Hire and pay employees in
Madagascar, hassle-free

In Madagascar, the base minimum wage is 238.800 MGA per month. However, minimum wage also varies depending on the sector and years of employment of the employee.

For more details see here

The individual income tax ranges from 0% to 20%. Income tax is calculated according to progressive rates.

The employer cost is generally estimated at 19% of the employee salary.

• CNAPS - Social Security and Pension Fund - 13.0%
• OSIE - Inter-Company Health Organization - 5.0%
• FTMP - Vocational Training Fund - 1.0%

*The maximum monthly salary for the calculation of the employer costs is MGA 1,910,400

Standard working hours are 8 hours per day, 40 hours per week. The standard workweek is from Monday to Friday.

Overtime payment is mandatory and may be included in the salary. Hours outside of standard work hours are considered overtime. Employees can work a maximum of 20 hours of overtime per week. For additional hours, employees are paid:

• 130% of the hourly rate, the first 8 hours.
• 150% of the hourly rate, the following 8 hours.

Employees are entitled to 14 weeks of paid leave. 6 weeks must be taken before the child's birth. The remaining 8 weeks must be taken after the child's birth. The employee will receive 100% of their average salary during this period, Social Security will be responsible for 50% of this payment and the employer the other 50%.

If there are health complications due to pregnancy, the employee can extend leave an additional 3 weeks at 100% pay.

Employees are entitled to paid sick leave for up to 6 months. Illness needs to be confirmed by a doctor from an inter-company medical service and would amount to 100% of the daily pay.

Terminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.

Terminations in Madagascar can be complex. There is no at-will termination in Madagascar for employers and termination must be done for just cause.

Compliant terminations include:

• Voluntarily by the employee
• By mutual agreement
• Unilaterally by the employer based on:
  • Probation period
  • Objective grounds
  • Disciplinary dismissal
  • Performance due to unsuitability for the job
• By the expiration of the contract

In Madagascar, all employees who are terminated due to economic reasons are entitled to severance pay. Severance pay is 10 days of salary per year of service up to 6 months based compensation.

To protect you from unforeseen financial risks arising from terminations, Deel applies a Severance Accrual to all employment agreements in this country.  Deel has extensive expertise in managing litigation risk globally and our Severance Accrual calculation is based on the prevailing common-law or statutory entitlements and local best practices. In the event your employee resigns or is not entitled to severance, all unused amounts will be returned to you.

Full-time employees are entitled to 30  working days of paid time off (PTO) a year. PTO accrues monthly at 2,5 days per month. Employees are eligible for annual leave after 12 months of work, unless otherwise agreed. For part time employees, the right to leave is calculated proportionally based on the time of presence.

Madagascar celebrates 12 public holidays.

National public holidays include:

1. New Year's Day
2. Martyrs' Day
3. Easter Monday
4. Labour Day
5. Eid al-Fitr
6. Ascension Day
7. Whit Monday
8. Independence Day
9. Eid al-Adha
10. Assumption of Mary
11. All Saints' Day
12. Christmas Day

Contracts must be in English and French. They must be in writing and signed by both parties.

A contract must include:

• Name
• Start date
• Length of the employment
• Job description
• Termination conditions