Madagascar Employer of Record & Payroll
What is the main language spoken in Madagascar:
In Madagascar the main language that is spoken is Malagasy and approximately 23% of the population speaks French. Although English is spoken by some locals it is not considered a main language approximately 8% of the population speak English
What type of employment contracts can you offer in Madagascar:
Through our employer of record (EOR) solutions in Madagascar, we can offer the following types of employment contracts
- Fixed Term
- Indefinite term
Contracts and Offer Letters must:
- Be in writing
- Be in the official local language and the local currency
- Include salary/compensation, benefits and termination requirements
Full-time Employees:
- Have specific working terms and conditions
- Can be eligible for organizational perks and/or other benefits
- Tend to be more focused [as only one employer] and familiar with the specific business – due to e.g. ongoing company training etc.
WHAT INCOME IS TAXABLE IN Madagascar:
The Taxable income public or private salaries, wages, fees, allowances and other gains or profits from employment, such as bonuses, premiums, non-cash benefits and all fixed or remuneration / other perquisites, alimony payments provided on a compulsory basis with the exception of those for dependent children.
What income is exempt from taxes in Madagascar:
- Pensions, life annuities in general, and all permanent and temporary allowances received as compensation for damages suffered.
- Allowances and increases for pension
- Salaries attached to the distinction of honor
- Balances of citizens called to serve within or outside the armed forces for the duration of the deployment.
- Retirement indemnity not exceeding one year’s salary
- Medical Expenses
- Family allowances
Standard working hours: Number Overtime to be paid in Madagascar?
In Madagascar, the standard working hours are generally 40 hours per week, spread over 5 or 6 days. Overtime work, performed beyond the regular working hours, is typically compensated at a higher rate as stipulated by the Malagasy Labor Code.
Mandatory contributions in Madagascar?
Employee
| Contribution Type | Contribution Rate | Threshold |
|---|---|---|
|
Social Security Fund (CNaPS) |
5% of gross salary |
Monthly threshold: 1,034,200 MGA |
|
National Health Insurance Fund (CNAM) |
1.5% of gross salary |
No specific threshold
|
|
National Pension Fund (CNAPS) |
2% of gross salary |
No specific threshold
|
Employer
| Contribution Type | Contribution Rate | Threshold |
|---|---|---|
|
Social Security (CNaPS) |
12% of employee’s salary |
Monthly threshold |
|
National Health Insurance (CNAM) |
3% of employee’s salary |
Monthly threshold |
|
National Employment and Vocational Training Fund (FNEF) |
1.5% of employee’s salary |
Monthly threshold |
Social
| Contribution Type | Employers | Employees |
|---|---|---|
|
Social Security (CNaPS) |
Yes |
Yes |
|
National Health Insurance (CNAM) |
Yes |
Yes |
|
National Employment and Vocational Training Fund (FNEF) |
Yes |
Yes |
What is the Maternity and Paternity policy within Madagascar:
- A minimum of 12 weeks (84 calendar days).
- Start no earlier than 8 weeks before the expected delivery date.
- Employee is entitled to receive maternity pay equivalent to her normal wages.
- Complications or illness related to pregnancy or childbirth, additional leave may be granted based on medical certification.
- 10 days per year for family events
What type of leave is allowed in Madagascar:
Annual leave
- In general, employees are entitled to 2.5 days of paid leave per month.
Sick Leave
- In accordance with the Labour Code, a worker is entitled to sick leave for up to 6 months if sickness is certified by a qualified doctor.
Do I need to pay a mandatory bonus annually OR is it discretionary in Madagascar:
Bonuses are mandatory Madagascar and this is made up of 14% of the annual salary pro-rated. The bonus is paid out in December annually. The bonuses amount is determined by the Government and is subject to change with very short notice as we have witnessed in the past.
What Gratuity / Severance payments do you need to provide for Madagascar:
- Before employing your employees in Madagascar, it is always advisable to understand your risk from an employment perspective. Unfortunately, nothing is guaranteed and in the event that you need to terminate for a valid reason, we always suggest that you know what you are in for in the unlikely event you need to terminate.
- Calculated based on length of service and employment type
- Can be from ±8 days to 6 months
- Prior written notice required
- Employees generally entitled to 10 days of earnings per completed service year up to 6 months of earnings
CAN YOU GIVE FRINGE BENEFITS IN Madagascar:
- Canteen expenses up to MGA 5,000
- Car Benefits – used for both professional and personal purposes estimated at 15% of total monthly expenses incurred by the company (Fuel, maintenance, and repairs)
- Housing / Accommodation – 50% of the actual rent or monthly bond payment not exceeding 25% of the fixed remunerations paid in cash
- Phone Allowance – 15% of the total actual monthly expense paid by the employer
Mandatory Probation period of Madagascar
Probationary period is 6 months [maximum]
What are the Corporate and VAT / Sales tax rates in Madagascar:
Corporate Tax Rates: 20% [in general]
VAT / Sales Tax Rates: 20% [on most goods and services]
Public Holidays in Madagascar:
What Industries we support in Madagascar:
- Non-Governmental Organization’s (NGO) / Non- profit
- Engineering & Construction
- Government / Development Agencies
- Oil & Gas
- FMCG & Manufacturing
- Private Equality, Finance, Insurance & Banking
- Mining
- Agriculture
What Double Tax Treaties are in place in Madagascar:
The information provided above is for an “informative decision” and may change at any given time without prior notice. We always suggest speaking to one of our Sales Consultants before engaging in country.
