As a business owner, you’re familiar with payroll processes, including wage calculations, taxes, and deductions. When you take your company abroad, you’ll confront a new set of laws. Globalization Partners will help you navigate them as your Employer of Record.
Taxation Rules in South Sudan
Calculating wages is one step of the payroll process, and deducting taxes is another. As an employer, you’re responsible for deducting income taxes from your employees’ paychecks. South Sudan’s progressive income tax system determines five brackets of taxable income. They are as follows:
- 0 percent for up to SSP 2,000
- 5 percent for SSP 2,001 to 5,000
- 10 percent for SSP 5,001 to 10,000
- 15 percent for SSP 10,001 to 15,000
- 20 percent for SSP 15,0001 and above
Pension schemes are not compulsory, but they are a common deduction for employees in the country. Workers can have up to 8 percent in pension deductions from their paycheck paid to a government-recognized retirement scheme.
You’re required to provide a payslip to every employee after providing wages, and these income tax and pension deductions should be included.
South Sudan Payroll Options for Companies
When you take your business to a new country, you have a variety of options for managing payroll. Common methods include:
- Internal department: If you have a subsidiary in the country, you can establish an internal payroll department. With this system, you’ll have control over your payroll processes. Keep in mind that you’ll liable for mistakes, and know that it takes a lot of company resources to create a subsidiary.
- Payroll processing company: A processing company will offer payroll expertise for complicated processes. If they make a mistake, though, your company is still liable.
- Remote management: Using your accounting team at home for international payroll is a form of remote management. While this arrangement doesn’t require extensive resources, your team will need to understand unfamiliar laws and keep processes separate to sidestep liability issues.
- Globalization Partners: As your Employer of Record, we’ll put your employees on our payroll. We’ll handle all the associated processes, and you’ll receive a monthly invoice for the funds. Our team will take on all the compliance risks, too.
How to Set Up a Payroll in South Sudan
Payroll setup depends on the option you choose. If you want to establish an internal department, you’ll need to incorporate a company in South Sudan. This process requires various confirmations and documentation from the government. Creating an entity can take several weeks, and you should also factor in the time it takes to hire a payroll team.
Whether your payroll is remote, internal, or through a third party, you’ll need to register with the country’s tax authority and collect your employee’s taxpayer IDs. These identification numbers allow you to deduct taxes from paychecks and send them to the revenue department.
Employers and employees can initiate the termination of a contract with appropriate notice, but severance pay is only relevant in specific circumstances. An employer needs to provide severance pay in the following circumstances:
- The employee is unfairly dismissed.
- The employee dies while performing service.
- The employee terminates the contract due to physical incapacity.
- The contract terminates due to insolvency or the death of the employer.
The employer determines severance payment in collaboration with the employee and their trade union. Workers are also entitled to a gratuity payment upon termination. These payments are as follows:
- One to 10 years of service: One month of gross salary for every year worked
- More than 10 years of service: One and a half months’ gross salary for every year
- More than 15 years of service: One and three-quarter months’ gross salary for every year
Employees may also trade unused vacation days for wages upon termination.
Payroll Processing Company in South Sudan
When you’re ready to expand, Globalization Partners can help you manage international payroll and mitigate risk. Get in touch with us today to learn more.