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Burkina Faso is a landlocked country in West Africa with a growing population and significant economic challenges. Although the country has faced problems, this low-income country has demonstrated a steady growth rate over the past few years, illustrating the potential within the economy.
As of 2024, the population stands at 23.5 million, per the World Bank. Despite regional instability, the West African nation has remained surprisingly resilient, even with its limited public investment. The International Monetary Fund (IMF) reports that the country saw a nominal GDP per capita of $21.5 billion and a real GDP growth rate of 4.3%.
Like other countries in the region, the economy is dominated by agriculture. Additionally, the Institut National de la Statistique et de la Démographie (INSD) reveals that 90% of the nation’s jobs are informal. In other words, employment contracts, payroll systems, and other required regulatory requirements are largely not present.
However, the labor landscape is changing as foreign investment and more integration from ECOWAS come into the country. Under the formalization process, there are massive opportunities for businesses in Burkina Faso. In this article, we cover the value of payroll outsourcing services and how businesses can benefit from them.
What is Payroll Outsourcing in Burkina Faso?
Managing payroll requires all employers to calculate the incomes of their employees and make the necessary deductions for income taxes and social security contributions, while maintaining compliant records. Dealing with this in-house isn’t suitable for every business, which is where outsourcing it to a dedicated payroll service provider comes in.
Bringing a third party into your organization to handle payroll unlocks the value of local experts who understand the rules and regulations governing payroll in Burkina Faso. Additionally, you gain access to state-of-the-art payroll platforms to ensure accurate and quick payroll processes every time.
Since global payroll outsourcing platforms serve multiple businesses, they use this scale to reduce costs for individual businesses. That’s why outsourcing payroll in Burkina Faso is often cheaper than managing these operations in-house.
However, West Africa payroll outsourcing services offer more value than cost alone. Dealing with local bureaucracy is fraught with challenges, so partnering with these firms is a way to manage the compliance headaches. With one of these partners by your side, you can anticipate and adapt to any regulatory changes while minimizing disruption to your operations.
How Payroll Outsourcing in Burkina Faso Works?
Burkina Faso’s growing economy is helping to transform the business reality on the ground. Although the country still has a long way to go, global payroll outsourcing processors are already operating in the country, supporting ambitious businesses, and contributing to the emergence of the West African nation.
Each payroll services provider will offer a different selection of services, but most will offer the same core services, including:
Needs Assessment
Establishing a relationship with a payroll outsourcing company will usually begin with an in-depth needs assessment. During this initial consultation, you will discuss your needs and the services you are looking to take advantage of.
Some of the factors influencing which services are ideal for your business include:
- Number of employees
- Contract types
- Salaries paid
- Employee benefits
- Payroll cycle
The point of discussing these issues is to allow the payroll services provider to create a plan that matches your business. You’ll receive a tailored quote guaranteeing that you only pay for the services you actually need.
Data Collection
Payroll outsourcing services act on your behalf, meaning they need certain types of data to be able to execute their services. Each provider will need different types of data, based on the country’s compliance requirements and the services you’re using.
Typically, you’ll be asked to provide the personal and banking details of each of your employees and their employment status, such as whether they work full-time or part-time, and how much they are paid per payroll cycle.
You may also be asked for payroll records from the past few years. Many countries will ask to see historical payroll records for compliance and reporting purposes, and Burkina Faso is no exception. Once your provider has the data needed, they can begin registering you with the relevant governmental bodies and establishing your bespoke payroll processing system.
Payroll Processing
All clients retain ultimate responsibility for their payroll processes. Your provider will manage all the relevant functions of your payroll cycle, but it is up to you to review their work before giving the green light each cycle. Likewise, you will be asked to supply information regarding employee attendance and hours worked.
Your payroll provider uses this information to calculate gross/net salaries, income tax withholding, and social security contributions.
Managing Taxes and Social Security
Burkina Faso requires employers to withhold the relevant amounts in income tax and social security from each employee’s salary. The responsibility of remittance lies with the employer.
Your payroll provider will calculate how much you are required to withhold and remit on your behalf. Moreover, they can perform the functions of submitting the relevant withholding amounts to each Burkina Faso government department, ensuring that you remain compliant with your legal obligations.
Making Payments and Reporting
It’s standard practice throughout the industry for the client to provide the final sign-off before your payroll provider executes anything for that cycle. Review the work they have done, confirm the figures, and then allow them to do the legwork themselves.
With your approval, your payroll provider can then pay your employees via direct deposit or another preferred payment method while remitting relevant tax and social security payments. Your employees will also receive pay stubs, confirming that they have been paid correctly.
Burkina Faso Labor Law and Payroll Compliance
Burkina Faso’s legal framework for employment law is the Code du Travail, which was last updated in 2008. Within the country, the Ministry of Civil Service, Labour and Social Protection is responsible for its enforcement.
Dealing with these laws can be complex, which is why your payroll services provider will manage your compliance on your behalf, including with regard to the payment of the minimum wage and social security contributions.
Minimum Wage and Overtime
The current minimum wage for workers in Burkina Faso is 45,000 XOF per month. This applies to all workers other than farm workers. It adds up to 260 XOF per hour for non-farm workers and 240 XOF per hour for farm workers.
