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Remote Teams
Hiring independent contractors or remote teams in Cameroon requires classification and compliance before proceeding with matters regarding payroll and workflow.
With a population of approximately 28 million people, Cameroon is a prosperous economy in Africa. Cameroon has concentrated on rural development, improving the cost of living, expanding education, industrialization, and free trade.
According to recent reports by the World Bank, Cameroon’s labor force is about 12 million in 2022. It makes the country an untapped talent pool for employers looking to access top talent and build a global team post-pandemic.
However, hiring and paying independent contractors and remote employees in Cameroon may be challenging, primarily if the company's headquarters are elsewhere. Employers must deal with foreign labor, payroll, tax, and employment laws and regulations. Fortunately, there is a way around this process.
Here is a guide on hiring and paying remote workers and contractors in Cameroon.
Hiring independent contractors or remote teams in Cameroon requires classification and compliance before proceeding with matters regarding payroll and workflow.
It is worth noting that misclassifying remote employees as independent contractors can result in costly litigations and heavy fines.
An independent contractor is a self-employed professional or worker who offers goods and services to companies and businesses on a contractual basis. Independent contractors never work inside a company’s physical office and usually provide their tools and equipment for the job.
The job description for independent contractors and freelancers is similar, the only difference being that the former only works for one client at a time.
Additionally, independent contractors submit their invoices for payment, meaning they’re responsible for business registration, social security contributions, and local tax withholding. Hiring independent contractors in home countries is simple but may be tedious if hiring outside the country.
On the other hand, remote employees work for an employer from a remote location and outside the company’s physical office. Remote employees can work from their homes, coffee shops, local libraries, desk rentals, and co-working spaces.
Remote employees can render their services to employers on a temporary or permanent arrangement. It means they may work full-time, per contract, or part-time, depending on the contract of employment.
There are various options when it comes to hiring independent contractors in Cameroon. However, the choice will mainly depend on how well they can navigate the non-compliance and non-performance issues. It also depends on whether the contractor is comfortable with a third party handling their invoices and payments.
These options include:
This is a good option for hiring independent contractors, especially if there is an existing relationship between the employer and the contractor. However, this option relies on trust and goodwill to get the job done and avoid disagreements.
Once the contractor completes a project, they invoice the employer, and payments are made via an agreed channel such as PayPal, Wise, wire transfer, or Payoneer. The biggest drawback to this option is that if disagreements arise between the two parties, either party may terminate the employment contract without mediation.
An umbrella company is an intermediary between the independent contractor and the employer. This company ensures that performance levels are satisfactory, payments are made on time, and the contractor complies with the local tax withholding laws.
An umbrella company performs all the administrative roles while avoiding interfering with the contractor’s independence.
This is a great option, especially if the independent contractor is okay with a third party handling their invoices and payments.
Employers who don’t want to deal with the risk of non-performance or non-compliance hire independent contractors as employees under a PEO provider. The contractor is employed in their own country through a PEO provider. They will handle the employment, onboarding, and payroll processes on behalf of the employer.
Employers recruiting remote employees in Cameroon can establish a local entity in the country’s capital, Yaoundé. This means that employers must register the company as the local employer of remote employees. Unfortunately, it is a tedious, complex, and expensive multi-process.
This ideal option eliminates the need for a local entity in Cameroon. An EOR like Workpay will handle remote work permits, hiring, onboarding, HR, payroll, and other services. The EOR will do this per company-specified requirements and comply with Cameroon’s local laws.
Employers planning to hire remote employees in Cameroon should have the following information on employment taxes, payroll, and labor laws:
The minimum wage in Cameroon stands at 36,270 Central African CFA Francs (XAF) per month, while the standard working hours in the country is 40 hours a week.
Employers and employees in the country must draw a separate agreement for overtime pay. However, Cameroon’s Ministry of Labor and Social Security dictates that this overtime pay shouldn’t be less than 125% of the regular wage rate. Full-time employees in the country can work up to 20 hours a week worth of overtime.
The personal income tax in Cameroon ranges between10% and 35%, and it’s levied on the income of all Cameroonian residents. The employer must deduct personal income tax from their employee's salary and deposit it at the tax centre before the15th of every month. However, employees who earn less than 62,000 Central African CFA Francs (XAF) are exempt from these deductions.
Cameroon observes 11 public holidays during which employees are not obligated to report to work.
Additionally, employees in Cameroon are entitled to 18 days of paid time off. Employees are also entitled to five days of paid sick leave in a calendar.
The employer must cover the medical expenses if the employee is injured at work. Expectant mothers in Cameroon are entitled to a 14-week maternity leave compensated by social security. The law has no exclusive provisions on paternity leave.
Fixed-term employment contracts in Cameroon are capped at two years and can only be extended once. These contracts can also be terminated through mutual consent or for gross misconduct on the employee’s part.
Once the employer presents the notice of termination, the employee is entitled to one day off a week to look for a new job. This goes on for the entirety of the notice period. The probation period in Cameroon is six months, and employees qualify for severance pay after 24 months of service.
Employers must pay all remote employees and contractors incompliance with Cameroon’s tax, payroll, and employment laws. That said, employers are supposed to keep track of these employment laws and fluctuating currency rates. It would also be wise to set us convenient global payroll solutions.
In addition to the Employer of Record(EOR) acting as the employer’s representative, they also provide payroll services. This is a great option, especially for employers who don’t have the time to keep up with the ever-changing tax and labor laws.
An EOR service provider can keep up with all these laws and currency exchange rates to ensure that remote employees and contractors in Cameroon receive payments on time.
Direct deposits and bank transfers are good choices. To complete the payments, employers have to rely on SWIFT services which require the employee or contractor’s bank details and SWIFT code.
Some of the banks in Cameroon that support international bank transfers and deposits include BNP Paribas, Credit Agricole, La, and Banque Postale.
Some of the best online payment options include Payoneer, Xoom, WorldRemit, PayTop, Softeller, and Monisnap.
Employers can also send payments to independent contractors and remote employees in Cameroon using PayPal. However, the drawback is that the recipient won’t be able to withdraw the money at any Cameroonian bank.
● A remote employee is loyal
● Employers have better control over remote employees and the work they do
● Streamlined training thanks to low turnover among remote employees
● Remote employees act as the company’s brand ambassadors in their country
● Hiring remote employees involves additional expenses such as sign-in bonuses, training, benefits, and paid time off.
● Hiring an independent contractor is simpler and quicker than onboarding a remote employee.
● It is cost-efficient for employers since they don’t have to pay any benefits.
● Independent contractors come with fewer misclassification risks than remote employees.
● Employers have the flexibility of a short or long-term contract.
● Supervising an independent contractor may be challenging compared to a remote employee.
● The contractor sets the pricing in most cases which may prove costly for the company in the long run.
● Unless employers spend more money, employers may not fully own the copyrights of an independent contractor’s work.
Wrapping Up
Employers planning to expand into Cameroon without dealing with the complex legal responsibilities and the risk of non-compliance can rely on Workpay.
We can hire, pay and manage remote employees and independent contractors in Cameroon, eliminating the need for a legal entity. Talk to us today for more information.
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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.
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