Employer of record in Rwanda

PAID TIME OFF

• Annual Vacation: Employees are entitled to 18 days of paid vacation annually. After three years of continuous service, an additional day of leave is granted, up to a maximum of 21 days.
• Sick Leave: Employees may take up to six months of sick leave with medical verification. The first three months are paid, while the remaining three months are unpaid.
• Maternity Leave: Female employees are entitled to 12 weeks of paid maternity leave, which may be taken up to two weeks before the expected due date.
• Paternity Leave: Fathers are granted four days of paternity leave, which can be either paid or unpaid depending on the employer’s policy.
• Family Leave: There is currently no paid family leave policy in place.
• National Holidays: Rwanda observes 14 public holidays, all of which are paid.
• Other Paid Time Off: Not applicable.

STATUTORY EMPLOYEE BENEFITS

• Unemployment: Unemployment benefits are not covered by the law in Rwanda.
• Workers Compensation: Rwanda’s first law on workers’ compensation was passed in 1949. The current legislation includes provisions from 1974 and 2003. The social security system covers work-related accidents and occupational diseases.
• Coverage: Employees are covered, but self-employed individuals are excluded. Employers must contribute 2% of the gross monthly payroll.
• Conditions of Eligibility: All paid employees in Rwanda, whether residents or foreigners, are required to contribute to the Rwanda Social Security Fund (CSR). The company contributes 5%, and the employee contributes 3% based on the employee’s gross wage. Contributions are deducted monthly and remitted quarterly.
• Retirement Benefits: The pension system supports workers who are elderly, incapacitated, or deceased. Employees and their families receive benefits. All salaried employees, including political figures, must contribute 3% each, matched by the employer. Voluntary contributions are also allowed for individuals under 45 years old, with a contribution rate of 6%.
• Health Benefits: All citizens have access to free healthcare in public hospitals. Private health insurance is also available on a voluntary basis, with coverage varying by employer.

PRIVATE EMPLOYEE BENEFITS

• Workers Compensation: Private workers’ compensation is not available in Rwanda.
• Retirement: There are private retirement schemes, such as the BNR Complementary Occupational Pension Scheme and Axis Pensions Ltd.
• Health: Private health insurance is available from companies like SORAS, CORAR, and AAR.
• Insurance: Private life insurance is offered by various providers.

PERSONAL INCOME TAX

• Tax Year: The tax year runs from January 1st to December 31st.
• Taxable Income: Residents are taxed on both domestic and international income, while non-residents are taxed only on income earned in Rwanda.

Tax Rates:

• Taxation Method: Pay-As-You-Earn (PAYE) tax is withheld by employers and paid to the Rwanda Revenue Authority (RRA) within 15 days after the month in which the income is earned.
• Double Taxation: Rwanda has agreements to avoid double taxation with various countries.
• Payroll Calendars: Payroll can be processed weekly, biweekly, fortnightly, or monthly.
• Health Insurance: Health insurance is mandatory, with contributions totaling 15% of an employee’s wage, shared equally between the employer and employee.

SOCIAL SECURITY

• Contributions: Both residents and foreigners must contribute to the Rwanda Social Security Fund (CSR). The employer contributes 5%, and the employee contributes 3% of the gross wage.
• Retirement Contributions: Employees are required to contribute to the pension system, with the total contribution rate of 6% split between the employer and employee.

PAYROLL ELEMENTS

• Income: Includes salary, earnings, bonuses, overtime pay, taxable benefits, allowances, and other lump-sum perks.
• Bonuses: Bonuses are included in monthly income and are subject to tax as determined by the relevant authority.
• Allowances: Allowances such as sick pay, housing, and travel expenses may be provided but are not mandated by law.
• Benefits in Kind: Certain benefits provided by employers, such as housing or vehicle benefits, are taxable.

TAXABLE INCOME AND DEDUCTIONS

• Income Types: Taxable income includes employment income, business profits, and investment income. Certain business expenses, such as travel and vehicle costs, may be deducted.
• Capital Gains Tax: Capital gains from the sale of shares or immovable property are taxed at 5% for shares and 30% for commercial property.
• Dividends Tax: Dividends are taxed at 15%, with possible reductions under double taxation agreements.

PAYROLL TAXES AND EMPLOYER CONTRIBUTIONS

• Employer Contributions: Employers must contribute to the Rwanda Social Security Fund (CSR), as well as make payments toward health insurance (RSSB), amounting to 15% of the employee’s base wage.
• Workers Compensation: Employers must allocate 2% of the gross monthly payroll toward workers’ compensation.
• Unemployment: Rwanda does not provide unemployment insurance or benefits.

ADMINISTRATION

• Income Tax: All taxable income from employment, business, and investments is subject to tax. Individuals must file an annual tax return by March 31st of the following tax year.
• Payroll Taxes: Employers must deduct and remit social security and health insurance contributions on a monthly basis.
• Employer Obligations: Employers must ensure compliance with contributions for social security, health insurance, and workers’ compensation.