How to Hire and Pay Employees in Africa (2025/2026 Guide)

Key Takeaways

• Africa is fast becoming the next global hiring hub, offering skilled and affordable talent across tech, operations, and design.

• Labor laws differ by country, so compliance with contracts, taxes, and benefits is critical for long-term success.

• Employer of Record (EOR) or payroll platforms simplify hiring, payroll, and compliance for foreign companies.

• Hiring and paying through a trusted partner like Betternship helps you stay compliant and build reliable teams across Africa.

How to Hire and Pay Employees in Africa?

Hiring across Africa is becoming one of the most attractive moves a growing startup or company can make. 

But hiring employees in Africa isn’t plug-and-play; each country has its own labor laws, payroll systems, tax regimes, and cultural expectations.

In this guide, we’ll walk you through everything you need to know to hire and pay employees in Africa for foreign founders scaling operations, building a remote team, or expanding to new markets.

Why Africa Is a Strong Market for Hiring

Before details, here’s why it’s worth it:

• Talent supply: More universities and bootcamps, many people with remote work experience.

• Cost advantages: Salaries are frequently lower than in developed markets for similar skills.

• Growing demand & infrastructure: Improved fintech, banking, remote work tools, and HR/payroll services.

• Market diversity: Different legal systems, languages, costs — you can pick what fits your model.

With the upside comes complexity. To succeed, you need to plan for legal compliance, payroll, benefits, and cultural fit.

Key Steps to Hiring Employees in Africa

Here are the major steps and considerations when you want to hire employees in different African jurisdictions.

Step 1: Decide Hiring Model & Legal Setup

You have options:

• Hire as an employee: More control, but also more responsibility (legal, tax, benefits).

• Hire as an independent contractor/freelancer: Simpler, but risk of misclassification depending on local law.

• Use an Employer of Record (EOR) or Professional Employer Organization (PEO): They hire under their local entity, handle compliance, payroll, and benefits. Lower risk if you don’t want to set up wholly local operations.

If you plan to have a local entity in-country, you’ll need to register, possibly get licenses, set up local bank accounts, etc. If not, an EOR helps.

Step 2: Check Local Labor Laws & Employment Contracts

Each country will have its own:

• Minimum wage (some have several, depending on region or sector)

• Working hours (standard week, overtime rules)

• Required leave (annual leave, sick leave, maternity/paternity)

• Paid public holidays

• Termination rules and notice periods

• Whether written contracts are mandatory

Also, if you hire foreigners, visa/permit requirements may apply (e.g., work permit, residency). This varies a lot country-to-country.

Step 3: Understand Taxes, Social Security, and Employee Contributions

You’ll need to know what deductions are required from employee salaries and what contributions you, as the employer, are responsible for.

Some examples: 

South Africa: Employers contribute to the Unemployment Insurance Fund (UIF) (1% of gross), Skills Development Levy (SDL) (~1%), etc. Employees contribute to UIF as well. (Playroll)

• Nigeria: Pension contributions (10% by employer, 8% by employee minimum), National Housing Fund, Industrial Training Fund, and possibly health insurance contributions depending on region/company. (PwC Tax Summaries)

You’ll need to account for:

• Employee income tax / PAYE

• Employer social charges (pension, insurance, accident/work injury)

• Other statutory levies or training funds

These obligations often change, so always check the current year.

Step 4: Payroll Frequency, Currency & Payment Method

When you pay your team, these are the levers to think through:

• Currency: Local currency vs. USD (or another stable foreign currency). Paying in USD may help retain talent in high-inflation countries, but comes with FX risk and regulatory oversight.

• Frequency: Monthly tends to be most common in many African countries. Some locales allow weekly or bi-weekly for certain roles. Example: in South Africa, salaried employees are often paid monthly; hourly/wage-based, sometimes more frequently. (Accace Adept South Africa)

• Payment method: Local bank transfers, mobile money, payroll services, and international transfers. Ensure employees can receive their pay reliably and with minimal fees.

• Payslips & record keeping: Most countries require payslips, payroll records, and retention for a number of years. Example: Nigeria requires detailed payroll records kept for a minimum period. (Lano)

Step 5: Benefits, Leave & Employee Rights

Depending on where you hire, you’ll need to offer:

• Annual leave

• Sick leave

• Maternity (and possibly paternity) leave

• Public holidays

• Other statutory benefits, like health insurance or contributions, training allowances, or social security

Make sure contracts reflect these rights. In many countries, not offering them or failing to comply can lead to penalties.

