Cameroon Payroll Outsourcing, Payroll Software and Employer Of Record (EOR) services.
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CAMEROON
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Cameroon Payroll and EOR
If you employ foreign nationals in Cameroon, you must understand your obligations and liabilities as an employer. Foreign employees need a Cameroon work visa to enter and perform employment in the country.
Cameroon offers several types of visas to suit different purposes:
- Tourist Visa: Valid for 30 days for sightseeing and leisure.
- Business Visa: Valid for up to three months for business activities.
- Work visa: required for employment in Cameroon.
- Transit Visa: Valid for one to five days for travelers passing through Cameroon.
- Diplomatic Visa: Valid for six months for diplomats and government officials.
Work visa requirements
To hire foreign workers in Cameroon, the employer must apply for a work permit. Some key requirements include:
- Employment contract with a detailed job description
- Recent medical certificate
- CV
- Application form
- Certified copies of academic or professional certificates
PAID TIME OFF
Annual Vacation
The employee gains the entitlement to annual leave at the rate of one and a half days each month of effective service (18 working days of annual leave), which is paid for by the employer. Workers under the age of 18 are given 2.5 days of service every month (30 working days of yearly leave). Mothers’ yearly leave is raised by two working days for each child under the age of six, or by one day if the mother’s cumulative leave does not reach six days. Furthermore, taking into account seniority in the organization, annual leave is enhanced at the rate of 2 working days per complete period, whether continuous or not, of 5 years of service.
The foregoing legal standards are the very minimum, and contract parties can agree on longer periods of paid leave through collective or individual agreements.
Sick
In most cases, employees are entitled to a minimum of 5 days of paid sick leave every year.
If an employee suffers an injury or illness on the job, the employer is obligated to pay for medical treatment.
Maternity
Female employees are entitled to 14 weeks of maternity leave, beginning four weeks before the delivery, which is paid for by social security, known as the CNPS. In the event of a medical emergency, this can be extended by six weeks. Maternity leave commences four weeks before the due date of the child’s birth. If the time of confinement occurs after the due date, the maternity leave will begin in its full capacity once the period of confinement begins. Maternity leave is compensated at the expecting mother’s regular rate of pay by social security. For up to 15 months following the birth, the mother is entitled to breastfeeding breaks of up to one hour every day.
Paternity
Paternity leave can be taken by fathers using their ten days of paid family leave.
Family
Workers are typically entitled to 10 days of paid leave each year for family occasions.
Mothers with children under the age of six are normally entitled to two additional days of leave for each kid living in the home, or one day if the mother’s total leave does not exceed six days.
National Holidays
Cameroon has a total of 10 paid public holidays.
Other Paid Time Off
N/A
STATUTORY EMPLOYEE BENEFITS
Unemployment
Aside from the employer providing severance pay to the employee, there are no other unemployment funds.
Workers Compensation
Covered by the “work accidents and occupational disease” branch of social security contributions.
Social Security
Employees and employers in Cameroon must contribute to the National Social Insurance Fund (NSIF). This contribution is withheld by the employer and covers specific pensions and insurance branches.
- Branch 1: Old-age Pension, Disability Pension, and Survival Pension:
- Total contribution rate: 8.4%
- Split equally: 4.2% by the employer and 4.2% by the employee.
- Branch 2: Family Benefits Branch:
- Entirely paid by the employer at 7%.
- Branch 3: Work Accidents and Occupational Diseases Branch:
- Paid fully by the employer, uncapped, with rates based on risk level:
- Low risk: 1.75% of salary
- Medium risk: 2.50% of salary
- High risk: 5% of salary
- Paid fully by the employer, uncapped, with rates based on risk level:
In addition to the NSIF, contributions towards the below funds are also mandatory:
- Housing Fund:
- Employee: 1% of taxable salary
- Employer: 1.5% of the taxable salary
- National Employment Fund (FNE):
- Employer: 1% of taxable salary
- Cameroon Radio and Television royalty ( CRTV )
- Every taxpayer must pay a royalty towards the CRTV. The amount is based on the gross pay of the individual. The highest amount payable is XAF 13,000 based on a gross salary of XAF 1 million.
- TDL ( Council Tax ) :
- The amount depends on an individual’s salary. For salaries more than XAF 500,000 the tax will amount to XAF 2,520 per month.
