Hiring your first employee in Africa boils down to three paths: use an Employer of Record (EOR), set up your own local entity, or hire a contractor (only if the role genuinely fits contractor status). Most companies hiring one to a handful of people choose EOR first. Here’s how to do it in order.

Step 1: Decide EOR vs own entity. If you need someone in the next 4–12 weeks and don’t have a local company, use an EOR. Entity setup in countries like Nigeria, Kenya, or South Africa can take 2–6 months and costs thousands in incorporation, registered office, and legal fees. EOR gets you a legal employer in days to a few weeks. Rule of thumb: under ~10–15 employees in one country, EOR is usually cheaper and faster. Above that, run the numbers; your own entity often wins on cost over 18–24 months.

Step 2: Pick the country and confirm work rights. You need to know where the person will be tax-resident and working. If they’re a local national, no work permit. If they’re relocating or a foreign national, someone must sponsor the work permit — often you, sometimes the EOR (confirm in the contract). Countries differ: South Africa has a formal visa process; Nigeria and Kenya have permit regimes that can take 4–12 weeks. Don’t promise a start date until you know permit timeline.

Step 3: Choose salary and benefits in local context. Research local norms. In South Africa, cost to company often includes UIF, pension (if applicable), and sometimes medical aid. In Nigeria, pension (8% employer, 8% employee) is mandatory. Kenya has NSSF and NHIF. Quote in local currency and get a total cost-to-company number from the EOR so you’re not surprised by employer-side contributions. Include any 13th month or bonus customs if you want to be competitive.

Step 4: Contract and compliance. The EOR will issue the employment contract under local law. You agree on role, title, salary, start date, and any benefits. They handle probation rules, leave, and termination clauses to match local law. Review the contract for anything that affects your control (e.g. notice periods, non-compete enforceability). Sign with the EOR; the employee signs with the EOR. You typically have a separate service agreement with the EOR defining your rights to direct work and end the assignment.

Step 5: Onboarding and payroll. Once the contract is signed, the EOR adds the employee to payroll. You provide bank details (theirs or the EOR’s depending on setup). First payment may take one full cycle (e.g. monthly in arrears). Confirm pay frequency (monthly is standard in most of Africa) and what’s included in the invoice (salary, employer taxes, EOR fee). Set up how you’ll communicate role, goals, and performance — the EOR doesn’t manage the person; you do.

Step 6: Ongoing. Keep records of what you agreed (role, salary, benefits). If you change salary or role, do it through the EOR so the contract and payroll stay aligned. When you’re ready to scale or open an office, plan the transition from EOR to your own entity so there’s no gap in employment or benefits.

Do the decision (EOR vs entity) first, lock work rights and total cost, then let the EOR handle the contract and payroll. That’s the sequence that keeps your first Africa hire clean and compliant.