Burundi is a small, densely populated East African country. Despite its unfortunate position of being the poorest country in the world by nominal GDP per capita, it has enormous untapped potential due to a lack of development. As of 2024, Burundi has a population of 14.4 million, with 80% of the population working in the agricultural sector.

According to the International Monetary Fund (IMF), Burundi has a nominal GDP per capita of $6.75 billion, with an annual growth rate of 1.9%. This makes it a low-income economy with modest growth rates, driven mainly by its small but growing services industry, combined with limited public investment.

Most of the population relies on informal work, with an estimated 86-98% of jobs being classified as informal. This means that practically all jobs contain no written employment contracts or formal payroll. In other words, this is an underdeveloped economy with plenty of potential for businesses seeking to outsource here for entry into the growing East African regional economy.

In this article, we’ll cover how Burundi payroll outsourcing services work and how they support ambitious businesses seeking to become pioneers in this market.

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What is Payroll Outsourcing in Burundi?

Managing your payroll means establishing processes to calculate the earnings of employees correctly while complying with laws on social security contributions, tax deductions, and recordkeeping. If you don’t want to manage it in-house, it’s time to outsource it to a third party to manage it on your behalf.

Working with a payroll outsourcing provider equips you with an expert in Burundi’s employment and payroll laws, ensuring you remain compliant. Additionally, you can take advantage of cutting-edge platforms that give you and your team the accuracy and speed you expect. The purpose of these payroll outsourcing services is to expand at scale, working with companies across Burundi to lower the cost for everybody.

Why should businesses turn to these services in Africa? Payroll outsourcing isn’t just about software but about keeping compliant with the formal employment and tax laws in Burundi. Experts monitor changes to the law, ensuring businesses are not caught out and maintain good relations with the Burundian authorities.

How Payroll Outsourcing in Burundi Works?

Burundi’s undeveloped economic landscape may make business owners assume that no payroll outsourcing providers offer their services here, but that couldn’t be further from the truth. Although each payroll provider offers a different selection of services, most offer identical core services. Here’s a breakdown of how it works:

Needs Assessment 

Engaging with a payroll outsourcing provider in Burundi begins with a needs assessment. This initial consultation with your provider outlines your needs and the services that are likely to benefit you. Issues you’ll cover include:

  • Workforce size
  • Contract types
  • Salary ranges
  • Benefit structures
  • Payroll cycles

 The purpose of acquiring this information is so the payroll provider can create a bespoke plan and offer a tailored quote before offering any services. This guarantees you get the services you need and that you don’t pay for what you don’t need.

Data Collection

Your provider will need your data to act on your behalf. The data needed will vary from provider to provider and from country to country, but you’ll need to supply the personal and banking information of each of your contracted employees. They’ll also need their employment classification (full-time, part-time, etc.) and salary details.

In some cases, they’ll also request historical payroll records. These will usually be for the past few years and are there to satisfy the compliance and reporting requirements set by Burundi. With all this to hand, your provider can set up your payroll processing system and register you with the relevant tax and social security bodies.

Payroll Processing

Your provider will handle every function of your payroll for each cycle, but you’ll still retain responsibility for accurately tracking both hours worked and attendance for each of your employees. The payroll provider can then use this information to calculate gross salaries, social security contributions, and income tax withholding requirements.

Managing Taxes and Social Security

As with most countries, it’s the responsibility of the employer to withhold the relevant amount of income tax from each employee’s salary. Your payroll provider will calculate and withhold the relevant amount before remitting the payments to the Burundian tax authorities. Simultaneously, all social security contributions from the employer and employee side will be taken care of on your behalf.

Making Payments and Reporting

It’s standard practice for the provider to ask for approval from the client before they finalize payroll. Review their work and give them the green light. Your provider will pay your employees their salaries minus relevant tax and social security deductions by their preferred method. They’ll also receive their pay stubs for their records, while your internal records will be generated for storage.

Burundi Labor Law and Payroll Compliance

Burundi’s informal economy dominates, but it still has a firm legal system in place relating to employment law. The Ministry of Employment, Labour, and Social Security enforces the laws contained within the Burundian Labor Code (Livre III, 2009). Your payroll outsourcing provider will support you in navigating the laws of the land and the relevant clauses within the labor code to ensure you remain compliant.

Minimum Wage and Overtime

The legal minimum wage in Burundi is calculated on a daily basis. In urban areas, including Gitega and Bujumbura, the minimum wage is 160 Burundi Francs. Rural workers must receive 105 Burundi Francs daily. These amounts have remained unchanged since 1988.

Standard working hours in Burundi range from 40 to 45 hours per week, with Saturday being a day off. Typically speaking, employers can demand 150 hours of overtime annually. Any overtime hours worked are paid at a rate of 135% the base salary for the first two hours, followed by 160% for all subsequent hours.

