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Hiring in cameroon

Cameroon, officially known as the Republic of Cameroon, is a country in Central Africa. Yaounde is the Capital and the largest city of Cameroon. Agriculture, farming and factory based industry are the main sectors of the economy. Cameroon’s main trading partners are Netherlands, France, China, Malaysia, Algeria, Italy and Spain. Global PEO or Employer of Record (EOR) play a pivotal role in providing companies with services related to hiring employees, and ensuring compliance with Cameroon’s legal and tax regulations. Employment regulations including probation, holidays and termination are covered by the Labor Code. The Labor Code stipulates probationary periods of up to 6 months are allowed, and the agreement must be in writing. All persons with a fiscal domicile in Cameroon shall, in principle, be taxed on their worldwide revenue by Cameroon. Global PEO’s or Employer of Record facilitate companies by ensuring compliance with Cameroon’s Labor Code and tax laws.

statutory labor requirements

Probation Period

  • Probationary periods of up to 6 months are allowed, and the agreement must be in writing.
  • Managerial staff are generally entitled to an 8-month probationary period.

Annual Leave

  • In general, employees are eligible to accrue 1 1/2 days of leave for each month of work. 
  • After 5 years of service, employees are eligible to receive an additional 2 days per month. 
  • Workers who have accumulated more than 12 days of leave may split up their leave, but one portion must equal 12 continuous working days.
  • Workers are also generally eligible to receive 10 days of paid leave for family events.

Public Holidays

  1. New Year's Day (1st January)
  2. Youth Day (in Cameroon) (10th to 11th February)
  3. Good Friday (10th April)
  4. Labor Day (1st May)
  5. National Day (of Cameroon) (20th May)
  6. Ascension Day (21st May)
  7. Eid al-Fitr
  8. Eid al-Adha
  9. Assumption of Mary (15th August)
  10. Christmas Day (25th December)

Maternity Leave

  • Female employees are generally entitled to 14 weeks of paid maternity leave, with 4 weeks to be taken before the birth or 6 weeks if her doctor orders confinement.  
  • Maternity leave is paid for by the National Social Insurance Fund.

Paternity Leave

  • Fathers can use their 10 days of paid family leave for paternity leave.

Sick Leave

  • Employees are generally entitled to at least 5 days of paid sick leave per year.
  • If an employee is injured or becomes ill at work, the employer is responsible for paying for medical treatment.

Work Hours

  • In general, the work week is 40 hours.

Overtime

  • Overtime may occur on a temporary basis for work necessary due to exceptional or seasonal overload of work; the impossibility of finishing work within a fixed delay, and when recruitment of extra staff is not possible.
  • Overtime hours cannot exceed 20 hours per week
  • Overtime is paid at the following rates: -
  • Overtime during the night is at 50% of the hourly salary
  • Overtime rate for the day is as follows: -
    • 8 first hours: 20% of the hourly salary;
    • following 8 hours: 30% of the hourly salary;
    • for the third installment of hours, up to 20 hours per week: 40% of the hourly salary;
    • for overtime work performed on Sundays: 40% of the hourly salary.

Notice Period

  • Notice of termination must be given, the duration of which is set by the Minister in charge of Labor and is based on the seniority and the occupational group of the employee. 
  • During the notice period, the employee is generally entitled to one day off per week to look for another job.

Severance

  • Employees who have worked for at least 2 years are generally entitled to severance pay
  • The amount of pay is determined by the Minister in charge of Labor.

13th / 14th Month Pay

  • No
  • There is no statutory requirement to pay the 13th or 14th month salary.
  • Employees are entitled to a standard rate of holiday after one year of service.

income tax

  • All persons with a fiscal domicile in Cameroon shall, in principle, be taxed on their worldwide revenue by Cameroon.
  • The basis of this tax is the sum of net income from various categories of revenue earned by the taxpayer within one fiscal year.
  • Subject to international conventions to the contrary, personal income tax (PIT) on salaries is calculated by applying the following progressive scale to the overall net income rounded down to the nearest thousand Communauté Financière Africaine francs (XAF):

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

 

  • The net incomes from other activities are subject to income tax at 33%.

deductible expenses

Employment Expenses

  • Cameroon's tax system awards a deduction of business expenses within the limit of 30% of the taxable salary. 
  • Furthermore, the amount destined to settle social contributions borne by the employee is a deductible charge.

