Introduction to payroll in Cameroon
The Republic of Cameroon implements labor laws that span facets of employment practice from recruitment to payroll processing. Investing in a team in Cameroon entails compliance with these local labor laws, especially when it comes to financial areas such as payroll. Your workers expect accurate, timely payments as the foundation of your relationship, so any noncompliance regarding payroll guidelines also directly hurts your employees. The problem, however, is that securing the in-country expertise to run localized payroll in-house is challenging for many companies, both large and small.
Employee compensation, benefits, and taxes in Cameroon
This is where a partner like Skuad provides long-term value. Skuad helps you stay compliant when running payroll in Cameroon, addressing every nuanced detail from requirements of salary computation, specifics of taxation legislation, administration of benefits, and more:
- Income, regional, or corporate taxes
- Social security, health insurance, unemployment benefits, and pension
- Different types of leaves and holiday compensation
- Other taxes and employee deductions
Payroll process in Cameroon
Cameroon doesn’t have its own unique payroll process — it merely implements country-specific guidelines to a generally straightforward pipeline that has three stages: pre-payroll, computation, and post-payroll.
Due diligence is the focus of the pre-payroll phase. It's a preparatory stage where you need to define policies and standardize processes, the pre-payroll phase sets up the rest of the payroll process for success.
Setting up the organization
Your organization will have its own approach that’s unique from others in terms of setting policies and creating processes. These, in turn, will naturally encompass payroll in one way or another. The foundational step in the pre-payroll phase is making sure the most important parts of business are prepped, including:
Your business profile includes the identifications and business numbers that pertain to your operations. You’ll need to maintain accurate records of these for use when submitting documentation such as invoices and tax forms.
Policies related to work locations are best customized to that specific location. Companies employing remote teams in Cameroon and other parts of the world will need a separate work location policy distinct from the general internal policy.
Different types of leaves may have varied rates. For your workers in Cameroon, you need to adapt your leave policy to be compliant with local standards.
The same goes for attendance policy: stay compliant with any applicable local labor laws and make it transparent to your employees. Attendance policy should include standardized approaches to increases and deductions — from things like overtime and leaves — that again need to follow statutory guidelines.
Other statutory components defined by Cameroon’s local labor laws need to be carefully followed wherever necessary across your payroll processing pipeline. Make sure you work with your compliance team or partner provider.
A standardized approach to the mechanics of the compensation package you offer workers needs to be prepped during pre-payroll. Salary components start with the base rate, deductions, and benefits, but may include contract-specific items and other additional considerations.
Workers in Cameroon are typically paid monthly—no later than eight working days after the last pay period. Try to match local working norms not only to stay compliant with local legislation but also to meet the expectations of your employees.
The pre-payroll phase includes critical input collection and validation that feeds into the next stage of the process: wage calculation. A lot of the data required would be employee information, so make sure there are standardized, transparent processes to perform this due diligence.
Payroll calculation phase
Payroll calculation, as the namesake implies, is the phase where the wages are actually calculated. This stage focuses primarily on this task. Ideally, software automation and digital document submission tools are used to make this process more efficient and less prone to human error.
Salary disbursement is made once you send an invoice to your bank or payment processor. The post-payroll phase is mostly meant for salary payments, though the accounting and reporting that follows are also important for related reasons.
Payroll accounting is an internal process that keeps track of all wages sent out — a significant company expense.
Payroll reporting and compliance
Reporting is an external process, and it's mostly for compliance’s sake. External governing bodies often require the submission of various supporting documents related to payroll, such as tax forms.
Book a demo and our experts at Skuad can show you how to implement all the phases of payroll smoothly.
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Payroll processing in Cameroon
Local labor laws dictate payroll processing details, and every individual employee’s salary may be calculated differently. Payroll processing at scale can become complicated and cumbersome, not to mention risky, due to compliance issues. Companies that would rather invest in-house resources in other business areas tend to strategically partner with trusted payroll solutions providers to help alleviate the burden.
Payroll processing company in Cameroon
Companies managing workers and payroll in Cameroon often find a trusted partner to provide related services for them. Skuad, for example, offers a payroll solution that makes processing more efficient while also guaranteeing compliance with local labor laws.
Payroll management in Cameroon
Skuad also includes payroll management in its services. Often required by local governance, payroll management is the keeping and maintenance of financial records, official forms, and other supporting documentation for payroll purposes.
