Paying independent contractors in Africa header

How to Pay Independent Contractors in Africa: A Comprehensive Guide

Don’t let the complexities of contractor management get to you! Learn how to pay independent contractors in Africa.

Gabriele Culot
Written by Gabriele Culot
March 6, 2024

Key takeaways

  1. Businesses operating in Africa have a diverse range of options when it comes to paying their contractors, each with specific features and limitations
  2. Ensuring contractor relations, including payment and classification, are legally compliant is vital to the success of any business
  3. Understanding the regulatory landscape demands staying informed on tax obligations, including self-employment tax and accurate contractor reporting practices

Africa’s gig economy is booming, and investments from all over the world are flooding into the continent. With this growth, an increasing number of often remote freelancers is offering businesses worldwide a previously unavailable pool of talent.

Leveraging this workforce effectively requires understanding the continent’s unique payment ecosystems, characterized by a preference for mobile money, the importance of local banking relationships, and the increasing adoption of international digital payment platforms.

This guide will help you navigate the complexities of paying independent contractors in Africa, ensuring seamless, compliant, and efficient payment processes that build trust and long-term relationships with your African contractors.

How to pay international contractors in Africa

Mobile money services

Across Africa, mobile money services are a cornerstone of the payment landscape, fueled by their unparalleled accessibility and simplicity. They enable real-time transactions directly from mobile devices and effectively circumvent traditional banking hurdles.


M-Pesa is renowned for bringing financial services to the unbanked populations of Africa. It’s a seamless platform for instant money transfers, bill payments, and access to micro-finance.

  • Exceptional market penetration and acceptance
  • Immediate fund transfers and cash withdrawals
  • Operates independently of bank accounts
  • Service availability and transaction limits can vary between countries
  • Cumulative fees for transactions and cash withdrawals

MTN Mobile Money

As part of the MTN Group’s telecommunication services, it caters to millions across Africa, providing financial inclusion beyond the reach of traditional banking.

  • Broad reach within MTN’s extensive network across Africa
  • Quick and secure transactions for payments and transfers
  • Usable without a local bank account, increasing accessibility
  • Availability and service features can differ significantly across region
  • Transaction fees may be high when withdrawing money

Airtel Money

Airtel Money, by India-based insurance company Airtel, is a digital financing service that allows users to send and receive money, pay bills, and access a variety of financial services directly from their mobile phones.

  • Broad acceptance across businesses and services
  • Instantaneous money transfers and mobile recharge
  • Facilitates bank account integration for additional financial services
  • Service reach and functionality might be limited in areas with lower Airtel penetration
  • Some users may incur fees for transactions and fund withdrawals that accumulate over time

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Bank transfers

For transactions on a larger scale, bank transfers serve as a dependable avenue, with numerous African banks providing tailored online services for direct payments to contractors.


Ecobank offers a broad array of banking services across multiple African countries, making it a prime choice for bank-to-bank transfers, especially for sizable payments requiring secure handling.

  • Ensures high security for transferred funds
  • Ideal for handling large payments
  • Provides direct deposit capability into the contractor’s bank account
  • Necessitates bank accounts for both the payer and payee
  • Could face slower processing for international transfers
  • Incurs fees for cross-border transactions

Standard Bank

Standard Bank, one of Africa’s largest banks, offers comprehensive banking solutions that facilitate smooth cross-continent and international bank transfers.

  • Extensive branch and ATM network across Africa
  • Suitable for both small and large-scale transactions
  • Strong focus on secure and regulated banking practices
  • A bank account is required for both sender and recipient
  • International wire transfers may involve higher fees and longer processing times

Western Union

Western Union enables people and businesses to send and receive money across an impressive network of over 200 countries and territories through physical locations as well as digital platforms

  • Extensive global penetration with a vast network of agent locations
  • Multiple transfer options, including online, in-person, and via mobile app
  • Offers cash pickup, international money orders, and mobile wallet deposits
  • Fees and exchange rates can be less competitive, leading to higher costs for senders
  • Complicated fee structure
  • Transactions may be subject to review and delays

Banking payment frameworks available in Africa

SWIFT transfers

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) offers a network enabling financial institutions worldwide to send and receive information about financial transactions. It’s a standard for international money transfers, including those to and from European countries.

