Employer of Record in Madagascar

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

Businesses can only operate smoothly in Madagascar if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Madagascar below, to avoid any compliance issues.

Employment Contract Requirements

The employment process adheres to the country's labour regulations, and companies engaging in hiring activities are bound by these legal provisions. A formal agreement, outlining the terms and conditions of employment, is established between the employer and the employee. The employment contract in Madagascar must include essential details, including:

• Employer and Employees details
• Duration of the employment
• Job responsibilities and description
• Conditions under which termination may occur

Onboarding Process

We can help you get a new employee started in Madagascar quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Madagascar

The regular work schedule is 8 hours per day and 40 hours per week, from Monday to Friday.

Overtime in Madagascar

Overtime is defined as any hours worked outside of the standard working hours. Employees can work a maximum of 16 hours of overtime per week. For these additional hours, compensation is set at 130% of the hourly rate for the first 8 hours and 150% of the hourly rate for the subsequent 8 hours.

Probation Period in Madagascar

In Madagascar, probationary periods are not mandatory. However, if implemented, the minimum duration for a probationary period is three months, while the maximum allowed period is six months. During this time, individuals may undergo supervision and assessment before permanent decisions or actions are made regarding their employment or legal status.

Hiring in Madagascar means navigating local labor laws, mandatory employee benefits, payroll taxes, and strict employment regulations. These requirements aren’t always intuitive, especially if your team lacks in-country legal or HR expertise. An Employer of Record steps in as the legal employer for your hires, managing all compliance-related responsibilities. This includes issuing locally compliant contracts, registering employees with relevant authorities, processing payroll, and handling social security contributions and taxes in line with national laws.

By handing over these complexities to an EOR, your business avoids costly compliance errors and the time required to master local employment standards. You can focus on growing your team and operations while trusting that the legal and administrative foundation is solid. Whether you're making one strategic hire or building out an entire team, the EOR keeps you compliant, removes guesswork, and reduces the risk of legal or financial penalties, without requiring you to open a legal entity or maintain a local HR team.

Managing payroll in Madagascar involves understanding and complying with various tax obligations, including income tax (IRSA), social security (CNaPS), health contributions, and the vocational training fund (FNFP). Employers must ensure accurate calculations, timely submissions to authorities, and adherence to due dates to maintain compliance.

Employer payroll contributions are estimated at an additional 18% on top of the employee salary in Madagascar.

For IRSA (salary income tax), employers must submit payments by the 15th day of the month following the salary payment. Utilizing payroll management software, such as Playroll, can help employers consolidate payroll data and stay compliant in Madagascar.

As of January 1, 2025, Madagascar's minimum wage is set at MGA 200,000 per month.

Running payroll in Madagascar is complex, especially when you're hiring without a local entity. Local laws determine everything from tax withholdings and reporting deadlines to benefit contributions and currency requirements. Missteps can lead to fines, payment delays, or unhappy employees. An Employer of Record takes this burden off your plate by handling the full payroll process. Acting as the legal employer, the EOR ensures you remain compliant with all payroll-related obligations, while still allowing you to manage your team’s day-to-day work and performance.

Key Ways an EOR Supports Payroll in Madagascar:

• Compliance Assurance: Ensures payroll aligns with local tax laws, labor regulations, and statutory deadlines.
• Payroll Processing & Tax Management: Calculates salaries, applies correct tax withholdings, and submits required reports.
• Benefits & Social Security Contributions: Manages employer obligations for pensions, health insurance, and other legal entitlements.
• Contract Generation & HR Administration: Drafts compliant employment contracts and supports onboarding, terminations, and HR tasks.
• Currency Payments: Issues timely salary payments in local currency, ensuring employees are paid accurately and on time.

In Madagascar, work permits and visas are essential for employers hiring foreign workers. The process involves submitting applications, providing documentation, and meeting specific eligibility criteria.

Key visa categories include the Short-Term Work Visa for assignments up to 90 days, Long-Term Work Visa for extended employment contracts, and the Specialized Professional Visa for workers with in-demand expertise. Madagascar also offers a Digital Nomad Visa to attract remote workers and entrepreneurs. Employers must ensure compliance with Malagasy labor laws and handle sponsorship responsibilities to facilitate smooth hiring processes for foreign employees.

Mandatory Leave Entitlement in Madagascar

The annual leave entitlement in Madagascar is 30 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Madagascar

Madagascar observes a total of 15 public holidays. These National public holidays include:

Paid Time Off in Madagascar

Employees in Madagascar are entitled to paid leave, which is provided by the employer at a rate of two and a half days per calendar month of service, equivalent to 30 days per year.

Maternity Leave In Madagascar

Pregnant employees in Madagascar get 14 weeks of paid maternity leave. Six weeks are taken before the child's birth, and the remaining eight weeks after. They receive 100% of their average salary, split equally between Social Security and the employer. If there are health issues, they can extend leave by three weeks with full pay.

Paternity Leave In Madagascar

There is no specific provision for paternity leave. However, fathers have the option to take up to ten days of unpaid family leave at their own discretion.

Sick Leave In Madagascar

Employees in Madagascar have the right to paid sick leave for a duration of up to 6 months. During this period, the leave is compensated at 100% of the employee's salary, with 50% covered by the employer and the remaining 50% by Social Security.

Parental Leave In Madagascar

Madagascar does not have specific legal provisions for parental leave. However, employees may have entitlements to maternity leave and paternity leave.

Family Leave

Employees have the right to 10 days of unpaid family leave annually.

Administering employee benefits in Madagascar requires more than just offering a standard package. Local labor laws often mandate specific entitlements, from health insurance to paid leave, and the rules can change without warning. Madagascar also has unique standards for what an attractive, competitive benefits package looks like. For businesses without in-country expertise, meeting these obligations and expectations can quickly become risky and expensive. An Employer of Record acts as your compliance partner, ensuring all benefits are provided according to the latest legal requirements and without administrative strain on your internal team.

Beyond compliance, an EOR brings clarity and consistency to a process that’s often complex and fragmented. They handle enrollments, ensure accurate employer contributions, manage communications with local providers, and keep everything properly documented. This means employees get what they’re entitled to, and you avoid the headache of navigating benefits systems in a foreign market. Whether you're hiring one person or building a larger team, an EOR provides a clear, dependable structure that lets you offer competitive benefits without taking on unnecessary risk or workload.

Termination Process in Madagascar

Both the employer and the employee have the right to terminate the employment contract, but the country has strict laws against illegal termination. Acceptable termination methods include:

• Voluntary resignation by the employee
• Termination by mutual agreement
• Objective grounds
• Disciplinary dismissal

Notice Period in Madagascar

Notice periods in Madagascar can be complex, with the minimum notice set at 1 day and subject to increases based on the duration of employment and the type of employment. If you'd like more information about notice periods in Madagascar, reach out to one of our in-country experts.

Severance in Madagascar

If employees are laid off for economic reasons, they receive severance pay equal to 10 days of salary per year of service, up to a maximum of 6 months of compensation.