Employer of Record in Rwanda

An Employer of Record (EOR) in Rwanda is a company that legally employs workers on your behalf. This means you can hire talent in Rwanda without setting up a local legal entity. The EOR handles all the HR tasks like payroll, taxes, benefits, and compliance with Rwandan labor laws. It’s a straightforward way to build a team in a new country. Rivermate is an EOR provider that can help you with this.

How an Employer of Record (EOR) Works in Rwanda

Using an EOR in Rwanda simplifies your expansion. The process is clear and direct.

Here is how it works:

1. You find the talent. You recruit and select the best person for the job in Rwanda.
2. The EOR hires them. The EOR legally employs the worker under their own local entity. They handle the employment contract, making sure it follows Rwandan law.
3. Onboarding begins. The EOR manages the onboarding process, including setting up payroll and benefits.
4. Day-to-day work. Your new team member works for you, just like any other employee. You manage their daily tasks and projects.
5. The EOR handles HR. The EOR takes care of all the administrative work. This includes running payroll, withholding taxes, and managing social security contributions. They ensure everything is compliant with local regulations.

Benefits of Using an EOR for Hiring in Rwanda

Using an EOR in Rwanda gives you a significant advantage when you want to hire in the country. It saves you time and reduces complexity. You can focus on your business goals instead of getting caught up in local employment laws.

Here are some of the key benefits:

• Faster market entry. You can hire employees and start operations in Rwanda much faster than if you had to establish your own company.
• Reduced costs. Setting up a legal entity in another country is expensive. An EOR eliminates these setup and maintenance costs.
• Compliance with local laws. Rwandan labor laws can be complex. An EOR has local expertise and ensures you comply with all regulations, minimizing legal risks.
• Simplified administration. The EOR handles all HR and payroll tasks. This frees up your time and internal resources.
• Access to expert support. EORs have local knowledge and can provide guidance on contracts, benefits, and paid leave requirements in Rwanda.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Rwanda includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Rwanda.

Hiring in Rwanda is a straightforward process governed by the country's Labour Code. The legal framework aims to protect employee rights while providing a clear structure for employers. Whether you are hiring full-time employees or engaging independent contractors, understanding the local regulations is key to building a successful team in Rwanda.

Employment contracts & must-have clauses

In Rwanda, you must provide employees with a written employment contract. The contract can be for a fixed term or an indefinite period. While oral contracts are permissible, they are only valid for a maximum of 90 consecutive days.

Your written contracts must be in the local language and include the following essential information:

• Identification: Full details of both the employer and the employee.
• Job Role: The employee's job title and a clear description of their duties.
• Contract Duration: The start date and, for fixed-term contracts, the end date.
• Compensation: Details of the salary, wages, and any additional benefits.
• Working Hours: The expected hours of work.
• Place of Work: The location where the employee will be based.
• Probation Period: If applicable, the length of the probationary period must be stated.
• Termination: The process for terminating the contract.

Probation periods

You can include a probationary period in an employment contract to assess a new employee's suitability for a role.

• Duration: The initial probation period cannot be longer than three months.
• Extension: You can extend the probation for another three months if you provide a written performance evaluation to the employee. The total probation period cannot exceed six months.
• Termination: If an employee's performance is not satisfactory during probation, you can terminate the contract without notice, provided you have a written performance evaluation.

Working hours & overtime

The standard workweek in Rwanda is 40 hours, typically spread over five 8-hour days.

• Overtime: Any hours worked beyond the standard 40-hour week are considered overtime.
• Compensation: Overtime work must be compensated. The specific rates are often determined by collective labor agreements.

Public & regional holidays

Employees in Rwanda are entitled to paid time off for public holidays. If a public holiday falls on a weekend, the following workday is typically given as a day off.

Here is a list of public holidays in Rwanda for 2024:

Hiring contractors in Rwanda

Engaging independent contractors can be a flexible way to access specialized skills for specific projects. However, it's crucial to correctly classify workers to avoid legal risks.

An independent contractor typically:

• Works on a project basis.
• Controls their own work schedule and methods.
• Uses their own tools and equipment.

Misclassifying an employee as an independent contractor can lead to penalties, including back payment of taxes and social security contributions. An Employer of Record (EOR) can help you mitigate this risk. An EOR acts as the legal employer for your workers, ensuring compliance with local labor laws and managing tasks like payroll and tax administration. This allows you to focus on your business goals without the need to establish a local legal entity.

Understanding compensation and payroll in Rwanda is straightforward. The system is designed to be clear for both you and your employees. It covers everything from how often you pay your team to the taxes and contributions that need to be made. Following these rules helps you stay compliant and ensures your employees are treated fairly.

Payroll cycles & wage structure

In Rwanda, you typically pay your employees monthly. Payments should be made at the end of each month. The law requires you to pay wages within seven days of the end of the pay period.

There is no official 13th-month salary requirement in Rwanda. However, many employers choose to give performance-based bonuses to attract and retain talent. You can also offer other benefits like housing or phone allowances.

Overtime & minimums

Any work done beyond the standard 45-hour work week is considered overtime. Collective labor agreements regulate overtime pay.

Rwanda does not have a single national minimum wage. Instead, minimum wages vary by industry. For example, a worker in the tea industry might have a different minimum wage than someone in construction. It is important to check the specific rate for your sector.

Employer taxes and contributions

You are responsible for several contributions as an employer. These are calculated as a percentage of your employee's gross salary.