  • Accommodates cross-border payments
  • Allows for the transfer of various currencies
  • Renowned for being secure and reliable
  • Transfers can be expensive due to bank and intermediary fees
  • It may take several days for transactions to clear, especially for currencies needing conversion
  • The need for precise banking information and the possibility of intermediary banks add layers of complexity

Pan-African Payment and Settlement System (PAPSS)

The Pan-African Payment and Settlement System is an initiative by the African Export-Import Bank (Afreximbank) and the African Continental Free Trade Area (AfCFTA) to facilitate payments and settlements for intra-African trade and commerce. It aims to reduce dependency on third currencies for transactions within Africa.

  • Tailored specifically for enhancing commerce within the continent, encouraging economic integration
  • Aims to significantly lower transaction costs associated with intra-African trade
  • Enables settlements in local currencies, reducing the need for currency conversion
  • While powerful within Africa, PAPSS does not extend beyond the continent
  • Its effectiveness relies on widespread adoption by financial institutions across diverse African jurisdictions
  • As a relatively new system, its operational efficiency and full capabilities are still being realized

SADC Real Time Gross Settlement (SADC-RTGS)

Operated by the Southern African Development Community, the SADC-RTGS facilitates real-time settlement of cross-border transactions within the SADC region, aiming to boost financial integration and reduce transaction times.

  • Transactions are settled in real time, enhancing the speed and security of cross-border payments
  • Strengthens financial integration within the Southern African region
  • Primarily serves the SADC region and does not extend globally
  • Requires consistent participation and integration by all SADC member states’ financial institutions for full effectiveness
  • Effective performance depends on the technological infrastructure of participating banks and countries

East African Payment System (EAPS)

EAPS is an initiative by the East African Community (EAC) designed to facilitate cross-border payments within the East African region, aiming to support trade and economic integration.

  • Enhances economic ties and facilitates smoother trade within the EAC
  • Designed to make cross-border payments faster
  • Encourages the use of East African currencies in cross-border transactions
  • Limited its global applicability
  • The success and efficiency of EAPS depend on consistent adoption across EAC member countries
  • As an evolving system, there might be growing pains related to integration and interoperability with existing national systems

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Digital payment platforms

These platforms outshine traditional banks by offering more competitive rates for currency conversion and cross-border transactions.


A global leader in digital payments, PayPal simplifies cross-border transactions, supporting a diverse range of currencies and facilitating direct deposits.

  • Recognized and accepted worldwide
  • Ensures secure transaction processing
  • Comprehensive support for international payments
  • Can impose high fees for currency conversion and international transactions

Wise (formerly TransferWise)

Specializing in international money transfers with transparent fees, Wise is ideal for businesses and contractors working across borders. It supports multi-currency accounts, making receiving and managing payments in different currencies easier.

  • Transparent pricing on currency exchange rates
  • Supports multi-currency accounts
  • Lower fees than traditional banks
  • Not a direct payment processing platform
  • Setup might be complex for some users


Payoneer is a global payment platform that bridges the gap between businesses and professionals by offering a comprehensive solution for effortlessly receiving and managing international payments.

  • Supports transactions in multiple currencies
  • Provides a Payoneer prepaid Mastercard, allowing easy access to funds
  • User-friendly platform with robust customer support
  • Account setup and verification process can be lengthy and complex
  • Fees associated with currency conversion, withdrawal, and account maintenance


Skrill is a versatile digital wallet designed for personal and business use, offering instant online payments and money transfers. Known for its simplicity and wide range of supported currencies, Skrill caters to a global audience.

  • Simplifies sending and receiving money across borders with its digital wallet functionality
  • Competitive fees for currency conversion compared to traditional banks
  • Offers a prepaid card linked to the Skrill account for easy access to funds
  • Not accepted as a payment method in all African countries
  • Some transactions may entail relatively high fees


As a service owned by PayPal, Xoom makes it easy for US companies to send funds from the United States to over 130 foreign countries. It expands the horizons of conventional banking with digital ease and speed.

  • Wide range of countries and currencies supported
  • Instant or very fast transfers to most destinations
  • Conveniently integrates with PayPal, offering secure transactions
  • Transaction fees can be higher than other services, especially for credit card payments
  • Exchange rates may include a markup over the mid-market rate
  • Transfer limits may apply depending on the user’s transaction history and verification status

Afro-focused alternatives to global digital payment platforms

There are several African platforms that have been tailored to meet the continent’s unique financial and technological landscape.


