As one of the most densely populated countries in Africa, Rwanda has plenty of talent and natural resources that make it an attractive location for an expansion. However, growing companies have to consider important factors such as how to set up a Rwanda payroll, hire employees, and stay compliant.
G-P offers a solution. As the Employer of Record (EOR), we’ll handle compliance matters and streamline payroll, so you can begin operations in a fraction of the time, without setting up new entities.
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:
- Internal: You can run an internal payroll if you have an in-country subsidiary. Usually, this setup works best for larger companies that are committed to operating in Rwanda long term.
- 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 held accountable for compliant matters.
- G-P: The easiest way to run payroll in Rwanda and stay compliant is partnering with an Employer of Record (EOR) like G-P. With us, you can rest assured that all employees will be paid on time, freeing you to focus on other important aspects of your business.
How to set up a payroll in Rwanda
Before you set up your Rwanda payroll, you have to prepare to establish a subsidiary in the country. However, the incorporation process can take weeks or months, depending on the type of entity you choose and location.
However, G-P offers an alternative. We can help you start working in a few days through our Employer of Record model. We’ll also manage compliance, so you don’t have to worry about the stress of meeting Rwanda’s employment laws.
Entitlement/termination terms
Terminating an employment contract can be difficult in any country, 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 completing 1 year of work. Severance pay also depends on how long the employee has worked for the company.
Streamline global payroll management with G-P.
G-P streamlines each step of the payroll management process with our market-leading Global Growth Platform™. Pay your team with confidence anywhere in the world in 150 currencies with our 99% on-time automated payroll system — all with just a few clicks. Our products also integrate with leading HCM solutions, syncing employee payroll data across platforms automatically to create one reliable, convenient source of truth for HR teams.
Contact us to learn more about how we can support you.