How to Pay Remote Employees in Rwanda

If your company has a remote team in Rwanda, you must effectively address the tax obligations to pay them using their preferred payment method. According to Rwanda's Income Tax Law 2018, remote employees in Rwanda are required to pay employment income-related taxes regardless of the source of income.

Since withholding tax is a percentage levied on payments made by resident entities, PAYE is the statutory obligation that applies to remote employees.

PAYE is a direct tax paid by an employed Rwanda resident. Each month, the employer withholds this tax and remits it to Rwanda Revenue Authority (RRA).

Employees who earn less than Rwf 30,000 per month are exempted from PAYE. Those who make more than Rwf 30,000 but do not exceed Rwf 100,000 pay 20% of the extra Rwf 70,000. Those earning over Rwf 100,000 pay 30% of the additional amount.

The following payment methods are ideal for conveniently meeting tax obligations while paying remote employees in Rwanda

1. Direct Bank Transfers

Directly depositing the money into your employee’s bank account is only possible if your bank facilitates direct deposits to Rwanda. For example, employers in Kenya can use ‘Equity Direct’ to transfer money into any bank account in Africa. However, the transaction fees are higher compared to local transactions.

2. Wise

Wise has low international bank fees. It also incorporates accurate exchange rates on all its transactions. Once you’ve completed the transfer, the funds will be available to your remote employee in a day.

Setting up a borderless account with Wise is free, fast, doesn’t implicate monthly charges, and applies for domestic and international transfers.

3. Western Union

Several Western Union outlets in Rwanda make it convenient to pay your remote employees. Visit a Western Union agent in your country, choose Rwanda as the country of your beneficiary, the amount you wish to send, and the delivery method.

Provide the recipient’s national ID details. After paying the transaction fee, you’ll get a confirmation email and a tracking number.

4. Xoom

Xoom is a PayPal service for sending payments to remote employees in Rwanda. You need to create a Xoom account or log in using your PayPal details. Enter the amount you wish to send, the recipient’s name, and the location in Rwanda.

You can send the money for a cash pickup or MTN Mobile Money and AirtelTigo mobile wallets. Note that only a few banks support Xoom in Rwanda.

Summing Up

Wise employers go a step further by using tools such as Workpay to manage payrolls for remote employees. So, paying remote employees in Rwanda becomes more manageable.