Standard Deductions

  • Any individual subject to PIT is granted an annual abatement of a fixed amount of XAF 500,000 for wages and salaries.

Deductible Expenses

Employment Expenses
  • Cameroon's tax system awards a deduction of business expenses within the limit of 30% of the taxable salary. 
  • Furthermore, the amount destined to settle social contributions borne by the employee is a deductible charge.

Standard Deductions
  • Any individual subject to PIT is granted an annual abatement of a fixed amount of XAF 500,000 for wages and salaries.

 immigration

  • All foreign nationals wishing to enter Cameroon must have passports or other valid travel documents to obtain entry visas. 
  • When applying for a temporary entry visa, an individual must present a valid passport, a certificate of accommodation and payment of XAF60,000. 
  • Cameroon does not have a specific quota system for the issuance of visas
  • Tourist visas are granted to foreign nationals who intend to travel in Cameroon. 
  • They are issued by diplomatic embassies or Cameroon consulates abroad. 
  • Tourist visas are valid for 30 days, are not renewable and permit an unlimited number of entries into the country.
  • Business visas are granted to foreign nationals coming to Cameroon to take up technical, industrial or commercial positions. 
  • They are valid for one year, are non-renewable and permit multiple entries into the country.
  • Work permits are valid for two years and are renewable for an unlimited number of times; the renewed permit is valid for two years. 
  • Expatriates may obtain work permits in Cameroon.
  • Following the submission of the necessary documentation, work permits are processed in approximately four to six weeks. 
  • A foreign national may be self-employed if he or she obtains a residence permit. 
  • No minimum amount of capital is necessary to be self-employed.

Type of Visa/Permit

Documentation

Validity

Eligibility

Tourist Visa
  • Valid passport
  • Certificate of accommodation
  • Payment of XAF60,000

30 days
  • Tourist visas are granted to foreign nationals who intend to travel in Cameroon. 

Business Visa
  • Valid passport
  • Completed application form
  • 2 passport size photographs
  • Letter of invitation
  • Business Cover Letter
  • Proof of travel arrangements
  • International Certificate of Vaccination against yellow fever

1 year
  • Business visas are granted to foreign nationals coming to Cameroon to take up technical, industrial or commercial positions. 

Work Permit
  • An original passport that’s valid for at least six months beyond the visa expiration
  • Two visa application forms completed and signed by the applicant
  • Two passport-size color photos
  • A copy of flight and trip reservations
  • A copy of up-to-date vaccination certificates showing a valid yellow fever vaccine
  • A recent bank statement or letter of invitation from you, the employer
  • Paid application and visa fees
  • Certified copies of academic or professional certificates
  • Curriculum vitae (CV)

2 years (can be renewed) 
  • Foreigners seeking employment in Cameroon must apply for a work permit.

 

value added tax

  • VAT shall be levied on natural persons or corporate bodies that automatically, habitually, or occasionally carry out taxable transactions consisting of provisions of services or sales of goods.
  • The total VAT in Cameroon is 19.25%. 
  • Exports are zero rated. 
  • The VAT paid upstream is recoverable, except where otherwise stated.

VAT

Standard Rate

19.25%

Zero Rate

0%

withholding tax

The withholding tax rates in Cameroon are in the following table

Payment

Rates

Dividends

16.5 (a)

Interest

0/16.5 (b)

Rents

15

Royalties from patents, know-how, etc.

15

Fees for technical services, digital services and professional activities

15

Specific payments to resident individuals or companies

5.5 (c) 

Branch remittance tax

16.5 (d)

 

