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SALARY PAYMENT IN West African CFA franc
CONTRACT LANGUAGES English, French
PAYROLL TAX 20.4%
PAYROLL CYCLE Monthly
TIME TO HIRE 24 hours
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Senegal is a country in West Africa, on the Atlantic Ocean. The capital is Dakar, on the west coast, where most of the country’s economic activity is produced.
The Senegal economy has faced challenges in recent years due to the global economic situation, with the Covid-19 pandemic as the main culprit. While there was growth of more than 6% per year from 2014 – 2018, 2019 saw only 4.4% and in 2020, GDP growth was only 0.87%. By 2021, the economy was back to 6%+ growth and in 2022, 5%.
The outlook for the Senegal economy in the mid-term points toward gradual recovery to pre-pandemic growth, under the country’s ‘Emerging Senegal Plan’ (Plan Sénégal Émergent, PSE. The main driver of the Senegal economy is services, specifically agriculture. Other industries, namely oil & gas, are expected to play a bigger role in 2035 and beyond.
The population of Senegal is over 17m people, with most of the population concentrated on the west coast. The median age is 19.4, and French is the official language; however, only 1/3 of the population speaks French, where 90% of the population speaks or understand Wolof, a local language.
Senegal has 8 public universities and over 800 private educational institutions. University-level education is taught only in French. Many students study abroad, and those who do most often they go to French-speaking countries to complete higher education.
Senegal might be a good location for hiring employees. With a French-style education system, access to the Atlantic through 4 ports in Dakar (the capital), and expectations of growth in the coming decades, it’s a reasonable place to build a team for companies looking to tackle the African market.
Hiring through a Senegal EOR is the quickest, most compliant method for expanding operations to Senegal.
Horizons’ EOR offers a 360-degree HR outsourcing solution: from recruitment, hiring & onboarding, payroll and benefits administration, and offboarding, you can count on Horizons’ local expertise in Senegal to have a hassle-free employee lifecycle.
Note, a Senegal Employer of Record is also known as a Senegal Professional Employer Organization (PEO).
EOR Platform Hire in Senegal, and pay employees through our platform or app. | EOR Cost Our Senegal EOR solution is the most affordable on the market. | Time-to-hire Fast Senegal onboarding, hire in as little as 12 hours. |
Contracts We draft compliant Senegal labor contracts. | Local benefits We manage all Senegal “Five Insurances” mandatory benefits. | 180+ Countries It doesn’t stop with Senegal — we hire employees globally. |
A Senegal EOR helps companies hire and onboard employees in less than 24h, without the need to open a local entity.
If you want to hire in Senegal using a Senegal EOR, your employees are hired by the Senegal EOR on your behalf. The Senegal EOR will handle payroll & benefits administration, tax deduction & payments, and all other HR formalities, while you retain full control over the daily activities of your employees.
Working with a Senegal EOR offers full compliancy with the local laws of Senegal without you having to have deep knowledge or local HR staff.
There are several potential benefits of using a Senegal Professional Employer Organization:
Mothers in Senegal are entitled to 14 weeks of maternity leave paid at 100% normal salary. 6 weeks are taken before the birth, and 8 weeks after.
Generally, fathers in Senegal are not entitled to paternity leave. Fathers covered by the ‘interprofessional collective agreement’ are entitled to one day of paid paternity leave. Many international employers will offer more as part of the benefits package.
For employees, healthcare is normally covered by the IPM (Institut de Prévoyance Maladie) health fund. The IPM covers 40% – 80% of primary care costs, including vaccinations, hospitalization, and emergency treatment.
Employers enroll employees and their families to the scheme, and the benefits are managed by a choice of funds: health funds, private insurance, or mother and child protection centres. Employees must contribute for a minimum of two months before claiming any benefits.
In addition to the fund entitlements, employees are entitled to benefits if hospitalized.
