6 expert insights on managing your budget when expanding to multiple countries in Africa
- Last updated: April 24, 2025
Scaling across multiple locations Africa is a thrilling venture, but the sheer complexity of the process can quickly transform it into a veritable game of chess – especially where finances are concerned. With different tax laws, salary expectations, benefits regulations, and currency fluctuations across Africa’s 52 countries – every move of yours counts and influences what will happen next.
Questions surrounding top expenses, unexpected costs, as well as the amount of taxes and employer contributions to be paid will begin to crop up as you consider multi-country expansion – and may leave you blindsided.
As an African EOR that has supported hundreds of businesses like yours as they’ve scaled through several African countries, here are our top insights, expert opinions, and insider tips:
1. Understand local payroll regulations and tax structures
Every African country has unique payroll tax obligations and employee contributions requirements. Misunderstanding or overlooking these regulations can lead to non-compliance, which can itself lead to fines, costly lawsuits and a ruined employer reputation – thereby wasting diverting funds that could have been spent on business development.
In Kenya, employers must deduct a maximum of KES 4,320 (approx. $33) from the employees and match the same. In Nigeria on the other hand, the pension contribution is split unevenly between employer (10%) and employee (8%). A company employing workers in both countries must plan for these differences to avoid underbudgeting payroll liabilities – or risk facing the consequences of non-compliance: namely, fines, lawsuits, and a ruined employer reputation.
You can choose to work with an African EOR partner to navigate country-specific compliance requirements and avoid penalties.
2. Plan for currency fluctuations
Payroll budgets can be heavily impacted by currency volatility, especially when salaries are paid in local currencies but are budgeted in a foreign one like USD or EUR. It may be, in some instances, that the amount to be paid is exceeded once converted into a local currency.
For example, a tech firm headquartered in Germany paying remote software engineers in Ghanaian Cedi (GHS) could see cost variations month-to-month due to currency depreciation or appreciation. Without a flexible budget model, this could strain cash flow or impact salary consistency. Once employees’ salaries are impacted, morale goes down and, according to a 2017 study, up to 49% of American workers will start a new job search after experiencing only two problems with their paycheck.
To counter this issue, it is worth looking into the use of multi-currency payroll systems or working with local experts who will be able to smooth over these issues month by month.
3. Account for cost-of-living differences
Salaries and benefits should reflect the local cost of living while maintaining internal equity across regions.
For instance, an HR manager in South Africa may expect a higher salary compared to a similar role in Ethiopia due to higher living costs. Budgeting based on average global benchmarks might lead to over- or under-compensating employees.
You may use localised salary benchmarks to set fair and competitive compensation while keeping budgets realistic. Or you may work with local partners who already have a good understanding of these local realities.
4. Standardise benefits where possible, localise where necessary
While some benefits like remote work stipends or wellness allowances can be standardised, others such as health insurance or pension schemes may need to be localised.
For example, a pan-African fintech company may offer a uniform remote work stipend but provide country-specific medical coverage—private plans in Morocco, Kenya, and employer-sponsored insurance in Ivory Coast for instance.
Africa HR Solutions makes this process even easier through our centralised medical insurance offer: with one medical insurance provider across 46+ African countries.
5. Streamline payroll through centralised technology
Managing payroll manually across multiple countries can be a nightmare of spreadsheets, bank transfers, and compliance reports. To this already complex task, add unexpected changes such as resignations, sick leave, and overtime, and you have costly mistakes waiting to happen.
Take for instance the example of an NGO with staff in Uganda, Tanzania, and Zambia that is used to manage payroll via local accountants in each country. Moving to a centralised EOR platform will allow them greater flexibility, as well as offering them real-time insights into workforce costs.
Partnering with an EOR that offers a unified system across all the African countries you are present in may be the best solution to overcome operational and time issues caused by manual payroll.
6. Plan for expansion and contingencies
Budgeting is not just about managing your current situation, but it also includes planning for future hires, country expansion, as well as economic uncertainty.
Consider the example of a logistics startup looking to expand from Rwanda into the Democratic Republic of Congo (DRC) and Cameroon. That startup would have to budget for setup costs, new employment laws, and onboarding time. Factoring these into the workforce budget reduces surprise costs.
Build flexible budget models that can adapt to hiring surges, inflation, and geopolitical shifts.
How an EOR can help
An Employer of Record (EOR) like Africa HR Solutions simplifies the complexity of onboarding and paying employees in multiple African countries. By acting as the legal employer, we handle local payroll, taxes, compliance, and benefits – freeing you to focus on growing your business.
At Africa HR Solutions, we specialise in multi-country payroll and EOR services across Africa. Whether you’re hiring in one country or eleven, our local expertise and modern payroll technology help you stay compliant, control costs, and scale confidently. Chat with one of our experts today to find out how we can better help you.