Obligations
The tax law requires that when an employer makes available employment income to an employee the employer must withhold, declare, and pay the PAYE tax to the Rwanda Revenue Authority within 15 days following the end of the month for which the tax was due.
In the case of engaging a casual labourer for less than 30 days during a particular tax year, the employer shall withhold 15% of the taxable employment income of the casual labourer.
The first 30,000 (thousand) RWF of the income earned is taxed at 0%.
Beginning January 2006 employers/employees shall calculate the tax on employees’ taxable income based on the following tax bands and/or using the formulae provided in the table below as applicable. Employers/individuals that declare their own PAYE can build these formulae into their systems in order to compute the tax due.
| TAX BANDS | TAX RATE |
|---|---|
| Frw 0-30,000 | 0% |
| Frw 30,001-100,000 | 20% |
| Frw >100,000 | 30% |
| TAX BANDS | TAX RATE |
|---|---|
| Frw 0-360,000 | 0% |
| Frw 360,001-1,200,000 | 20% |
| Frw >1,200,000 | 30% |
The employer is personally responsible for the correct withholding, declaration and the timely payment to the Rwanda Revenue Authority.
The employer is personally responsible for keeping proper books of account to prove that the tax has been correctly withheld, paid, and accounted for. Under those circumstances where, the employer is not required to withhold and pay the tax, the employee is responsible for registering, declaring, accounting, and paying the tax.
An employer who is not the first employer of an employee must withhold PAYE at the marginal top tax rate of 30%. An individual who receives employment income from more than one employer or who receives incidental employment income such as end of year bonus may file an annual declaration if he wants to claim a tax refund. Only amounts in excess of FRW 5,000 are refunded.
An employee who works for more than one employer is obliged to inform his/her employers specifying which one is his/her first employer. The employer is obliged to ask the employee and confirm that he/she is the first employer.
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