- Remote: Assuming your parent company already operates its own payroll, you can add your subsidiary’s employees to that same payroll and compensate them remotely. However, both sets of employees will have different regulations and tax considerations.
- Internal: You can also choose to run internal payroll out of your subsidiary if you have more staff and resources. Usually, this setup works best for larger subsidiaries that are committed to operating in Rwanda.
- Rwanda payroll processing company: Companies looking to outsource can work with a local Rwanda payroll processing company that will take care of setting up payroll. If you choose this option, you’ll still be the one held compliant.
- Rwanda payroll outsourcing: Finally, you can work with G-P for Rwanda payroll outsourcing. We’ll hire employees on your behalf, add them to our existing payroll, and handle all compliance for you.
How to Set Up a Payroll in Rwanda
Before you get ready to set up your Rwanda payroll, you have to prepare to set up a subsidiary in the country. However, the incorporation process can take weeks or months, depending on your entity and location. G-P will help you start working in a few days through Rwanda payroll outsourcing. As the Employer of Record, we’ll also be responsible for compliance, so you don’t have to worry about the stress of meeting Rwanda’s employment compliance laws.
Terminating an employment contract can be difficult in foreign countries, which is why we recommend outlining entitlement and termination terms before setting up your Rwanda payroll. Employees should get notice of dismissal depending on their length of service, and they’re generally entitled to severance pay after at least one year of work. Severance pay also depends on how long the employee has worked for the company.
Payroll Processing Company in Rwanda
G-P can help make a difference in your expansion. Contact us today to learn more about Rwanda payroll outsourcing.