Employer of Record in Rwanda

Hiring in Rwanda for the first time can be overwhelming, especially when navigating unfamiliar employment laws. Whether you hire independent contractors, set up a legal entity, or use an EOR service, understanding the local employment landscape is crucial for success. Playroll’s comprehensive guide can help you get started if you're hiring locally or relocating a team member.

Companies can hire employees in Rwanda in the following three ways:

• Setting up a local entity. Entity establishment reduces risk exposure and enables direct hiring, but can be costly and time-consuming – making it less practical for companies seeking quick and flexible solutions for hiring in Rwanda.
• Partnering with an Employer Of Record. An EOR, like Playroll, is a third-party entity that serves as the legal employer of your international workforce which hires, pays, and manages compliance with Rwanda’s labor laws and tax regulations.
• Hiring independent contractors. Hiring contractors gives companies a flexible, affordable alternative to hiring local employees, though it involves unique misclassification risks.

Businesses can only operate smoothly in Rwanda if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Rwanda below, to avoid any compliance issues.

Employment Contract Requirements

Rwandan employees must receive a written employment contract in the local language, whether it's a fixed-term or indefinite-term agreement. Salaries and compensation must be in Rwandan Francs, not in foreign currency. The contract should include at least the following details:

• Compensation
• Benefits
• Termination requirements

Onboarding Process

We can help you get a new employee started in Rwanda quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations.

For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Rwanda

The official working hours in Rwanda are 8 hours for a 5-day workweek. This includes a flexible hour between 8 am and 9 am to accommodate remote work.

Overtime in Rwanda

Any work exceeding the standard weekly working hours in Rwanda is considered overtime and must be compensated accordingly. The regulations for overtime pay are typically outlined in a collective labour convention or agreement.

Probation Period in Rwanda

In Rwanda, probationary periods cannot exceed 6 months.

Fiscal Year in Rwanda

1 January - 31 December is the 12-month accounting period that businesses in Rwanda use for financial and tax reporting purposes.

Payroll Cycle in Rwanda

The payroll cycle in Rwanda is usually monthly, with employees being paid within 7 days of the end of wage period.

Minimum Wage in Rwanda

The minimum wage for employees in Rwanda is typically 12.50 RWF per hour, amounting to ~2,000 RWF per month for a typical 40 hour work week.

Bonus Payments in Rwanda

Rwanda does not have a statutory requirement for providing a 13th salary.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 12.8% on top of the employee salary in Rwanda.

Employee Payroll Tax Contributions

In Rwanda , the typical estimation for employee payroll contributions cost is around 11.3%.

Individual Income Tax Contributions

Income tax in Rwanda follows a progressive rate structure. The overall tax rates may be influenced by various factors, including household status and the number of children.

Pension in Rwanda

Rwanda's public pension scheme, the Caisse Sociale du Rwanda (CSR) or the National Social Security Fund (NSSF), is managed by a public agency. Both employers and employees, regardless of whether they work in the public or private sector, contribute to the NSSF.

Mandatory Leave Entitlement in Rwanda

The annual leave entitlement in Rwanda is 18 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Rwanda

Rwanda observes 13 mandatory national holidays, in addition to annual leave:

Paid Time Off in Rwanda

In Rwanda, employees are entitled to a minimum of 18 days of paid annual leave, with the provision for 24 days for employees under 18 years old. The employment contract and labour law stipulate that the number of leave days increases based on the length of service.

Maternity Leave In Rwanda

Pregnant employees in Rwanda are entitled to 12 weeks of paid maternity leave, with a mandatory minimum of 14 days taken before the due date. Before commencing maternity leave, a certificate confirming the pregnancy must be provided to the employer.

Paternity Leave In Rwanda

Rwandan fathers are entitled to unpaid leave for up to 4 working days in one calendar year.

Sick Leave In Rwanda

In Rwanda, an employee is entitled to a sick leave of up to 6 months per year, with the first 3 months being paid and the subsequent 3 months being unpaid. Evidence of illness will need to be provided to avail of this entitlement.

Parental Leave In Rwanda

Rwanda does not have a separate shared parental leave policy.

Termination Process in Rwanda

Terminations in Rwanda are not conducted on an at-will basis for employers, and they must be justified with just cause. Compliant terminations may include:

• Voluntary employee resignation
• Mutual agreement
• Unilateral employer decision (based on probation period, objective reasons, disciplinary dismissal, or unsuitability for the job)
• Contract expiration

Notice Period in Rwanda

In Rwanda, the statutory notice period for employees is 15 days' notice during the first year of service, and this period extends to one month after completing one year of service.

Severance in Rwanda

In Rwanda, severance pay is determined based on the duration of employment:

• Less than 5 years of service: 1 month salary
• 5-10 years of service: 2 months salary
• 10-15 years of service: 3 months salary
• 15-20 years of service: 4 months salary
• 20-25 years of service: 5 months salary
• More than 25 years of service: 6 months salary