Run your business seamlessly with Neeyamo as we help you go beyond borders to manage your international payroll and hire new talent in Madagascar.
Madagascar boasts of a thriving vanilla industry, known globally for producing some of the finest vanilla beans. With its unique climate and soil conditions, the country consistently produces high-quality vanilla and exports it as well. Madagascar not only produces high-quality vanilla but also produces a high-quality workforce.
Do your organization's expansion plans require hiring employees in Madagascar? Do you lack a physical entity in the country – a key requisite to hire local talent? Neeyamo – one of the top Global payroll providers, assists organizations worldwide with onboarding and managing employees in Madagascar - processing payroll, managing local compliance requirements, benefits, and more.
Tools And Instances
Facts And Stats
Malagasy and French
January - December
Country Calling Code
Handling payroll for a widespread workforce can pose a significant challenge for any organization, and the added complication of compliance can make things worse. If companies spend more time processing payroll, it directly impacts day-to-day operations and their overall productivity.
Over the years, Neeyamo has observed these complexities and strived to provide a global payroll solution through a single technology platform - Neeyamo Payroll. Cloud based payroll service providers, like Neeyamo, assess payroll industry trends and offer a consolidated solution in its Global Payroll Technology Stack, making outsourcing payroll cost per employee easier.
Payroll tax is the percentage amount retained from an employee's salary and paid to the government to invest in the welfare of the general population.
Employers contribute 13% of cash remuneration to the National Pensions Fund, up to a monthly maximum of 13% of eight times the legal minimum salary per employee. Employees contribute 5% of their remuneration to the statutory health organisation and 1% to the National Pensions Fund.
Employee Income Tax:
Income tax on salaries (IRSA) IRSA scale:
- Up to MGA 350,000 in income: 0%
- From MGA 350,001 to MGA 400,000 in income range: 5%
- Between MGA 400,001 and MGA 500,000: 10%
- Between MGA 500,001 to MGA 600,000: 15%
- Above MGA 600,000 income range: 20%
The minimum salary income tax that must be paid in every situation, regardless of income, is MGA 3,000.
Employers contribute up to 13% of eight times the legal minimum salary per employee for social security ("Caisse Nationale de Prévoyance Sociale"), plus 5% of the total amount of taxable remuneration for health contributions.
Undoubtedly, payroll is a critical aspect of any organization. The Pay cycle is a notable feature that provides a sense of accountability for an employee to be paid consistently for their work.
Frequency cycle is Monthly.
13th Month Cycle
There is no statutory law for 13th-month pay in Madagascar.
An Employer of Record service provider helps you get rid of the hassle of handling the complexities that come with setting up a new employee in remote locations. They act as legal employers, facilitate salary payments, and handle everything from health insurance, payroll taxes, and employee benefits to comply with local tax laws and regulations.
This ensures that the client company can focus on the employee’s everyday tasks safely in the knowledge that they have a cost-effective solution as they continue their global expansion.
HR Mandates and Practices
Minimum Wages in Madagascar remained unchanged at 184653 MGA/Month in 2023 from 184653 MGA/Month in 2022. Minimum Wages in Madagascar averaged 155107.60 MGA/Month from 2013 until 2023, reaching an all-time high of 184653.00 MGA/Month in 2022 and a record low of 108019.20 MGA/Month in 2013.
For the first eight overtime hours: 30 percent premium rate; and for the following overtime hours: 50 percent premium rate.
Data Retention Policy
The Malagasy Law No. 2014-038 on the Protection of Personal Data dictates that employee data, considered personal data, must be retained no longer than necessary for the specific purpose for which it was collected. This means companies in Madagascar need to carefully consider the appropriate retention periods for various types of employee data.
Specific Retention Periods:
- Tax and Accounting Data: All tax and accounting data related to employees, including salary slips, income tax records, and social security contributions, must be kept for ten years. This ensures compliance with Malagasy tax regulations and facilitates audits.
- Employment Contracts: Employment contracts and any related amendments must be retained for five years after the employee's termination. This is essential for resolving potential disputes concerning employment terms and conditions.
- Payroll and Social Security Records: Payroll records, including payslips, deductions, and overtime pay calculations, should be kept for five years after each payment. Social security records, such as contributions and benefits, must be stored for three years following the last contribution or benefit payment.