Taxes

Burundi uses a progressive tax system starting at 0% and topping out at 30%. Employees earning up to 1.8 million Burundi Francs are exempt from paying income tax. From 1.8-3.6 million Francs, the tax rate is 20%, with all income over 3.6 million Francs taxed at a rate of 30%. These funds are remitted to the Burundian Revenue Authority (OBR).

Social Security

Employers and employees are required to make contributions to Social Security. The employer must provide 6% of an employee’s salary, capped at 450,000 Francs per month. This rate rises to 8.8% for “arduous work”.

Employees must contribute 4% of their salaries, which is taken directly from their earnings at source and remitted by the employer. Under the law, employers must make additional contributions of 3%, up to a maximum of 80,000 Francs per month. All funds should be remitted to the National Institute of Social Security (INSS).

What are the Benefits of Payroll Outsourcing in Burundi?

Burundi’s mess of rules can be a headache when you’re establishing and growing your business inside the country. Rather than worrying about local rules and regulations, businesses are increasingly outsourcing to payroll providers who already understand the system. Your firm benefits from this through:

  • Legal Compliance: Businesses bear all the costs of innocent mistakes when operating in new countries. The best payroll providers have local experts on their books, giving you peace of mind that you’re meeting your obligations and staying updated on any upcoming changes.
  • Increased Efficiency: Cut down on your administrative workflows by letting somebody else do it instead.
  • Reduced Costs: Global payroll outsourcing providers rely on scale to run their operations, which is why they can offer their services for such an affordable price. This is why it’s often cheaper to outsource payroll in the long run.

What are the Downsides of Payroll Outsourcing in Burundi?

Every business decision has advantages and disadvantages, and payroll outsourcing is no exception. Before outsourcing this vital function, it’s essential to be aware of the potential downsides and why it might not work for you. The most common downsides include:

  • Data Security: Sharing your data with a third party means you run the risk of it being intercepted and misused by cybercriminals. You’re also relying on your payroll provider to have the proper data security protocols in place to protect your data.
  • Service Quality: Not all payroll providers are created equal. Some firms may have low-quality services, leading to your employees getting paid incorrect amounts or not getting paid on time. It could also mean incurring penalties if mistakes are made with regard to tax and social security remittances.
  • Reduced Control: All payroll providers have their own systems in place, meaning you’re also conforming to how they would like to do things. That loss of control can mean becoming reliant on that provider because you give up the in-house infrastructure you would have otherwise had.

How to Choose a Payroll Outsourcing Provider in Burundi

Burundi is one of the few places in the world where brave entrepreneurs have a wide-open market to take advantage of. Selecting a payroll outsourcing service provider that you can trust isn’t always the most straightforward process in the world. Think about the following when comparing different providers to help you make the correct decision for your organization:

Experience

How long has your payroll provider offered their services within the Burundian market? Do they employ local experts? The more experience they have, the likelier they are to already have firm, legally compliant workflows in place.

Security Protocols

Your employees’ personal and banking information is extremely sensitive, and any payroll platform must take it seriously. Ensure your provider has proper protocols in place to protect it, including recognized certifications like SOC 1/2/3 and ISO 27001.

Reputation

See what others are saying about a particular payroll service provider. Look for reviews of their services online, including those in relation to Burundi and other countries. Examine their strengths and weaknesses and see how that alters the picture for you.

Price

Cost matters because it determines whether it makes financial sense for your firm. Most providers charge per employee per month. Set your own budget and narrow down your search accordingly.

How Much Does Payroll Outsourcing Cost in Burundi?

The cost of outsourcing your payroll in Burundi ranges from $5 to $50 per employee per month. The immense range isn’t just because of the varying array of services, but because many services will offer bulk per-employee discounts for larger companies. However, look deeper than the advertised price. Some providers may not include tax services as part of their basic prices.

Payroll Outsourcing Alternative: Employer of Record

Organizations that have already established themselves in Burundi are free to hire employees themselves. However, if you’re looking to bring on local expertise, you may decide to outsource to a service provider to support the process. Alternatively, you may want to hire a Burundian without worrying about registering entities.

In this case, there is the Employer of Record (EOR) in Burundi. An EOR in Burundi uses its own entity within the country to hire workers on behalf of its clients. Essentially, you get to benefit from hiring local workers, but the EOR manages everything from HR to payroll. All you have to do is manage their schedules and the tasks you want them to perform.

It’s a much more straightforward alternative to hiring Burundian employees directly and managing everything in-house.

Payroll Outsourcing for Success in Burundi

Setting up a corporate entity in Burundi is the first step to staking your claim within this developing market. Enlisting the services of a payroll services provider is an easy way of reducing your in-house administrative costs and streamlining everything, so that you can focus on growth.

Working with a payroll provider in Burundi essentially outsources the hassle of compliance, while giving you access to an expert who understands the local landscape. If you’re ready to work with a professional payroll provider with specific market experience, contact Remote People now.