Retirement
Covered by the “old-age, disability, and death pension” branch of social security contributions.
Health
Medical aid is a private option and is based on an employee’s voluntary decision to sign up or for the employer to offer it. Social Security does provide some degree of health benefits (for example medical expenses for pregnancy and childbirth).
Life insurance is a private option and is based on an employee’s voluntary decision to sign up or for the employer to offer it. There is a workers compensation act.
PRIVATE EMPLOYEE BENEFITS
Workers Compensation
Private workers compensation is available in Cameroon.
Retirement
Private retirement/pension schemes are available in Cameroon.
Health
Private healthcare is available in Cameroon.
Insurance
Private life insurance is available in Cameroon.
PERSONAL INCOME TAX
Tax Year
- Tax year runs from January 1st to December 31st.
Tax Tables
Tax tables
| Net income (XAF) | PIT rate (%) |
| 0 to 2,000,000 | 11 |
| 2,000,001 to 3,000,000 | 16.5 |
| 3,000,001 to 5,000,000 | 27.5 |
| more than 5,000,000 | 38.5 |
- ACT – The calculated PIT shall be increased by 10% representing additional council taxes.
Taxation Method
The taxation method is a progressive tax system in Cameroon.
Double Taxation
Cameroon has multiple double taxation agreements.
Residence Requirements
Individuals of foreign nationality who reside in Cameroon for more than 183 days (in a calendar year) will be deemed tax domiciled in Cameroon and will be liable to payroll taxes and social contributions unless they can establish that the job they undertake in Cameroon is of an accessory character.
Payroll Calendars
Employees are not required to be paid on a set schedule.
Payrolls can be done weekly, biweekly, fortnightly, or monthly.
Rebates & Tax Credits
Individuals liable for Personal Income Tax (PIT) in Cameroon receive an annual deduction of XAF 500,000 for wages and salaries. Beyond this, there are no notable tax credits or incentives available for individuals.
Health Insurance
Medical aid is a private option and is based on an employee’s voluntary decision to sign up or for the employer to offer it. Social Security does provide some degree of health benefits (for example medical expenses for pregnancy and childbirth).
Unemployment
Aside from the employer providing severance pay to the employee, there are no other unemployment funds.
Social Security
Employees and employers in Cameroon must contribute to the National Social Insurance Fund (NSIF). This contribution is withheld by the employer and covers specific pensions and insurance branches.
- Branch 1: Old-age Pension, Disability Pension, and Survival Pension:
- Total contribution rate: 8.4%
- Split equally: 4.2% by the employer and 4.2% by the employee.
- Branch 2: Family Benefits Branch:
- Entirely paid by the employer at 7%.
- Branch 3: Work Accidents and Occupational Diseases Branch:
- Paid fully by the employer, uncapped, with rates based on risk level:
- Low risk: 1.75% of salary
- Medium risk: 2.50% of salary
- High risk: 5% of salary
- Paid fully by the employer, uncapped, with rates based on risk level:
In addition to the NSIF, contributions towards the below funds are also mandatory:
- Housing Fund:
- Employee: 1% of taxable salary
- Employer: 1.5% of the taxable salary
- National Employment Fund (FNE):
- Employer: 1% of taxable salary
PAYROLL ELEMENTS
Income
Salary, earnings, bonuses, overtime pay, taxable benefits, allowances, and certain lump sum perks are examples of remuneration (revenue from employment). Profits or losses made by a company or trade. Income or profits derived from an individual’s status as a trust beneficiary.
Bonuses
Bonus payments are widespread and are spelled out in an employee’s contract. Despite the prevalence of incentive payments in Cameroon, it is crucial to highlight that bonuses are not legally mandated.
Allowances
However, a wide range of allowances are tax-free, including, but not limited to, family allowances and benefits, benefits paid by any state authority by virtue of the law, special allowance to cover inherent duty, temporary allowances, benefits, and life annuities paid to victims of an industrial accident or other rightful claims. The cost of a vacation for an expatriate worker or their family is likewise not taxed.
Benefits in Kind
Benefits in kind are assessed based on taxable income as follows:
- Housing: 15%
- Electricity: 4%
- Water: 2%
- Per servant: 5%
- Per vehicle: 10%
- Food: 10%
- Telephone: 5%
- Fuel: 10%
- Security guard: 5%
- Internet: 5%
Benefits in kind not specifically listed are valued at their actual cost. Additionally, unless specifically exempted by regulation, any financial allowance that reflects these benefits in kind must be included in the assessment basis, adhering to the rates mentioned above.
