Employer of record in Cameroon
Cameroon, located in Central Africa, is a country of immense cultural and geographical diversity, often referred to as “Africa in miniature” due to its wide range of climates, languages, and ecosystems. It is home to a mix of tropical rainforests, savannahs, and coastal regions, and is rich in natural resources like oil, minerals, and agricultural products. The nation’s vibrant culture is reflected in its numerous ethnic groups, languages, and traditions, making it a unique and dynamic country with both economic potential and rich historical heritage.
Employee Benefits
Paid Time Off
Annual Vacation: Employees are entitled to 1.5 days of annual leave per month of service, accumulating to 18 working days of leave per year. Workers under the age of 18 are granted 2.5 days per month, totaling 30 working days of annual leave. Mothers receive an additional two days of leave for each child under six years old, or one day if their total leave is less than six days. Furthermore, employees receive two additional days of leave for every five years of continuous service.
The above provisions represent the minimum legal standards; employers and employees may agree to longer paid leave periods through individual or collective agreements.
Sick Leave: Employees are generally entitled to a minimum of five days of paid sick leave annually. If an employee sustains a work-related injury or illness, the employer is responsible for covering medical expenses.
Maternity Leave: Female employees are entitled to 14 weeks of maternity leave, starting four weeks before the expected delivery, with compensation provided by social security (CNPS). This period may be extended for six weeks in case of medical emergencies. The leave is paid at the employee’s usual rate of pay by social security. Additionally, for up to 15 months after childbirth, mothers are entitled to up to one hour of breastfeeding breaks each day.
Paternity Leave: Fathers can take up to 10 days of paid family leave.
Family Leave: Employees are usually entitled to 10 days of paid leave for family-related matters. Mothers with children under six years of age may receive additional leave: two days per child living at home, or one day if their total leave does not exceed six days.
National Holidays: Cameroon observes 10 paid public holidays each year.
Other Paid Leave: No additional categories of paid leave are specified.
Statutory Employee Benefits
Unemployment Benefits: Aside from severance pay provided by the employer, there are no dedicated unemployment funds.
Workers’ Compensation: Employees are covered for work-related accidents and occupational diseases under the social security contributions.
Social Security Contributions: Both employees and employers contribute to the National Social Insurance Fund (NSIF), with contributions being withheld by the employer. The fund covers several benefits:
- Old-age, Disability, and Survivors’ Pensions: The total contribution rate is 8.4%, split equally between the employer and employee (4.2% each).
- Family Benefits: The employer is fully responsible for a 7% contribution.
Work Accident and Occupational Disease Benefits:
The employer covers this entirely, with rates based on the job’s risk level:
- Low risk: 1.75% of salary
- Medium risk: 2.50% of salary
- High risk: 5% of salary
Additional mandatory contributions include:
- Housing Fund: Employee: 1% of taxable salary; Employer: 1.5% of taxable salary
- National Employment Fund (FNE): Employer: 1% of taxable salary
- Cameroon Radio and Television (CRTV) Royalty: Based on the individual’s salary, up to XAF 13,000 for a gross salary of XAF 1 million
- Council Tax (TDL): Applicable to salaries over XAF 500,000, with a tax amount of XAF 2,520 per month.
Retirement and Health Insurance:
- Employees are covered for retirement, disability, and death benefits through the old-age pension branch of the social security system.
- Medical aid is optional, either as a private choice or offered by the employer. Social security does provide some health benefits, such as coverage for pregnancy and childbirth-related medical expenses.
Private Employee Benefits:
- Workers’ Compensation: Private workers’ compensation is available.
- Retirement and Health Insurance: Private retirement/pension schemes and health insurance options are available.
Personal Income Tax
Tax Year: The tax year runs from January 1st to December 31st.
Taxation Method: Cameroon follows a progressive tax system with rates ranging from 11% to 38.5%. Additionally, a 10% council tax is added to the calculated PIT.
Income Tax Brackets:
- Up to 2,000,000 XAF: 11%
- 2,000,001 to 3,000,000 XAF: 16.5%
- 3,000,001 to 5,000,000 XAF: 27.5%
- Over 5,000,000 XAF: 38.5%
Rebates & Tax Credits: Taxpayers receive an annual deduction of XAF 500,000 for wages and salaries. No other significant tax credits are available.
Payroll Elements
Income: Includes salary, bonuses, overtime, taxable benefits, and allowances.
Bonuses: Bonus payments are commonly included in employment contracts but are not legally required.
Allowances: A variety of allowances, such as family allowances, benefits from state authorities, and compensation for temporary duties, are tax-free.
Benefits in Kind: These are valued based on their actual cost or a percentage of their value. For example:
- Housing: 15%
- Electricity: 4%
- Water: 2%
- Food: 10%
- Telephone: 5%
Taxable Income & Deductions
PIT applies to income from wages, salaries, pensions, and other forms of income. Deductions include allowable business expenses (up to 30% of taxable salary) and social contributions.
Payroll Taxes and Employer Contributions:
Employers are responsible for withholding income taxes from employees’ wages and submitting them to the tax authorities by the 15th of each month.
Administrative Responsibilities
Employers must file monthly pay-as-you-earn (PAYE) returns within 15 days of the month’s end. They are also required to submit annual income tax returns by March 15th of the following year.
