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Hire and Pay Remote Employees in Senegal

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Global Payment and Compliance

Hire and Pay Remote Employees in Senegal

Do you need to hire or pay a remote employee or an independent contractor in Senegal? The rules are changing fast and you need to keep up with all the regulations about hiring and paying remote workers and contractors. Read on to stay ahead.

Workpay
September 23, 2022
6
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September 23, 2022
8 min read
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Senegal is an African country located at the westernmost point of the continent along the Atlantic Ocean. It has a population of about 15.6 million people, and French is the official language. Notably, Senegal is ranked among the top country with the ease of doing business in Africa due to its business-friendly regulations. Its economy is driven by tourism, fishing, banking, construction, agriculture, and mining. 

Senegal has a pool of talent in various industries, including ICT, healthcare, engineering, financial services, transport & logistics, retail services, marketing & PR, Oil & gas, and tourism. However, there are a few things an international employer should consider before onboarding remote workers from any country. Why? It helps avoid legal implications that could affect their new hire. 

It also applies while hiring remote employees and independent contractors in Senegal. Below is a comprehensive guide. 

What is the Difference between Employees and Independent Contractors? 

There are significant differences between an employee and an independent contractor as outlined below: 

  1. Employees work solely for the employer, and their remuneration is a salary or wages. On the other hand, an independent contractor may work for several clients at the same time, and their income is a fee charged for each project they undertake. 
  2. Employees work under an employer's direction and control, while independent contractors work at their will and are not under the control of their clients. 
  3. Employers are responsible for deducting taxes from their employee's salaries or wages. Conversely, independent contractors are liable for their own taxes, and clients don’t withhold any amount as tax. 

Is it Cheaper to Hire an Independent Contractor or Employee? 

Hiring an independent contractor is cheaper than hiring an employee. Why? Hiring an employee comes with the additional cost of training, benefit packages, bonuses, and payroll taxes. On the other hand, an independent contractor is paid by the hours or project, and no additional cost is included.

However, hiring employees is ideal when you need more worker control and hope to assign managerial and administrative duties that require training. 

How to Hire Remote Employees and Independent Contractors in Senegal 

As outlined earlier, the potential employer ought to be aware of legal and compliance requirements when hiring remote employees and independent contractors. You need to understand Senegal’s payroll, taxes, and compliance requirements. Below are three ways to hire remote workers in Senegal:

1. Set up a subsidiary 

Often, setting up a subsidiary is associated with a company intending to make an acquisition or when it wants to keep brand identities separate. However, employers planning to hire remote employees and independent contractors overseas should set up one. 

A foreign subsidiary or local entity in Senegal gives employers an international presence and allows you to hire remote workers in compliance. It also boosts your brand awareness. 

However, setting up a subsidiary is expensive and time-consuming. It’s a complex process that entails registering business names, opening local bank accounts, setting local payroll, acquiring permits, and hiring local staff. 

2. Direct client contractor engagement 

Another alternative for employers to hire remotely from Senegal is onboarding independent contractors directly. Therefore, if an employer require skills that their employees lack, it's possible to have direct client contractor engagement. 

This kind of hiring gives access to a highly skilled workforce and offers financial benefits (it’s less expensive than hiring remote employees). 

Nonetheless, employers must be cautious to avoid misclassifying employees as independent contractors. Misclassification puts a business at risk of back taxes, penalties, or being required to compensate employees for deprived benefits. 

3. Use Employer of Record (EOR)

Working with an employer of record is another alternative for international employers if the above two are unsuitable. It’s the fastest and most ideal way to hire remote employees and independent contractors when employers don’t have a presence in foreign countries such as Senegal. 

 An EOR is a service provider that legally helps companies or individuals hire remote employees or independent contractors in other countries. You don’t need a local subsidiary, and the EOR handles everything for you, from onboarding remote workers compliantly and managing payroll to handling taxes. 

Workpay is your trusted EOR service partner in Africa when hiring remote employees or independent contractors in Senegal.  

How to Pay Remote Employees and Independent Contractors in Senegal

Before exploring the best ways an employer may pay a remote team, you need to understand the payroll and tax requirements in Senegal. 

The typical payroll cycle in Senegal is monthly or weekly, and the minimum wage is 209.10 CFA francs per hour for general workers. Notably, employers and employees make specific contributions as outlined below.

Employee Contributions:

  • IPM Health Fund- 1.5% up to salary cap of 60,000 CFA francs 
  • National Retirement Fund-  40% on 14% of the total salary 

Employer contribution: 

  • IPM Health Fund- 1.5% up to salary cap of 60,000 CFA francs 
  • National Retirement Fund- 60% on the 14% of the total salary 
  • Social security- 7% 
  • Industrial Accident Fund- 1% to 5% of the total salary

Additionally, employee income tax varies from 0% to 40%, as outlined in the table below: 

Income (CFA franc) Income Tax (%)
0-630, 000 0%
630,001- 1,500,000 20%
1,500,001- 4,000, 000 30%
4,000,001- 8,000,000 35%
8,000,001- 13,500,000 37%
13,500,001 and above 40%

Best methods to pay remote employees and independent contractors in Senegal

1. Bank transfers 

Banks transfer is a common way of sending money to Senegal from other countries. Therefore, it would be an excellent option for international employers with remote employees or independent contractors in Senegal. 

All you need to complete a bank transfer to a remote worker in Senegal is their full name and account details (Bank account number, swift code, and maybe branch address). 

2. Online money transfer services 

Online money transfer services allow users to electronically transfer money from one bank account to another or one e-wallet to another online. It’s the modern-day method of transferring money equivalent to wiring money. 

Most online money transfer apps or web-based platforms allow users to send money instantly. More importantly, you only need your employee's mobile number or email address to transfer payments to them. The top online money transfer services to consider while paying remote teams in Senegal include Worldremit, Payoneer, WISE, Sendwave, Remitly, Transfast, Xoom, and Revolut. 

3. Cash pickup transfer services 

Employers can also pay remote employees and contractors via cash pickup transfers. Usually, the recipient (employer) on the other end receives their payment in cash from a physical location. All employers need is their debit or credit card and employee or contractor’s information. After paying, the transfer is completed in minutes, and you get a cash pickup number. You should then share the number with the employee to use it to collect the money from a pickup location near them. 

Senegal's reliable cash pickup service providers include Ria Money Transfer, Western Union, and MoneyGram. Above all, these three providers offer an online transfer service whereby you can send money online for cash pickup or deposit directly into your employees’ bank accounts. 

4. Use EOR services 

As outlined earlier, employers who don’t intend to set up a local entity have an alternative of working with an EOR to hire and pay remote employees. In this case, an EOR provider such as Workpay acts as a full admin employer and provides remote payroll for your remote team in Senegal. More importantly, a competent EOR service provider ensures that all regulatory standards are upheld in the country you want to hire from. 

In brief, an EOR overtakes the legal responsibility of hiring various types of workers to minimize complexities linked to HR functions, labor market access, tax compliance, and paying employees internationally. 

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.

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