Step 6: Termination & Notice Periods

Employment termination rules also vary, but you should always include them in contracts:

• Probation period

• Notice period for both parties (depends on country and time served)

• Severance or redundancy payments, if mandated locally

• Final pay for accrued leave or unfinished notice

Typical salary ranges in Africa (2025 estimates)

Pan-Africa Trends & Common Issues to Watch

When managing across borders in Africa, many things are similar, and many are distinct. These are patterns worth knowing.

Regulatory Volatility

Tax, foreign exchange, and labor law changes happen regularly. Some governments introduce emergency measures, FX controls, or adjust tax brackets. 

If you’re hiring in multiple countries, stay plugged in (local counsel, payroll partners).

Currency Stability & Inflation

Several African countries have volatile currencies or high inflation. If you pay only in local currency, employees lose value; paying part in a stable currency (or offering inflation adjustment clauses) is sometimes used, depending on local regulations.

EOR / PEO Services Growing

Because setting up local entities is hard and expensive, many foreign founders use EORs or payroll service providers. These platforms help with contract law, tax & contributions, benefits, and payments. They reduce the risk and burden of managing country-by-country compliance.

Cultural & Local Norms Matter

• Public holidays differ by country (and sometimes even by region within a country).

• Local holidays, religious observances, and expectations of leave/time off.

• Work culture: how people communicate, expectations around hours, and remote work readiness.

• Trust & reliability around payments, banking systems, and internet infrastructure.

Example: South Africa vs Nigeria (A Contrast)

To see how countries differ, here’s a comparison of two popular destinations for hiring on the continent:

Practical Tips to Smooth the Process

Here are actionable tips for you as a foreign founder hiring across Africa:

1. Start with one country, refine your template
   Pick one country, get contracts, payroll, and benefits right, then adapt to others.

2. Work with local legal & payroll partners
   Even if you use an EOR, have local counsel to review your contracts, benefits, and payroll obligations.

3. Be transparent with candidates
   Make sure you include all deductions, benefits, leave, and notice periods in the offer.

4. Budget for the total cost of employment
   Don’t just budget base salary. Add in employer contributions, benefits, potential premiums for remote work, compliance costs, and possible FX losses.

5. Use technology & payroll platforms
   Platforms that support local payments, compliance, automated deductions, payslips, and record-keeping will save time and reduce risk.

6. Keep employees’ experience consistent
   Even in different countries, ensure your remote or local teams feel they’re part of the same company culture (communication, recognition, flexibility).

How to Pay Employees in Africa

When it comes to actually disbursing salaries, here are the options and what to watch out for:

• Local bank transfers: Most standard, cheaper fees; good for local currency. But bank reliability, transaction delays, and holiday schedules can matter.

• Mobile money/fintech: In some markets (Kenya, Ghana, parts of East Africa), mobile money is strong and may be a preferred or parallel channel.

• International wire / USD payments: Often used partially or for bonuses, especially if talent expects USD or value pegged income. But watch out for foreign exchange regulations.

• Hybrid arrangements: For example, base pay in local currency, bonuses or “inflation adjustments” in USD or stable currency.

Conclusion

Hiring employees in Africa in 2025/2026 is a powerful growth lever. But to ride the upside, you must move carefully.

If you’re a foreign founder, using an EOR or trusted local partner can save you big headaches. You get access to high-quality talent while staying compliant and focused on growing your business.

Ready to hire your first employee in Africa?

Get started here.

FAQs

• What is the cost to hire employees in Africa?

It depends deeply on the country, skill level, benefits, and whether you use local or foreign currency. Often salary costs are 30-70% lower than U.S./UK equivalents for many tech / remote roles in markets like Nigeria, Kenya, Ghana, South Africa, etc.

• Do foreign companies need local entities to hire in African countries?

Not always. Using an Employer of Record (EOR) or PEO allows hiring employees legally without owning a local entity. But some countries require local registration if you have a physical presence or exceed certain thresholds.

• What taxes and contributions to expect when hiring in Africa?

You’ll generally have PAYE / income tax, employer contributions for pension/social security, health/social insurance, and possibly training levies. Rates vary a lot (see Nigeria vs South Africa above).

• What benefits are legally required in Africa?

At minimum: annual leave, public holidays, sick leave, maternity leave. Many jurisdictions also require contributions to a pension or social security. Some require health insurance, accident insurance, etc.