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Hiring in Burundi
Burundi, officially known as the Republic of Burundi, is a country in East Africa. Gitega and Bujumbura are the capital cities of Burundi. Burundi is a low income and under developed country. Agriculture is the primary sector of the economy. Burundi’s main trading partners are China, Saudi Arabia and India. Global PEO or Employer of Record (EOR) play a pivotal role in providing companies with services related to hiring employees, and ensuring compliance with Burundi’s legal and tax regulations. Employment regulations including probation, holidays and termination are covered by the Labor Code. The Labor code stipulates that the probation period cannot exceed 6 months and that employees are entitled to 20 days of paid annual leave. Residents are taxed on worldwide income; non-residents are taxed only on Burundi-source income. Global PEO’s or Employer of Record (EOR) facilitate companies by ensuring compliance with Burundi’s Labor Code and tax laws.
statutory labor requirements
Probation Period
- Probationary period cannot exceed 6 months
Annual Leave
- Labor Law provides 20 days paid annual leave (one and two-thirds of a day for every month of service), after completion of 12 months of continuous service.
Public Holidays
- New Year's Day (1st January)
- Unity Day (5th February)
- President Ntaryamira Day (6th April)
- Labor Day (1st May)
- Ascension Day (20th May)
- Eid al-Fitr
- Independence Day (17th July)
- Eid al-Adha
- Assumption of Mary (15th August)
- Prince Rwagasore Day (13th October)
- Ndadaye Day (21st October)
- All Saints' Day (2nd November)
- Christmas Day (25th December)
Maternity Leave
- The duration of the maternity leave shall be of 12 weeks, with the possibility of extension to 14 weeks, of which at least 6 have to be taken after the birth.
Paternity Leave
- Workers are allowed fully paid paternity leave of 4 days on the birth of a child.
Sick Leave
- Minimally, a worker should be entitled to an income during first 6 months of illness.
- This income should be at least 45 per cent of the minimum wage. (Countries are free to opt for a system which guarantees 60 per cent of the last wages during the first 6 months of illness or even during the first year).
- A worker must be entitled to paid sick leave.
Work Hours
- In accordance with the Labor Code, the normal hours of work are 8 hours a day and 45 hours a week.
Overtime
- In cases of urgent or exceptional work due to a higher demand of work, the employer has the right to extend working time to a limit of 15 hours per week, and 150 hours per year.
- Every hour considered as overtime entitle the worker to the following compensation:
-
- 35% for each of the first two hours worked after the legal weekly working time, or the weekly presence considered as equivalent;
- 60% for each of the following hours.
Notice Period
- Generally, notice period is fixed by collective agreement.
- According to the Labor Code, Minimum length of notice period for termination of employment contract by an employer is
-
- One month if the employee has the seniority (work experience with the firm) of less than 3 years;
- One month and a half (45 days) if the employee has the seniority of 3 to 5 years;
- Two months if the employee has the seniority of 5 to 10 years; and
- 3 months if the employee has the seniority of more than 10 years.
Severance
- In accordance with the Burundian Labor Code, severance pay is not payable to a worker employed on daily wages and when a worker is dismissed for gross negligence.
- In the case of individual dismissals, the rate of severance pay is as follows: -
-
- One average monthly salary for workers with seniority of 3 to 5 years;
- Two average monthly salaries for workers with seniority of 5 to 10 years; and
- Three average monthly salaries for workers with seniority of more than 10 years.
13th / 14th Month Pay
- No
- There is no statutory requirement to pay the 13th or 14th months salary.
- There is no evidence that is customary.
income tax
- Residents are taxed on worldwide income; non-residents are taxed only on Burundi-source income, including income generated from professional activities carried out in Burundi.
- An individual is taxed on employment income, business/professional income and investment income.
- Capital gains other than gains derived by a resident individual as part of business income are classified under a schedule where income is taxed at 15%.
- However, the only capital gains that are taxable for a non-residents are those resulting from the sale of shares in a resident company or an interest in a building located in Burundi.