Is designed to make it easier for African businesses to enter the global economy by simplifying the process of currency exchange and money transfers.

  • Offers extensive payment options, including local and international cards, mobile wallets, and bank transfer methods across Africa
  • Easy integration with existing websites and e-commerce platforms
  • Real-time transaction processing and immediate access to funds
  • The platform’s fee structure might be complicated to understand
  • While it has a broad reach, it may not cover all African countries with the same level of service efficiency


This platform allows businesses to accept payments from local and international customers through credit cards, mobile money, or direct bank payments.

  • Easy-to-use interface
  • Supports a wide range of payment methods tailored to African consumers
  • Provides detailed analytics and reports
  • Primarily available in Ghana, Nigeria, and South Africa, limiting its reach
  • Fees can become a significant issue depending on use

Chipper Cash

Chipper Cash is a cross-border payments app offering free, instant African-wide money transfers and the ability to buy airtime and data bundles.

  • Enables free cross-border transactions within and between several African countries
  • Simple and user-friendly interface
  • Availability is limited to a select group of African countries, though it is expanding
  • Customer service concerns have been raised, with some users reporting delays in transaction resolution

DPO Group

DPO Group provides a secure platform for businesses to accept payments in various forms, from credit cards to mobile money and electronic bank transfers, in multiple currencies catering to the African market.

  • Wide range of payment options
  • Secure and PCI DSS-compliant platform
  • Integration options with existing e-commerce setups are plentiful
  • Setup and onboarding for a business can be involved, requiring a degree of technical competence


Zoona is known for delivering electronic financial services to the unbanked and underbanked in Southern Africa. It specializes in helping small entrepreneurs manage their money and grow their businesses.

  • Specializes in cash-in, cash-out money transfers, and agent-managed accounts for individuals and small businesses
  • Has contributed significantly to economic empowerment by providing accessible financial services in underserved communities
  • Offers an intuitive interface and support network
  • Its operation is restricted to a few Southern African countries
  • Focuses more on in-person agent transactions rather than online or mobile app-based services

Other payment methods available in Africa

Beyond the options mentioned above, more traditional methods like cash and checks continue to play a role in the African contractor payment landscape. However, depending on the country, their spread and availability may vary. Moreover, these traditional methods may not mesh well with modern compliance requirements, increasing the risk your business may be exposed to.

✨ Discover how Turing expedited monthly payments from days to an hour for +500 contractors by using Deel.

When we came to understand the importance that Deel places on individual country laws and making sure that contracts are structured in the right way, Deel really stood out. And even though some of your competitors have payments, it wasn’t with the same ease at which we could do it with Deel.

Sudarshan Sivaraman, Head of Customer Success & Sales, Turing

Unique challenges of contractor payments in Africa


The landscape of contractor payments in Africa is as diverse as the continent itself. From mobile money services dominating East Africa to more traditional solutions like physical bank branches and post offices in the North and innovative fintech platforms spreading across West Africa, the options are increasingly numerous. 

However, while this diversity benefits flexibility, it introduces complexity, particularly for businesses looking to engage with self-employed workers across different African regions or with a global team.


One of the primary challenges in facilitating contractor payments in Africa is ensuring that the chosen payment method is accessible to the contractor. Numerous factors, including geographical location, local infrastructure, and personal preference, influence accessibility. 

For instance, while mobile money services like M-Pesa are widely used and accepted in Kenya and Tanzania, their availability and usage might be limited in other regions.

Currency and conversion

Managing local currency fluctuation and conversion fees poses another significant challenge. Africa comprises countries with varying currencies and economic stability, leading to frequent and sometimes unpredictable fluctuations in exchange rates. Additionally, conversion fees can vary widely depending on the payment method chosen. 

Legal compliance

Another challenge businesses must face is navigating the complex web of legal compliance related to contractor payments. Misclassification of full-time employees as contractors can lead to severe penalties, including back taxes and legal repercussions. 

Want to learn more? Our guide to worker classifications has the answers you are looking for. 

Download the guide

Moreover, compliance isn’t solely about classification; it extends to understanding and adhering to the tax obligations and employment laws unique to different African countries. These local laws dictate the documentation required, tax withholding responsibilities, and rights and protections afforded to contractors.