  1. This withholding tax also applies to directors’ fees, non-deductible expenses and adjustments of profits following a tax audit. 
    1. The withholding tax also applies to allowances granted to members of commissions, ad hoc or permanent committees and to members of public, semi-public, regional or local bodies and apply as well to residents and non-residents.
  2. Interest on savings of up to XAF 10 million is exempt from withholding tax. 
    1. Interest on state bonds is exempt from corporate income tax and the tax on movable capital (this tax is withheld at a rate of 16.5% from income on shares and negotiable bonds and from certain other income). 
    2. The 2014 Finance Law confirms that interest on loans paid to non-resident lenders or creditors is exempt from withholding tax. 
    3. Special income tax applies to all types of deliveries that are part of public contracts or orders and that are paid for by state, regional or local authorities, public institutions, public corporations or semi-public companies, or that are paid for through external financing. 
    4. The rate is 15%, which is withheld at source.
  3. This withholding tax applies to non-residents. 
    1. The 2012 Finance Law provides that this tax also applies to “software,” which is defined as computer applications and programs relating to the operation or functioning of an enterprise
  4. This withholding tax applies to fees, commissions, emoluments and remuneration for services that are paid to resident individuals or companies. 
    1. These payments include the following: 
      1. Payments made to persons in the self-employed professions, such as consultants, experts, architects, physicians, auditors in charge of damages, trade intermediaries and salesmen; 
      2. Payments made to magistrates and representatives of the law (attorneys, bailiffs and notaries); 
      3. Payments made to forwarding agents, customs brokers, stevedores, accounting firms and internet service providers

termination

  • Fixed-term contracts may only be terminated for reasons of gross misconduct, force majeure, or written consent of both parties.
  • Indefinite-term contracts can be terminated at any time by either the employer or the employee. 
  • Notice of termination must be given, the duration of which is set by the Minister in charge of Labor and is based on the seniority and the occupational group of the employee. 
  • During the notice period, the employee is generally entitled to one day off per week to look for another job.
  • Employees who have worked for at least 2 years are generally entitled to severance pay; the amount of pay is determined by the Minister in charge of Labor.

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 PIT year-end date is 31 December.
  • The PIT return shall be declared/filed by the 15th day of the month following the payment of wages/salaries. 
  • A regularization shall be declared by 15 March following the fiscal year-end, when filing the Annual Tax Return.
  • The tax administration may send a pre-completed return of collected revenue or any other taxable item, with the tax amount owed, to any natural or legal person paying taxes or duties as per laws and regulations in force. 
  • The taxes payable by the employee shall be withheld at source by the employer, who is responsible for payment to the tax authorities.
  • PIT shall be paid by the 15th day of the month following the payment of wages/salaries. 
  • A regularization of payroll taxes (including PIT) shall be declared and paid by 15 March following the fiscal year-end, when filing the Annual Tax Return.

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 Cameroon ranked 167th 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 equal to 20% of their monthly pay (1.66% of annual salary)
Vacations % Employees are entitled to 18 days of paid annual leave (4.94% 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 14.93%

employer accruals

Additional information (Country Accruals)

   
NSIF

4.20%
Sick leave

1.37%
Maternity leave

2.68%
Vacations

4.93%
Description

For their joint personal welfare, employees are obligated to contribute to the National Social Insurance Fund (NSIF) at a particular rate calculated on the basis of their salaries. This contribution is withheld at source by the employer. The employee contributes only for the portion covering the old age pension, permanent and total disability pension, and survival pension. The rate is 4.2% based on the taxable salary, which shall be capped at XAF 750,000 per month (i.e. XAF 9 million per year). The rate for voluntary insurance for this contribution is 8.4%.

 

Employer Accruals Additional information

    Employment Accruals
Annual Leave In general, employees are eligible to accrue 1 1/2 days of leave for each month of work. This equals 4.9% (18/365 days) of annual income
Maternity Leave Female employees are generally entitled to 14 weeks of paid maternity leave, This equals 26.9% (14/52 weeks) of annual income
Paternity Leave Fathers can use their 10 days of paid family leave for paternity leave. This equals 2.7% (10/365 days) of annaul income
Sick Leave Employees are generally entitled to at least 5 days of paid sick leave per year. This equals 1.36% (5/365 days) of annual income
Overtime Overtime during the night is at 50% of the hourly salary
• Overtime rate for the day is as follows: -
o 8 first hours: 20% of the hourly salary;
o following 8 hours: 30% of the hourly salary;
o for the third installment of hours, up to 20 hours per week: 40% of the hourly salary;
o for overtime work performed on Sundays: 40% of the hourly salary.		 Normal hourly rate is around 2,875 XAF. Overtime is paid at an addition 575 XAF during the first 8 hours of overtime during the day.
Severance Employees who have worked for at least 2 years are generally entitled to severance pay Subjective

 

 

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