- Additionally, capital gains on a transfer of real property that is the main residence of the transferor for at least three years, as well as capital gain on a corporate restructuring, are exempt from capital gains tax.
- Employment and business income is taxed at progressive rates up to 30%.
- PAYE is levied on employment income based on a progressive salary scale; the rate is limited to 30% of taxable income.
|
Taxable Income (BIF) |
Rate (%) |
|
0 – 1.8 million |
0% |
|
1 800 001 – 3.6 million |
20% |
|
3 600 001 and above |
30% |
deductible expenses
Personal Deductions
- A deduction from taxable income is allowed for the employee’s contribution to the state pension (INSS).
- Contributions to a qualified pension fund or complementary social security contributions may be deducted from the Pay-As-You-Earn (PAYE) calculation, up to 20% of the employee’s gross income.
- Fringe benefits relating to transportation expenses not exceeding 15% of the basic salary are exempt, unless the employee benefits from a company car.
- Rental or compensatory allowances paid to an employee or on the employee’s behalf may be exempt, but if these benefits exceed 60% of the basic salary, the excess is treated as taxable income. Interest on treasury bills and bonds is exempt from income tax.
Business Deductions
- Expenses incurred may be deducted provided the expense:
-
- Relates to and is necessary for the operation of the taxpayer’s business
- Corresponds to actual expenditure and is duly substantiated by supporting documents
- Reduces net assets
- Relates to the fiscal year in question
|
Deductible Expenses |
|
|
Personal Deductions |
|
|
Business Deductions |
|
immigration
- Some of the main visa categories available in Burundi are as follows: -
-
- Business Visa
- Tourist Visa
- Missionary Visa
- Burundi visas are generally issued for single or multiple entry, valid for up to 90 days, at the discretion of the Embassy of Burundi.
|
Type of Visa/Permit |
Documentation |
Validity |
Eligibility |
|
Business Visa |
|
90 days |
Foreigners who intend to travel to Burundi for business related activities such as meetings must apply for a Business Visa |
|
Tourist Visa |
|
90 days |
|
|
Missionary Visa |
|
90 days |
|
value added tax
- VAT is imposed on the sale of goods and the provision of services, and on imports.
- The standard VAT rate is 18%, with exemptions and zero-rating available in certain cases.
- Telephone calls are no longer subject to VAT or consumption tax.
- A reduced rate of 10% applies to certain imports.
|
VAT |
|
|
Standard Rate |
18% |
|
Reduced Rate |
10% |
|
Zero Rate |
0% |
withholding tax
Withholding tax rates are applied at the following rates:
|
Payment |
Residents |
Non-residents |
|
Dividends |
Exempt |
15% |
|
Interest |
15% |
15% |
|
Royalties |
15% |
15% |
|
Technical and Management Service fees |
15% |
15% |
|
Payments for a performance made to an artist, musician or sportsperson |
15% |
15% |
|
Payments from public tender by public institutions |
4% |
15% |
|
Proceeds from real property, a financial asset or collection of personal property |
N/A |
5% |
termination
- Generally, notice period is fixed by collective agreement.
- According to the Labor Code, Minimum length of notice period for termination of employment contract by an employer is
-
- One month if the employee has the seniority (work experience with the firm) of less than 3 years;
- One month and a half (45 days) if the employee has the seniority of 3 to 5 years;
- Two months if the employee has the seniority of 5 to 10 years; and
- 3 months if the employee has the seniority of more than 10 years.
- In accordance with the Burundian Labor Code, severance pay is not payable to a worker employed on daily wages and when a worker is dismissed for gross negligence.
- In the case of individual dismissals, the rate of severance pay is as follows: -
-
- One average monthly salary for workers with seniority of 3 to 5 years;
- Two average monthly salaries for workers with seniority of 5 to 10 years; and
- Three average monthly salaries for workers with seniority of more than 10 years.
statutory benefits
- These are mandatory benefits as postulated by law
- These include probationary period, annual leave, public holidays, sick leave, maternity leave, paternity leave, overtime pay, notice period, and severance pay
- Statutory benefits also include social security benefits
|
Statutory Benefits |
|
Probationary Period |
|
Annual Leave |
|
Public Holidays |
|
Maternity Leave |
|
Paternity Leave |
|
Sick Leave |
|
Overtime Pay |
|
Notice Period |
|
Severance Pay |
|
Social Security Benefits |
payments and invoicing
- The tax year is the calendar year.