The standard working week in Burkina Faso is 40 hours distributed across five to six days, depending on the sector. Overtime is permitted in the country, with payments of 115% of the worker’s base salary for the first eight hours of overtime, followed by 150% for all hours beyond that. Hours worked during public holidays and rest days are paid at a rate of 200% of the employee’s base salary.
Taxes
Personal income tax in Burkina Faso uses a progressive system, with a top rate of tax of 25%, as of the latest updates to the impôt sur les traitements et salaires (ITS). The tax rates are as follows in XOF:
- 0-30,000: 0%
- 30,001-50,000: 12.1%
- 50,001-80,000: 13.9%
- 80,001–120,000: 15.7%
- 120,001–170,000: 18.4%
- 170,001–250,000: 21.7%
- Over 250,000: 25%
The numerous tiers and complex percentages mean that making accurate calculations can be complex for businesses, which is why working with a payroll services provider can be so beneficial.
Social Security
All employers and employees must contribute to the Caisse Nationale de Sécurité Sociale (CNSS), which covers a range of benefits, including pensions, maternity leave, workplace injuries, and various family benefits offered by the state. Employers are required to contribute 16% of a worker’s gross salary, whereas the employee’s contribution is just 5.5%. These are legally required and must be paid monthly to the CNSS.
What are the Benefits of Payroll Outsourcing in Burkina Faso?
Burkina Faso’s rules and regulations can be intimidating for businesses establishing themselves in the country. Instead of wasting your time trying to navigate these bureaucratic headaches, outsource your payroll to a professional partner who understands all of your obligations within the country. Working with a global payroll outsourcing services provider has numerous advantages, including:
- Achieve Compliance: Ensure your legal compliance with Burkina Faso’s tax and social security requirements with the support of your payroll provider. They will not only streamline your compliance but also equip you for any future regulatory changes.
- Boost Efficiency: Reduce your in-house workflows by outsourcing them to your payroll services provider. Meanwhile, you can reallocate these resources to other critical functions.
- Cut Costs: The relatively low costs of allowing a payroll expert to manage these functions often work out cheaper than trying to manage these same processes in-house.
What are the Downsides of Payroll Outsourcing in Burkina Faso?
All strategic moves come with pros and cons, and payroll outsourcing is the same. It’s not a service for every business, and it’s important to mention the downsides so that you can make an informed decision. The most common disadvantages of outsourcing payroll in Burkina Faso include:
- Limited Control: Outsourcing means you are handing over control of your payroll functions. Each provider will have their own way of doing things, and you won’t have a say in that.
- Data Security: Your payroll provider will need the sensitive personal and financial data of your employees. This could make your data vulnerable to being intercepted or stolen and used for malicious purposes. Furthermore, you will be relying on your payroll partner’s internal data security measures while the data is stored in their systems.
- Service Quality: All markets have an array of providers with differing standards. Your partner may not be providing the high-quality services you expect, and that could lead to problems like late payments and tax non-compliance. Ultimately, you can outsource payroll, but you can’t outsource liability.
How to Choose a Payroll Outsourcing Provider in Burkina Faso
Burkina Faso’s business landscape is modernizing rapidly as foreign businesses enter the market and the government initiates a formalization process to enhance tax revenues and reduce the flaws in its systems. Enlisting the aid of a payroll outsourcing service in Burkina Faso that you can trust isn’t always easy when dealing with changing economies like this.
If you’re struggling for where to turn, here are some pivotal factors to focus on during your search:
Data Security Protocols
Ensure that any company has the highest standard of data security protocols in place. Look for recognized certifications, including SOC 1/2/3 and ISO 27001, as evidence that they’re committed to data security.
Experience
Look for companies that can demonstrate the appropriate experience in providing these services. Pay special attention to how long they’ve been operating in Burkina Faso, including how they utilize local experts.
Reputation
Discover what others are saying about your provider. Use popular platforms, including Google, to source reviews to find out what it’s like to work with a particular brand.
Price
Examine pricing structures to see whether their services fit into your budget. Remember, some payroll providers may not include all tax services within their advertised prices. Generally, it’s the standard to price based on a per-employee-per-month rate.
How Much Does Payroll Outsourcing Cost in Burkina Faso?
The standard price range of payroll outsourcing in Burkina Faso is $5 to $50 per employee per month. The exact price typically depends on the services you’ll be using, the size of your company, the country, and the sector.
Ensure the price you’re quoted includes all of the services you will actually be using. Some service providers may segregate tax services from their basic prices.
Payroll Outsourcing Alternative: Employer of Record
Hiring your own employees within Burkina Faso means you are assuming all of the rules and regulations that come with having a register of legal workers. Not every business wants the hassle of dealing with this. If you are seeking an alternative, consider a Burkina Faso Employer of Record (EOR).
An EOR in Burkina Faso means you can gain access to local workers without hiring them under your own registered entity. The employee in question remains under the jurisdiction of the EOR, meaning they will manage HR, payroll, and all other functions. This arrangement means you only have to concern yourself with employee scheduling and assigning tasks for your workers to perform.
Payroll Outsourcing for Success in Burkina Faso
Setting up a corporate entity in Burkina Faso gives you access to a highly affordable workforce and an economy that has demonstrated enormous potential. Accelerate your entrance into the market by outsourcing your payroll and compliance needs to an expert.
If you’re looking for a professional payroll provider with experience in Burkina Faso, contact Remote People today.
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