2025 Pension Reforms in Rwanda: What You Need to Know

Rwanda’s pension system is undergoing significant reforms in 2025, bringing key changes that impact both employers and employees. These adjustments aim to align pension contributions with taxable income while enhancing retirement security.

Expanded Pension Contribution Base

Effective January 2025, pension contributions will now be calculated on total gross salary rather than just basic salary and housing allowances. This means previously exempt components, such as transport allowances, will now be included. By aligning pension contributions with the Rwanda Revenue Authority’s (RRA) taxable income base, the reform ensures a more comprehensive and equitable system.

Increase in Contribution Rates

The statutory pension contribution rate will double from 6% to 12%, split equally between employers and employees at 6% each. The 2% employer contribution for Occupational Hazards remains unchanged, bringing the total statutory contribution to 14%.

While these changes may reduce take-home pay, they strengthen employees’ long-term financial security. Employers should proactively review their payroll structures and prepare for compliance with these new regulations.

Need help navigating payroll compliance? Workpay simplifies statutory deductions and ensures seamless adherence to evolving labor laws.

‍

Workpay

Workpay Africa

Workpay is a HR and Payroll software company that offers time & attendance, payroll, human resource, leave, expenses and remote teams solutions to businesses across Africa.