Make sure you are prepared to grow the right way and discover the compliance challenges companies face when growing globally.

Download the guide

Solutions for streamlining payments

To navigate these challenges effectively and ensure contractor’s work is paid fairly and legally, businesses can adopt several strategies, including the ones listed below.

Leveraging local knowledge

Partnering with local financial institutions or fintech platforms can provide valuable insights into the most accessible and widely accepted payment methods and currency conversion best practices in a given region. Such collaborations can be instrumental in tailoring payment strategies that align with local practices and preferences.

Utilizing multi-currency platforms

To mitigate the impact of currency volatility and conversion fees, businesses should explore payment platforms that support multi-currency transactions and offer competitive conversion rates. 

Ensuring legal compliance through expertise

Given the complexity of legal and tax considerations in contractor payments, engaging with legal and financial experts specializing in African labor laws can be a game-changer. These professionals can help businesses structure their contractor agreements to comply with local regulations, manage tax obligations properly, and avoid the pitfalls of misclassification. Additionally, they can keep businesses updated on legal changes and developments that may impact contractor relations.

Payroll compliance checklist_A

Make your payroll management a breeze. Deel just acquired PaysSpace, the leading provider of native payroll solutions in 44 countries across Africa and the Middle East. 

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Managing regulatory and tax obligations

Hiring contractors in Africa requires adherence to local and international tax laws, including understanding the obligations for correctly classifying workers, withholding taxes and VAT, reporting income tax to authorities, and social security mandates. Engage with a local tax professional or service to navigate these complexities effectively and ensure compliance while avoiding common mistakes.

What is misclassification?

Misclassification occurs when an employer incorrectly classifies an employee as a contractor. This distinction is crucial because it affects tax obligations, employee benefits eligibility, and labor law compliance.

Why is it important to avoid misclassification?

  • Legal and financial consequences: Misclassification can lead to penalties, back taxes, and legal repercussions
  • Compliance with labor laws: Correct classification ensures adherence to applicable labor laws, including minimum wage, overtime, and employee benefits
  • Reputation: Proper classification practices uphold a business’s reputation and integrity in its professional relationships and with regulatory bodies

Take Deel’s misclassification test to further mitigate risk

We created a quick test, blending AI and hundreds of real-life misclassification cases, to help you better navigate the correct classification of your workforce.

Take the quiz

The importance of an independent contractor agreement

Having a well-drafted contractor agreement is one of the first steps you should take when beginning a business relationship with self-employed workers in Africa. This document not only defines the scope of the work and the expectations from both parties but also provides a legal framework that can protect the interests of both the hiring company and the contractor. A comprehensive contractor agreement should include the following information:

  • Scope of work: Detailed breakdown of the services to be provided
  • Payment terms: Payment amounts, schedule, and method (e.g., direct deposit, upfront, milestone-based)
  • Duration: Start and end dates of the contract or project milestones
  • Confidentiality and intellectual property rules: Terms regarding the use of confidential information and ownership of work
  • Termination clause: Conditions under which the contractor agreement can be terminated

Download a ready-to-deploy contractor agreement template and skip ahead in the process of setting up compliant work relationships.

Download the template

Supercharge your contractor management with Deel

In the current landscape of business relations, the adherence to employment laws, the clarity of contractor agreements, and the effective management of contractor pay significantly affect the operational success of businesses in Africa. Whether dealing with direct deposit methods, navigating the complexities of payroll processing, or understanding the functionalities of digital payment platforms, the goal remains to foster seamless, compliant, and mutually beneficial relationships between businesses and their diverse workforce.

✨ Discover how Hero Gaming took their payments, HR, and contractor experience to the next level by using Deel.

Through Deel, Hero Gaming has provided contractors with a fantastic working experience with a centralized workflow and flexible payment systems.

Hero Gaming, ,

By integrating a solid understanding of tax forms, regulatory requirements, and the nuances of labor laws into their global payroll systems, business owners can avoid common pitfalls like a misclassified workforce, ensuring compliance and fostering a productive, efficient, and compliant working environment.

Deel offers solutions to all your contractor management wants and needs. Cut the hassle of contractor onboarding and employee benefits administration, the risk of misclassification, and streamline your payroll services for your entire workforce. From easy contract creation to seamless payments, we can handle it all. 

Learn more about Deel

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