Investment Income
Capital gains are typically taxed at the full corporate income tax (CIT) rate. However, certain types of income are subject to a 16.5% withholding tax (WHT). These include net overall capital gains from the transfer of shares and stocks, income from bonds, debts, deposits, surety bonds, current accounts, profits from the transfer of shares, reimbursement of advances or loans made by a manager or partner, and capital gains from transferring natural resource rights.
For transfers conducted outside Cameroon, both the Cameroonian enterprise and the transfer-or are equally responsible for paying the due amounts. External loans with a maturity of at least seven years, signed on or after January 1, 2014, are exempt from WHT. Royalties received from foreign entities are subject to CIT and must be included in taxable income, with consideration for double tax treaties (DTTs).
Retirement Funding
Covered by the “old-age, disability, and death pension” branch of social security contributions.
Health Insurance
Medical aid is a private option and is based on an employee’s voluntary decision to sign up or for the employer to offer it. Social Security does provide some degree of health benefits (for example medical expenses for pregnancy and childbirth).
Life insurance is a private option and is based on an employee’s voluntary decision to sign up or for the employer to offer it. There is a workers compensation act.
Risk Insurance
N/A
Taxable Income
Personal Income Tax (PIT) in Cameroon is a direct tax applied to the income of all individuals. This tax affects both residents of Cameroon and those earning income from Cameroonian sources. Individuals subject to this tax include wage earners, pensioners, annuitants, traders, farmers, artisans, landlords, and liberal professionals.
PIT is levied on various types of income, such as wages, salaries, pensions, and annuities. It also applies to profits earned by merchants, artisans, farmers, and liberal professionals. Additionally, revenue from land, capital gains, and income from related activities are subject to this tax.
Allowable Deductions
Cameroon’s tax structure allows for a deduction of business expenditures up to 30% of taxable salary. Furthermore, the sum designated to pay the employee’s social contributions is a deductible charge.
- Any individual subject to PIT is entitled to an annual abatement of XAF 500,000 for earnings and salary.
- Interest costs are completely deductible.
However, the deduction of interest on sums of money left or placed at the disposal of local corporations by partners or connected firms that control at least 25% of the share capital or corporate voting rights is limited to:
- One and a half times the quantity of equity (1.5). Interest on the portion of the loan that exceeds this limit is subject to CIT and distribution tax at 16.5 percent. 25 percent of profit before CIT and before deduction of the abovementioned interests and depreciation taken into account in establishing such profit.
- Otherwise, interest on the overpayment is not deductible. In this situation, the extra interest paid is added back for CIT purposes and liable to a 16.5 percent distribution tax.
- When both instances exist, the tax authorities will select the one that results in the greatest tax burden.
PAYROLL TAXES AND EMPLOYER CONTRIBUTIONS
Payroll Taxes
Income taxes are calculated on a sliding basis ranging from 11% to 38.5 %. The employer is expected to deduct all applicable taxes from the employee’s pay and send the amounts to the authorities by the 15th of each month.
Unemployment
Aside from the employer providing severance pay to the employee, there are no other unemployment funds.
Social Security
Employees and employers in Cameroon must contribute to the National Social Insurance Fund (NSIF). This contribution is withheld by the employer and covers specific pensions and insurance branches.
- Branch 1: Old-age Pension, Disability Pension, and Survival Pension:
- Total contribution rate: 8.4%
- Split equally: 4.2% by the employer and 4.2% by the employee.
- Branch 2: Family Benefits Branch:
- Entirely paid by the employer at 7%.
- Branch 3: Work Accidents and Occupational Diseases Branch:
- Paid fully by the employer, uncapped, with rates based on risk level:
- Low risk: 1.75% of salary
- Medium risk: 2.50% of salary
- High risk: 5% of salary
- Paid fully by the employer, uncapped, with rates based on risk level:
In addition to the NSIF, contributions towards the below funds are also mandatory:
- Housing Fund:
- Employee: 1% of taxable salary
- Employer: 1.5% of the taxable salary
- National Employment Fund (FNE):
- Employer: 1% of taxable salary
- Cameroon Radio and Television royalty ( CRTV )
- Every taxpayer must pay a royalty towards the CRTV. The amount is based on the gross pay of the individual. The highest amount payable is XAF 13,000 based on a gross salary of XAF 1 million.
