African expat payroll – how to achieve legislative compliance

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As Africa’s economy strengthens, the continent is attracting multi-nationals from all corners of the globe looking to benefit from this growth. Expanding your business into these new territories is an exciting yet challenging endeavour. To establish new offices as quickly and efficiently as possible, most companies will send some of their existing employees out to help with the set-up.

However, expat payroll requirements can be complex to get right. Your company has to make sure that all expat employees stay legislatively compliant in their home countries as well as their new country of work. While legislative compliance can be difficult to achieve, it is possible.

Bear in mind the following three factors and your company’s expansion strategy will be successful – and your expat employees will be compliant.

  1. Local legislation

While some countries may have similar laws and tax structures, most are different. Africa is after all, a continent of 54 countries and assuming that what works in one country will work in another is asking for trouble. It’s extremely important to make sure that you have access to the most up-to-date legislative and regulatory information in each country that your company is present in.

In some countries, this local information is hard to come by. Depending on the level of digital infrastructure, online access may not be available and hard copies could be in short supply. This will delay the set-up of your new office unexpectedly but it’s far preferable to wait and source the correct information – rather than bulldoze ahead and run into problems with the local authorities. In cases like this, it’s sensible to enlist a local advisor to help you navigate the corridors of power and stay compliant at all times.

  1. Salaries and tax

Before opening a new office in a new country, it’s crucial to familiarise yourself with the local tax regulatory framework. To manage your expat payroll correctly, you’ll need to consider various aspects such as social security deductions and overtime, as well as currency exchange rates.

No employee who is sent to work overseas should ever earn less in their home country currency due to host country tax deductions. When calculating expat employees’ salaries, you need to gross up their take-home pay correctly to make sure that they are not short-changed. Many companies surprisingly still rely on excel spreadsheets and time-consuming iterative calculations to work this out.

  1. Perks and benefits

Many expat salary packages include attractive benefits like housing and travel allowances. In some cases, the company will even pay for their expat employees’ children’s education. These perks need to be calculated correctly according to the host country’s laws. Failure to do so, could affect your employee’s net salary and cause issues with local authorities. A lack of information or knowledge is not enough of a defence and your company could face severe penalties or even, put your employees in a vulnerable position with the host country’s government.

Don’t let these challenges deter you from opening a new office (or offices) in Africa. There is a wealth of opportunity on the continent that awaits legislatively compliant businesses. Before embarking on your expansion plans, gather the necessary information you need with regards to expat payroll in each relevant country. Once you’ve identified potential issues, you can put processes in place to avoid them. If you don’t want to manage this yourself and would feel more at ease with an expert on your side, let us know. Ensuring your employees are always compliant when working in Africa is what we do!

If you’d like to know more about how we can help you manage your expat payroll across Africa, get in touch with our team today!

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