Rwanda has built a progressive and transparent tax and social protection system designed to support national development and ensure worker welfare. Employers and employees alike are subject to specific tax obligations and social security contributions under Rwandan law.
1. Pay-As-You-Earn (PAYE)
PAYE is the income tax withheld at source by employers from employees' salaries and wages. The employer remits the withheld amount to the Rwanda Revenue Authority (RRA) every month.
Monthly PAYE Tax Rates (as of 2025):
- 0 – 60,000 → 0%
- 60,001 – 100,000 → 20%
- Above 100,000 → 30%
PAYE must be filed and paid by the 15th of the following month.
2. Rwanda Social Security Board (RSSB) Contributions
All employers must register with the RSSB and contribute to various social insurance schemes for their employees.
a) Pension Scheme
- Employer: 3% of gross salary
- Employee: 3% of gross salary
- Total Contribution: 6%
b) Medical Insurance (formerly RAMA)
- Employer: 7.5% of gross salary
- Employee: 7.5% of gross salary
- Total Contribution: 15%
This provides access to a national medical insurance scheme for formal sector workers.
c) Occupational Hazards Insurance
- Employer only: Between 1% and 2% of gross salary
- The percentage depends on the risk level of the employee's job category.
3. Maternity Leave Benefits Scheme
Introduced in 2016, this scheme allows mothers to receive fully paid maternity leave for 12 weeks, funded through employer contributions.
Contribution Rate:
- Employer only: 0.6% of the employee’s gross salary.
- Employee Not required to contribute
4. Skills Development Levy (SDL)
This levy supports Rwanda's technical and vocational training initiatives, improving workforce skills.
Contribution Rate:
- Employer only: 1.5% of total gross monthly payroll.
SDL is administered by the Rwanda Revenue Authority (RRA) and is payable monthly, alongside PAYE and other tax obligations.
5. Compliance Requirements
Employers Must:
- Register with RRA and RSSB
- Deduct and remit statutory contributions monthly
- Submit monthly declarations via RRA’s e-Tax system
- Maintain accurate payroll and HR records
Penalties for Non-Compliance:
- Fines for late submissions
- Interest on overdue payments
- Legal action for persistent non-compliance