- TDL ( Council Tax ) :
- The amount depends on an individual’s salary. For salaries more than XAF 500,000 the tax will amount to XAF 2,520 per month.
Workers Compensation
Covered by the “work accidents and occupational disease” branch of social security contributions.
ADMINISTRATION
Income
Monthly pay-as-you-earn (PAYE) returns must be filed by employers within 15 days after the end of the month.
The PIT return must be declared/filed no later than the 15th day of the month after wage/salary payment. When filing the Annual Tax Return, a regularization must be reported by the 15th of March after the fiscal year’s end.
The tax administration may send a pre-completed return of collected revenue or any other taxable item, together with the tax amount owing, to any natural or legal person who pays taxes or duties in accordance with applicable laws and regulations.
Non-professional taxpayers (workers) must make a declaration with the tax office of their domicile by 30 June of each year, according to the finance law for fiscal year 2021.
The yearly summary income tax return can be signed up for online using a form issued by the tax authorities.
Payroll Taxes
Income taxes are calculated on a sliding basis ranging from 11% to 38.5 %. The employer is expected to deduct all applicable taxes from the employee’s pay and send the amounts to the authorities by the 15th of each month.
Unemployment
Aside from the employer providing severance pay to the employee, there are no other legal provisions that allow an unemployed person to obtain benefits.
Social Security
In Cameroon, both employees and employers must contribute to the National Social Insurance Fund (NSIF). These contributions, deducted by the employer, cover specific pensions and insurance branches:
Branch 1: Old-age, Disability, and Survivors’ Pensions
- Old-age Pension
- Early Old-age Pension
- Disability Pension
- Survivors’ Pension
- Old-age Allowance
- Old-age Allowance for Premature Wear and Tear
- Survivors’ Allowance
Eligibility for these pensions requires the insured individual to have permanently stopped all salaried activities.
Branch 2: Family Benefits
- Prenatal Benefits
- Pregnancy and Maternity Medical Expenses
- Maternity Allowance
- Family Allowances
- Daily Allowance for Employed Women on Maternity Leave
This branch benefits workers as defined in the Labor Code, covering those with permanent or occasional professional activities in Cameroon.
Branch 3: Work Accidents and Occupational Diseases
- Benefits in Kind: Treatment, prosthetics, orthopedic costs, functional rehabilitation, professional retraining, victim transport, accommodation for accompanying persons, funeral costs.
- Cash Benefits: Daily allowance, permanent disability pension, disability allowance, survivors’ pension.
To claim these benefits, you must be a social security insured person or a beneficiary of someone who suffered an occupational accident or disease.
Additional Mandatory Contributions:
- Housing Fund: The Crédit Foncier tax on wages funds housing projects. Applicable to all employees, with specific exclusions.
- National Employment Fund (FNE): Aims to boost employment through:
- Job intermediation
- Training programs (learn by doing, formal, self-employment)
- Small enterprise support
- Job market information dissemination
- CRTV License Fee: A fee on monthly gross wages to support audiovisual development.
- Council Tax (TDL): Covers services like public lighting, sanitation, waste removal, ambulance operation, water supply, and electrification.
Workers Compensation
Covered by the “work accidents and occupational disease” branch of social security contributions.
Statutory Benefits
For your organization to remain compliant, all employees must get the statutory benefits mandated by law. Cameroon, for example, has ten public holidays on which employees should be excused. The country also has a vacation requirement, with employees being entitled to 1.5 days of leave for every month worked. They should get an extra two days every month after five years. Cameroon does not have a national healthcare system, but they do offer social protection.
Employee Benefits
For employee benefits in Cameroon it is best to start with those that are legally guaranteed. For example, the country observes 10 national holidays, and employees should be entitled to paid time off on those holidays. In most cases, all employees are entitled to at least 18 days of paid yearly leave.
In Cameroon, most female employees are entitled to 14 weeks of paid maternity leave. Paternity leave can be taken by fathers using their ten days of paid family leave.
LEGISLATION
- Constitution of the Republic of Cameroon 1972
- Labour Code 1992
- Social Security Profile for Cameroon 2017 (SSPTW Africa 2017)
STATUTORY BODIES
The National Assembly
CNPS/NSIF