Employee taxes and deductions

Your employees also contribute to social security and pay income tax. You will deduct these from their monthly pay.

Employee income tax is charged at different rates depending on how much they earn each month.

In Rwanda, providing competitive benefits and understanding leave policies is key to attracting and keeping great employees. It's not just about staying compliant with the law; it's about creating a supportive work environment. When you take care of your team, they can do their best work for your business. This overview will walk you through the essentials of what you need to know.

Statutory leave

Rwandan law sets out several types of required leave for employees.

• Annual Leave: Employees get a minimum of 18 paid vacation days per year. This increases by one day for every three years of service, up to a maximum of 21 days.
• Maternity Leave: Female employees are entitled to 12 weeks of paid maternity leave. They can start this leave up to two weeks before their due date.
• Paternity Leave: Fathers receive four consecutive days of leave after the birth of a child.
• Sick Leave: Employees can take up to six months of sick leave. The first three months are paid, and the following three are unpaid. A medical certificate is required to prove illness.

Public holidays & regional holidays

Employees in Rwanda are entitled to paid days off for public holidays. Here are the official public holidays:

Typical supplemental benefits

To attract and retain top talent, many employers offer benefits beyond the legal requirements.

How an EOR can help with setting up benefits

Setting up a comprehensive benefits plan in a new country can be complex. An Employer of Record (EOR) simplifies this process for you. An EOR already has a legal entity in Rwanda, so you don't have to set one up yourself.

An EOR will:

• Ensure your benefits packages are compliant with Rwandan labor laws.
• Manage the administration of all statutory and supplemental benefits.
• Help you create a competitive benefits package to attract the best local talent.
• Handle payroll and contributions to social security.

By partnering with an EOR, you can save time and resources. You can be confident that your team in Rwanda is taken care of, allowing you to focus on your core business goals.

When you end an employment relationship in Rwanda, you must follow a clear and fair process. It’s not just about saying goodbye. It’s about handling the exit professionally and legally. This involves giving proper notice, calculating final pay, and providing the right documents. A well-handled offboarding process respects the employee and protects your business from legal trouble. You need to make sure every step, from the termination letter to the final handshake, follows Rwanda's labor laws.

Notice Periods

When you terminate an employment contract in Rwanda, you must provide a written notice period. The length of this notice depends on how long the employee has worked for your company.

Here are the minimum notice periods required by law:

• Less than one year of service: 15 days' notice.
• More than one year of service: 30 days' notice.

You must give the notice in writing and clearly state the reasons for the termination. During the notice period, employees are allowed one day off per week to look for a new job.

In cases of serious misconduct, you can terminate the contract without notice. However, you must inform the employee of this decision within 48 hours of discovering the misconduct.

Severance Pay

Severance pay is calculated based on the employee's length of service. The amount of severance an employee is entitled to is as follows:

It is important to calculate and pay the correct severance to avoid legal disputes.

How Rivermate Handles Compliant Exits

Navigating employee terminations in a different country can be complex. We make sure every step of the offboarding process is compliant with Rwandan law.

Here’s how we help you manage exits:

• Legal Compliance: We ensure that every termination follows the legal requirements for notice periods and severance pay.
• Documentation: We handle all the necessary paperwork, including the written termination notice, to ensure everything is documented correctly.
• Clear Communication: We help you communicate the termination decision clearly and professionally, outlining the reasons and next steps.
• Final Pay: We calculate and process the employee's final salary, including any accrued leave and severance, to ensure they receive everything they are owed.

By managing the entire process, we help you offboard employees smoothly and respectfully, protecting you from legal risks and ensuring a fair process for everyone.

Getting the right visas and work permits in Rwanda is straightforward. The country has a clear system for foreign nationals who want to work or do business. You will find that Rwanda offers several types of permits based on the work you plan to do. The main thing to remember is that a visa lets you enter the country, but you need a separate work permit to legally start your job.

Employment visas & sponsorship realities

An Employer of Record (EOR) can make hiring in Rwanda much simpler. An EOR acts as the legal employer for your team, handling all the necessary paperwork and ensuring you follow local laws.

Here is what an EOR can do for you:

• Sponsor work permits: An EOR that is legally registered in Rwanda can sponsor work permits for your employees. This means you do not need to set up your own local entity to hire workers.
• Manage the application process: The EOR will guide you and your employees through every step of the visa and work permit application. They handle the details, so you can focus on your business.
• Ensure compliance: An EOR stays up to date with Rwanda's labor and immigration laws, reducing the risk of legal issues.

There are some practical points to keep in mind:

• EORs sponsor employees, not contractors: Independent contractors need to apply for their own specific work permits.
• Work permits are tied to the employer: If an employee sponsored by an EOR wants to change jobs, they will need to get a new work permit.
• Processing is quick: The work permit process in Rwanda typically takes about a week.

Business travel compliance

If you are visiting Rwanda for a short business trip, the process is simple.

Citizens of all countries can get a 30-day visa upon arrival. You do not need to apply before your trip. For longer stays or more frequent visits, you can apply for a 90-day multiple-entry visa.

With a business visa, you can:

• Attend meetings and conferences
• Negotiate contracts
• Explore business opportunities

Rwanda also has agreements with several countries that allow for visa-free travel for up to 90 days. These countries include Benin, Ghana, Senegal, Singapore, and member states of the East African Community.