The cost of medical coverage in Senegal is approximately 6% of the salary, with 3% being paid by the employer and 3% by the employee.
Since only ~22% of employment in Senegal is formal employment (with the rest informal), the number of people covered by the IPM is relatively low. Those not covered by the IPM are covered by the Senegal welfare system, which is organized as a pyramid structure: local / community healthcare as the bottom layer, followed by health centers, specialized health centers, and national hospitals & institutes.
It is possible to have private insurance in Senegal, and to visit private healthcare facilities in-country. Most of the time, private insurance plans are taken out by individuals and are not related to employment. For foreign staff, private health insurance would be expected. However, offering private health insurance could be very attractive to local candidates.
With Horizons Senegal EOR, you can offer employees in Senegal affordable private health insurance options.
All employees in Senegal who are not civil servants are covered by the general social security program (Régime general de retraite). This is available voluntarily for employees over the age of 40 with at least 5 years of contributions under the mandatory coverage scheme.
Pensions in Senegal are based on a points system. Points are calculated by dividing the amount of contributions by the ‘reference salary’, a number determined by the Social Insurance Institute of Senegal.
The requirements for the General social security program follow:
Old-age pension: Age 55 – 60 (depending on difficulty of work conducted) with 400 points. For non-civil-service employees, employment must end when the pension is collected. For the complimentary program, available only to civil servants, employment can continue until age 60 (without accumulating additional points). If an employee has 400 points at age 53, they may retire early with a reduced pension.
Old-age settlement: A lump sum to be collected at age 55 – 60 (depending on difficulty of work conducted) with less than 400 points. Employment must end when the settlement is collected. For the complimentary program, available only to civil servants, they may retire at age 55.
Disability pension: For those aged 53+ and assessed by a Social Insurance Institute doctor as being disabled. Full old-age pension can be collected if the doctor determines the employee is, in fact, disabled.
Survivor pension: For the family of a deceased pensioner. Eligible survivors include:
Funding for general pensions comes from a combination of employee and employer contributions.
Employer: 8.4% of monthly payroll amount, to a maximum (for the calculation) monthly salary amount of 360,000 CFA francs.
Employee: 5.6% of monthly payroll amount, to a maximum (for the calculation) monthly salary amount of 360,000 CFA francs.
A Senegal EOR will make sure all contributions are made on time and all pensions are paid according to local law. This increased focus on compliance (performed entirely by the EOR) protects companies from civil litigation or hefty government fines.
Quick, compliant hiring in 24 hours—no subsidiary required.
Payroll tax in Senegal generally refers to Senegal social security tax. It is represented as a percentage of employee salary that is paid to the Senegal government in addition to the salary & benefits payments made to the employee.
For employers, the payroll tax of Senegal include:
For a total of 20.4% of gross annual income paid by the employer.
For employees, the total contribution amount would be 13.1% of gross annual income.
Income tax in Senegal refers to individual income taxes paid by employees on gross income earned.
The Senegal income tax system is a progressive tax system, with rate ranging from 0 – 43%.
Senegal, in West Africa, is a relatively stable with an economy focused on the services and agriculture industries. Over the next two decades, the oil & gas export industry is expected to grow. For companies looking to hire in West Africa, Senegal is a good choice – even more so for companies from French-speaking headquarters.
Hiring through a Senegal EOR is the quickest, most affordable, and most easily compliant way to hire in Senegal. The Senegal EOR will take all the HR & administrative burden, including all matters related to local employment law, so your company can focus on its core business. Get in touch if you’d like to know more about Horizons’ Senegal EOR
With Horizons, you get quick service, transparent pricing, and expert support.
Generally speaking, the terms “Senegal PEO” and “Senegal EOR” are used interchangeably.
A Senegal EOR is an excellent choice for international businesses seeking to hire and pay employees in Senegal in full compliance with tax and labor laws. It saves up to 85 percent of the cost of setting up a local subsidiary — the key alternative option.