- A different tax year of 12 months is available upon request.
- There is no filing requirement if income has been subject to tax under the PAYE mechanism. Joint filing for spouses is not permitted.
- Tax on employment income is withheld by the employer under the PAYE system, and remitted to the tax authorities within 15 days following the end of the month for which the tax was due.
- Penalties, including fines and interest, apply for failure to comply.
- Before objecting to a notice of assessment, a taxpayer is required to pay 30% of the amount assessed or the undisputed amount of tax, whichever is higher.
ease of doing business
- The ease of doing business index is an index created by Simeon Djankov, an economist at the Central and Eastern Europe sector of the World Bank Group.
- Higher rankings (a low numerical value) indicate better, usually simpler, regulations for businesses and stronger protections of property rights.
- According to the World Bank Burundi ranked 166th in the World in 2019 in terms of ease of doing business.
employee accruals
| Christmas Bonus% | 0% |
| Christmas Bonus Over Vacations % | 0% |
| Severance per Year % | Employees are entitled to severance pay that equals 50% of monthly salary (4.16% of annual salary) |
| Vacations % | Labor Law provides 20 days paid annual leave (5.49% of annual salary) |
| Notice % | Employees are entitled to 30 days of notice period for one year of service or more (8.24%) |
| Christmas Bonus Over Notifications% | 0% |
| Vacations Plus% | 0% |
| Total percentage of Salary (yearly) | The total employment accruals as a percentage of salary per anum are equal to 17.98% |
employer accruals
Additional information (Country Accruals)
| Social security |
6.00% |
| Maternity leave |
12 weeks |
| Vacations |
7.90% |
| Description |
6% of monthly covered payroll; 8.8% for employees in arduous work.The minimum monthly earnings used to calculate contributions are the legal monthly minimum wage.The legal daily minimum wage is 105 Burundi francs in rural areas and 160 Burundi francs in urban areas.The maximum monthly earnings used to calculate contributions are 450,000 Burundi francs. |
Employer Accruals Additional information
| Employment Accruals | ||
| Annual Leave | Labor Law provides 20 days paid annual leave (one and two-thirds of a day for every month of service), after completion of 12 months of continuous service. | This equals 5.47% (20/365 days) of annual income |
| Maternity Leave | The duration of the maternity leave shall be of 12 weeks, with the possibility of extension to 14 weeks, of which at least 6 have to be taken after the birth. | This equals 23% (12/52 weeks) of annual income |
| Paternity Leave | Workers are allowed fully paid paternity leave of 4 days on the birth of a child. | This equals 1.1% (4/365 days) of annual income |
| Sick Leave | Minimally, a worker should be entitled to an income during first 6 months of illness. This income should be at least 45 per cent of the minimum wage. |
This equals 45% of monthly salary multipled by 6 months. |
| Overtime | Every hour considered as overtime entitle the worker to the following compensation: • 35% for each of the first two hours worked after the legal weekly working time, or the weekly presence considered as equivalent; • 60% for each of the following hours. |
Normal hourly rate is around 7375 BIF. Overtime is mostly paid at an additional 2,581.25 BIF. |
| Severance | In the case of individual dismissals, the rate of severance pay is as follows: - • One average monthly salary for workers with seniority of 3 to 5 years; • Two average monthly salaries for workers with seniority of 5 to 10 years; and • Three average monthly salaries for workers with seniority of more than 10 years. |
This equals 8.33% (1/12 months) of annual income |
| Social Security | The contribution to the social security fund is 10% • 6% by the employer and 4% by the employee, capped at BIF450 000 per month, and • an additional 3% contribution by the employer, capped at BIF80 000 per month. |
This equals 10% of annual income |
