The ABC of African payroll The ABC of African payroll

The ABC of African payroll
31 Dec 2014

It’s no secret - international payroll of today is drastically different to ten years ago. Advances in the internet capabilities and accessibility makes operating multiple payrolls around the world slightly less complicated.

Cloud computing has made the world a smaller place. Think about what you can do with internet access today. With the click of a button, you can hold a conference call with three different people from three different countries around the world. Imagine what this is doing to the capabilities of international payroll.

Old challenges

As little as five years ago, a payroll manager at company ABC in Anywhere, USA would spend their work life and the company budget on international calls to multiple locations in Africa where the company is operating payrolls. (Keep in mind there are over 2,000 different languages spoken in Africa and four different time zones.) The payroll manager would call Mauritania, Algeria, Angola, Botswana, South Africa, Tanzania, Ethiopia and Madagascar, to name a few countries.

Needless to say, there was a very small window to get all the payroll changes made in each local country, correctly, compliantly and securely. Often payroll managers would also have the challenge of processing payrolls using software that was created for the local country (not always in English) as well as trying to understand the local country tax tables and employment law.

The payroll manager for company ABC in Anywhere, USA is constrained by the in country software and confined to an in-country service provider’s resources, knowledge and expertise. But how can you be certain that they have your company’s best interest in mind and that your employees are being paid correctly? How do you know the tax filings and payments are being made?

Any information pertaining to that local payroll must be harvested from the local ICP. You must go directly to the individual ICP’s for any necessary reports, payment and filings (keeping local business hours, local language restrictions and local compliance regulations in mind).

If you are represented in more than one African country, you will either have a global outsource partner doing the coordination for you or have different ICP partners where you have to coordinate the data for the management team. This means different relationships with offices that may use different software, provide different reports and operate in different time zones.

A simple request can take days to complete. Managing information and ensuring compliance becomes a nightmare and that’s not even including expatriates!

All the expatriate calculations, gross to net, dual tax certificates and currency conversations are still your responsibility and for a lot of companies a manual calculation or an expensive trip to the auditors/accountants.

Global companies should weigh up the pros and cons of outsourcing payrolls in Africa based on their individual needs. Companies may want to ask themselves the following questions

• Do we have the internal resources to dedicate to our global payrolls?
• Are we confident that we are operating compliantly in country?
• How important is it to us to have a single source contact?
• How important is it to us to work with providers in our native language?
• Are we big enough that the details matter? (No matter how big or small your company is, details matter when operating payroll).
• Do we trust the local ICP that we have contracted?
• Can we really handle this internally?

Payroll in Africa today

Due to the advances to the infrastructure in many African countries and the growing access to the internet, payroll in Africa is entering a new era. Many countries are offering the ability to e-file tax payments through their secure websites and are offering resources on their websites in multiple languages. (With recent advances, local governments now have the opportunity to ‘smoke out’ non-compliant companies.)

Global outsourcing partners and internal company payroll departments now have the ability to move across most of Africa and deliver payrolls with more ease than five years ago. With advances in new cutting edge payroll technology, it is possible for one payroll software programme to process up to 35 African countries on a single cloud based platform. This means:


• One log in access no matter how many countries are involved
• All reports can be rolled up to global company totals
• Payroll can be administered from America utilising the cloud based software

• Payroll based in local currency and US dollars
• Dual tax certificates are available. Overall, the entire global payroll arena is changing. Companies now have more options when thinking about going global and have more resources to call upon, creating more global opportunities.

By Ian Hurst and Amber Smith, Purely Payroll Africa

It’s no secret - international payroll of today is drastically different to ten years ago. Advances in the internet capabilities and accessibility makes operating multiple payrolls around the world slightly less complicated.

Cloud computing has made the world a smaller place. Think about what you can do with internet access today. With the click of a button, you can hold a conference call with three different people from three different countries around the world. Imagine what this is doing to the capabilities of international payroll.

Old challenges

As little as five years ago, a payroll manager at company ABC in Anywhere, USA would spend their work life and the company budget on international calls to multiple locations in Africa where the company is operating payrolls. (Keep in mind there are over 2,000 different languages spoken in Africa and four different time zones.) The payroll manager would call Mauritania, Algeria, Angola, Botswana, South Africa, Tanzania, Ethiopia and Madagascar, to name a few countries.

Needless to say, there was a very small window to get all the payroll changes made in each local country, correctly, compliantly and securely. Often payroll managers would also have the challenge of processing payrolls using software that was created for the local country (not always in English) as well as trying to understand the local country tax tables and employment law.

The payroll manager for company ABC in Anywhere, USA is constrained by the in country software and confined to an in-country service provider’s resources, knowledge and expertise. But how can you be certain that they have your company’s best interest in mind and that your employees are being paid correctly? How do you know the tax filings and payments are being made?

Any information pertaining to that local payroll must be harvested from the local ICP. You must go directly to the individual ICP’s for any necessary reports, payment and filings (keeping local business hours, local language restrictions and local compliance regulations in mind).

If you are represented in more than one African country, you will either have a global outsource partner doing the coordination for you or have different ICP partners where you have to coordinate the data for the management team. This means different relationships with offices that may use different software, provide different reports and operate in different time zones.

A simple request can take days to complete. Managing information and ensuring compliance becomes a nightmare and that’s not even including expatriates!

All the expatriate calculations, gross to net, dual tax certificates and currency conversations are still your responsibility and for a lot of companies a manual calculation or an expensive trip to the auditors/accountants.

Global companies should weigh up the pros and cons of outsourcing payrolls in Africa based on their individual needs. Companies may want to ask themselves the following questions

• Do we have the internal resources to dedicate to our global payrolls?
• Are we confident that we are operating compliantly in country?
• How important is it to us to have a single source contact?
• How important is it to us to work with providers in our native language?
• Are we big enough that the details matter? (No matter how big or small your company is, details matter when operating payroll).
• Do we trust the local ICP that we have contracted?
• Can we really handle this internally?

Payroll in Africa today

Due to the advances to the infrastructure in many African countries and the growing access to the internet, payroll in Africa is entering a new era. Many countries are offering the ability to e-file tax payments through their secure websites and are offering resources on their websites in multiple languages. (With recent advances, local governments now have the opportunity to ‘smoke out’ non-compliant companies.)

Global outsourcing partners and internal company payroll departments now have the ability to move across most of Africa and deliver payrolls with more ease than five years ago. With advances in new cutting edge payroll technology, it is possible for one payroll software programme to process up to 35 African countries on a single cloud based platform. This means:


• One log in access no matter how many countries are involved
• All reports can be rolled up to global company totals
• Payroll can be administered from America utilising the cloud based software

• Payroll based in local currency and US dollars
• Dual tax certificates are available. Overall, the entire global payroll arena is changing. Companies now have more options when thinking about going global and have more resources to call upon, creating more global opportunities.

By Ian Hurst and Amber Smith, Purely Payroll Africa