- Legal or Regulatory Data: Certain types of employee data may be subject to specific retention requirements due to legal or regulatory obligations. For example, data related to workplace accidents or investigations may need to be retained for longer periods as mandated by law.
- Beyond the Minimum: In some cases, companies may choose to retain certain types of employee data beyond the minimum legal requirements. This could be for business purposes, such as for analyzing employee performance or conducting internal investigations. However, it's crucial to ensure that such data is kept securely and only accessed by authorized personnel.
Hiring and Onboarding Requirements
- Specialized Qualifications: Specific skills and certifications are often required, particularly for professional and technical positions.
- Experience: Extensive and relevant experience carries significant weight in hiring decisions.
- International Exposure: Prior work experience with international companies is increasingly valued.
- Digitally Savvy: Strong digital skills and knowledge of relevant technologies are highly sought after.
- French and English Fluency: Bilingualism in French and English is becoming a standard requirement.
When onboarding employees in Madagascar, the following documents and procedures are required:
- Written Employment Contract: It is legally required to have a written employment contract in Malagasy or French outlining the terms of the employee's compensation, benefits, and termination requirements.
- Company Registration Certificate: Your company registration certificate issued by the company registrar (RCS) is required.
- Taxpayer Identification Number (TIN): Your company's Taxpayer Identification Number is also necessary.
- Statistical Maps: These maps are required for specific applications.
- Certificate of Absence of Criminal Record: Employees must provide a certificate of absence of criminal record from their country of origin.
- Certificate of Residence: A certificate of residence is needed for some applications.
- Business Visa: For business purposes, a business visa is required for employees planning to work in Madagascar.
- Work Permit: A work permit is necessary for foreign employees to work in Madagascar.
Probationary periods of up to 6 months are allowed with a one-time renewal.
Public Holidays for 2023
- January 1: New Year's Day
- March 8: Women's Day
- March 29: Martyrs' Day (Memorializes those who died in the Revolt of 1947 against the French)
- May 1: Labor Day
- May 25: African Liberation Day
- June 26: Independence Day (Fetin'ny Fahaleovantena)
- November 1: All Saints' Day
- December 25: Christmas Day
- Variable (March or April): Easter Monday
- Variable (July or August): Eid al-Fitr (End of Ramadan)
- Variable (August or September): Id al Adha (Feast of Sacrifice)
- Variable (July or August): Mahavelona, a traditional celebration of ancestors and spirits
In general, employees are entitled to 2.5 days of paid leave per month.
Female employees are generally entitled to 14 weeks of paid maternity leave, at least 8 of which should be taken after the child’s birth. Leave is paid at 50% for employees covered by the labor code and at 100% for public servants.
Employees are entitled to at least five paid sick days per year.
Men are generally entitled to up to 10 days each year for family events.
Employees may be terminated for cause with written notice. The notice period is determined by the type of employment and length of service and ranges from 8 days to 6 months.
In Madagascar, severance pay is not customary, and employers are only required by law to provide very little severance. Severance is only given out in the event that they are let go for financial reasons. In that scenario, they will be paid for ten days of work for every year of service.
The conditions for obtaining a work permit in Madagascar vary based on the classification of your staff. All foreign nationals looking for work, though, will require a work permit. You can sponsor your employees' immigration to the nation and set up their work permits as the employer. Self-employed people must apply for a work permit on their own.
Your employees requesting a transformable visa will require the following documents in addition to a work permit issued and signed by the Ministry of Work:
- An employment contract stamped by the Ministry of Public Service, Labor Administration Reform, and Social Laws (MFPTLS)
- A work permit delivered by the MFPTLS
- A certificate of employment issued by you, the employer
- Your company’s certificate of registration issued by the Registrar of Companies (RCS)
- Your company’s Tax Identification Number (TIN)
- Your company’s statistics cards
Employee Background Checks
Legal and Background Checks
Types of Background Verification Checks:
- Criminal Records Search: Employers can request a criminal record search from the Ministry of Justice. This search reveals any convictions or pending charges against the applicant.
- Civil Court Records Search: This search reveals any civil judgments or lawsuits against the applicant.
- Education Verification: Employers can verify the applicant's educational credentials by contacting the relevant educational institution.
- Employment Verification: Employers can contact the applicant's previous employers to verify employment history and performance.
- Professional Reference Checks: Employers can contact the applicant's professional references to gather information about their character and work ethic.
Last updated on December 21, 2023
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