Payroll compliance in Cameroon
Employment regulation in Cameroon is mostly governed by the country’s Law No. 92/007 of 14 August 1992, otherwise known as the Labor Code, as well as relevant parts of other laws and acts.
Among other important employment practices and aspects, Cameroon’s Labor Code dictates some focal parts of payroll processing, such as:
- Minimum wages
- Taxation specifics
- Social insurance
Payroll components in Cameroon
Staying compliant with local labor laws when running payroll in Cameroon requires working knowledge of the components you need to carefully consider. While what is listed here may not be exhaustive, they give a general idea of what it takes to stay compliant with Cameroon’s employment legislation.
The minimum wage in Cameroon is currently set at 36,270 Central African Franc or XAF ($59.31). You should expect to meet a higher standard when hiring and paying employees in the country. The average salary, for example, is XAF 460,000 ($752.24) per month.
Except for the agriculture sector, employees in Cameroon typically work 40 hours a week. Curiously, there are no provisions for daily working hours, though it’s customary to use eight-hour workdays.
Cameroon allows up to 20 hours a week of overtime. Overtime pay is structured as follows:
- First eight hours of overtime is paid 120% of base hourly pay
- Following eight hours of overtime is paid 130% of base hourly pay
- Following hours up to the cap of 20 hours per week is paid 140% of base hourly pay
- Overtime hours rendered on Sundays and during nighttime are paid 140% of base hourly pay
Contributions to a national social insurance system are made by the employer on behalf of the employee at a rate of 4.2% of the taxable salary. Employees contribute only to the part of the National Social Insurance Fund (NSIF) that covers senior pension, permanent and total disability pension, and survival pension at a rate of 8.4% of their taxable salary.
Employees are entitled to Statutory Sick Pay if they incur an illness that lasts more than four days. Cameroon has not ratified International Labor Organization conventions for the provision of sick leave, but they recommend that workers receive at least 45% of their pay during the first six months of illness.
New mothers are entitled to 14 weeks of paid maternity leave, four of which are to be taken before their due date (six weeks if they are required to be confined). While there are no provisions for paternity leave in Cameroon, new fathers may opt to take up to ten days annually (not deducted from annual leaves) of paid special leave of absence for events directly concerning their family.
Below are the public holidays in Cameroon in 2022:
- January 1 - New Year's Day (Nouvelles années)
- February 11 - Youth Day (Journée de la jeunesse)
- May 1 - Labor Day (Fête du Travail)
- May 20 - National Day (Fête Nationale)
- August 15 - Assumption Day (Assomption de Marie)
- December 25 - Christmas Day (Noël)
Some holiday dates may be changed to the nearest day:
- Friday before Easter - Good Friday - Crucifixion of Jesus
- 39 days after Easter - Ascension Day - Ascension of Jesus into Heaven
- 1 Shawwal - Eid al-Fitr - Celebrates the end of Ramadan
- 10 Dhu al-Hijjah - Eid al-Adha - Feast of Sacrifice
- 12 Rabi' al-awwal - Mawlid - The Prophet's Birthday
Personal income in Cameroon is taxed in progressive rates dictated by income brackets with the following structure:
- First XAF 0 to 2,000,000 is taxed at 11%
- From XAF 2,000,001 to 3,000,000 is taxed at 16.5%
- From XAF 3,000,001 to 5,000,000 is taxed at 27.5%
- More than XAF 5,000,000 is taxed at 38.5%
Other important laws that may impact payroll include termination and probationary periods. In Cameroon, probation periods generally last up to six months, but this can be eight months for managerial positions. Meanwhile, minimum required termination notices are based on the categorization of the work of the employee and their duration of service. For example, up to three or four months’ notice is required for workers in specific sectors with a tenure of more than five years.
Want to learn more? Request a demo and Skuad’s experts can discuss all the details you need.
Outsourcing Cameroon payroll processing
Running payroll in Cameroon requires you to navigate the complex labor laws that govern employment practices in the country. The problem is that building a compliance team in-house might not be the best use of your resources.
Partner up with a global HR and payroll solutions provider, like Skuad, and strategically outsource your payroll efforts in a way that stays compliant with local labor laws. Better yet, Skuad can flexibly offer additional services for building more international teams when you need them.
Find out how Skuad can help you grow your business internationally now.
Cameroon’s exchange rate currently stands at $1 for every XAF 611.51.