Workers compensation fund tariff

Employer of Records (EOR) Service in East Africa (Kenya, Uganda, Tanzania, Rwanda Burundi, and Democratic Republic of Congo (DRC)
April 8, 2022
EMPLOYER OF RECORDS DEFINITION
September 2, 2022

Workers compensation fund tariff

TANZANIA

Workers compensation fund tariff

Employers are subject to the workers compensation fund tariff. The tariff is payable on a monthly basis and is calculated as a percentage of cash sums paid to employees at 0.5%. Employers are also required to file a monthly return form.

Skills and development levy (SDL)

SDL is a tax on the employer calculated as 4% of gross cash emoluments of employees.

Consumption taxes

Value-added tax (VAT)

The standard rate of VAT is 18%, 

Social security contributions

There is a state social security scheme known as the National Social Security Fund (NSSF), which every employer in the private sector must contribute to. The employer’s contribution is 20% of the employee’s cash remuneration; however, the employer is entitled to recover up to half of this from the employee.

KENYA

National Social Security Fund (NSSF) contributions

The NSSF was set to undergo drastic transformation following the enactment of the NSSF Act 2013, which became effective from 10 January 2014. However, the implementation of the new Act awaits conclusion of a pending court case. In the meantime, NSSF contributions are as per the provisions of the old Act (i.e. KES 200 for employer and KES 200 for employee).

National Hospital Insurance Fund (NHIF) contributions

Employees in Kenya are required to contribute to the NHIF. There is no corresponding employer contribution.

The contributions are graduated, with the maximum contribution currently being KES 1,700 per employee for employees earning more than KES 100,000 per month.

Consumption taxes

Value-added tax (VAT)

VAT is levied at a standard rate of 16% on the supply of taxable goods and services in Kenya, as well as on the importation of taxable goods and services into Kenya. See the Other taxes section in the corporate tax summary for reduced rates and additional information.

UGANDA

SEE ALSO:  KEY PAYROLL REGULATORY REQUIREMENTS IN KENYA.

Social security contributions

An individual in employment is obligated to make a contribution of 5% of one’s gross earnings to the national social security fund.

An individual who is an employer is also obligated to make contributions to the national social security fund for each employee, amounting to 10% of their gross pay.

Local Service Tax

An individual in employment is obligated to pay Local Service Tax to the Town Council where one resides. 

According to the Local Service Tax Act and guidelines for the implementation of the Local Service Tax, an individual who is an employer is required to determine and deduct the Local Service Tax from the salaries and wages of their employees within a period of four months not later than the 15th day of November.

Consumption taxes

Value-added tax (VAT)

VAT is charged on taxable supplies made by taxable persons, the importation of goods other than in cases of exempt imports, and imported services by any person. The standard VAT rate is 18%; some items are zero rated and others are exempt.

RWANDA

Social security contributions

Rwanda has a national social security fund known as the Rwanda Social Security Fund (commonly known as Caisse Social du Rwanda or CSR). All salaried workers, both nationals and foreigners, working in Rwanda are required to contribute to the scheme. The employer is required to contribute 5% of the employee’s gross salary to the scheme, while the employee’s contribution is 3%.

Consumption taxes

Value-added tax (VAT)

An individual trader is liable for VAT on the same basis as a company. VAT is an indirect tax, which is largely directed at the domestic consumption of goods and services, and at goods imported into Rwanda. The tax is designed to be paid mainly by the ultimate consumer or purchaser in Rwanda. Goods and services are either exempt from VAT, or are levied at two rates, namely a standard 18% rate and a zero rate.

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