Employer of Record in Madagascar

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.

Fiscal Year in Madagascar

1 January - 31 December is the 12-month accounting period that businesses in Madagascar use for financial and tax reporting purposes.

Payroll Cycle in Madagascar

The payroll cycle in Madagascar is usually monthly, with employees being paid by the last working day of the month.

Minimum Wage in Madagascar

The minimum wage for employees in Madagascar is typically 1,065 MGA per hour, amounting to ~184,653 MGA per month for a typical 40 hour work week.

Bonus Payments in Madagascar

There is no statutory law mandating the provision of a 13th-month pay.

Employer Tax Contributions

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

Employee Payroll Tax Contributions

In Madagascar , the typical estimation for employee payroll contributions cost is around 2%.

Individual Income Tax Contributions

The individual income tax in Madagascar follows a progressive rate structure, ranging from 0% to 20%. The tax calculation takes into account various factors, including household status and the number of children, which can influence the overall applicable rates.

Pension in Madagascar

To qualify for a public pension, employees must be 60 years old with at least 15 years of coverage, including 28 quarters of contributions in the 10 years before their normal retirement age.

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 12 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.

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.