Global Payment and Compliance
How to pay contractors. Independent contractors. Mpesa, Paypal, Skrill. Outsourcing your payroll.
You can use direct bank transfers to pay independent contractors in Kenya. Direct bank transfers from other countries are secure and easy. Additionally, the transaction fee is often affordable.
The main problem with a direct bank transfer is it can take a few days to process which is an inconvenience to contractors. Luckily, Kenya has multiple payment methods ideal for foreign employers.
M-Pesa is the most popular mobile-based money service in Kenya and Africa. M-Pesa started as a simple mobile transfer from one person to another then grew and improved its services.
With the help of M-Pesa bulk payments, employers can disburse payments from their short code to the contractor’s phone in real-time. Private and government-owned organizations can use the M-Pesa bulk payment service to facilitate payments in a streamlined fashion.
Employers and organizations can apply for the M-Pesa bulk payment service through:
For two decades, PayPal has been a simple way of getting paid from any country globally, including Kenya. The best thing about using PayPal in Kenya is that you can link it with your M-Pesa or Equity Bank account for seamless transactions.
PayPal is a preferred platform by most independent contractors in Kenya to receive payments from clients. To open a PayPal account, all you’ll need is an email account and a debit card.
Most independent contractors in Kenya use Skrill as an alternative to PayPal. Skrill has become a popular payment method for many people because it has a shorter waiting period.
On top of being fast and secure, independent contractors in Kenya can receive payments in any currency and transfer them to their M-Pesa or bank account. It is also simple to open a Skrill account. Just sign up and start receiving from all over the world.
The withholding tax is payable by all independent contractors based in Kenya. The law requires them to pay corporate tax at 37.5% when working for a foreign company and 30% for local companies. Every independent contractor in Kenya has the legal obligation to file for tax returns every financial year.
There are also other taxes payable by independent contractors depending on certain circumstances. Workpay has a payroll solution that will ensure that employment data is recorded accurately, payroll is processed promptly, and the independent contractors are paid on time and in compliance with Kenya’s labor and tax regulations.
Ensure you select a good payment method such as Workpay that satisfies your independent contractor and company needs. Abide by tax regulations, by learning about them or outsourcing payroll to online platforms.
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