Employer of Record Guide in 

Madagascar

Your EOR guide in Madagascar

How an EOR arrangement works in Madagascar

Madagascar’s Labour Code calls the three-party employment arrangement portage salarial. The employment company is the worker’s employer; it can delegate organizational authority to the client. The worker has an employment contract with that company, and the client has a commercial contract with it. Keep both documents aligned on the role, assignment, pay, supervision and what happens when the assignment changes.

The employment contract may be indefinite or fixed term, subject to the ordinary contract rules. An indefinite employment contract does not remove the restriction on the client’s use of portage. The arrangement also cannot be used to replace an employee taking part in a lawful strike. Article 82 provides for further rules on permitted jobs and contract conditions; confirm the current implementing requirements for the proposed role before signing. Labour Code, Articles 77–82.

Which route fits the work?

These are arrangement choices, not provider rankings. For the broader model, see what an EOR does. For provider selection, the separate Madagascar EOR comparison profiles options; verify current terms and suitability for your proposed hire.

Discuss your proposed Madagascar hire

Borderless AI offers global EOR services covering employment administration such as contracts, onboarding, payroll and benefits. For Madagascar, first request confirmation of the available local employment route and its scope for your role.

Bring the job description, assignment purpose and expected duration, work location, candidate’s nationality and authorization status, gross salary in Malagasy ariary (MGA), proposed benefits and start date. Request a quote that separates payroll obligations from service fees, and identify the local employing entity and who handles employment changes. Book a discussion.

Pay & Tax

Minimum Wage

For employment from October 1, 2026, Decree No. 2026-1358 sets the M1-1A minimum hiring salary as follows. These are the lowest-category figures; the employee’s actual classification or agreement may require more.

The decree’s annex uses 173.33 monthly hours for the non-agricultural grid and 200 for the agricultural grid. It contains higher professional-category and seniority minima as well. Check the role against the applicable grid before issuing an offer. October wage decree, Articles 1–4 and annex.

The earlier March–September 2026 figures were MGA 300,000 and MGA 304,300. CNaPS’s public SME history still displayed those older figures when checked on October 14. Use the decree that applies to the payroll period, and confirm that the payroll configuration reflects the October increase. Earlier wage decree and CNaPS SME history.

Payroll Cycle

The Labour Code permits daily, weekly, fortnightly, or monthly pay periods. Pay must be regular and made in legal tender in Madagascar; bank or digital payment is permitted. If force majeure delays monthly pay, payment must be made no later than eight days after the normal due date. The employee must receive a payslip in Malagasy and/or French. Labour Code — 91–95

Individual Income Tax

Employers withhold salary income tax, known as IRSA, at source. For 2026, the ordinary monthly scale is progressive:

These are marginal bands, not a single rate applied to the employee’s full taxable income. Payroll should calculate the taxable base and any permitted reductions under the current tax code before withholding. 2026 Finance Law, Article 01.03.16

Tax Residency Criteria

An individual is treated as tax resident in Madagascar if any of these tests is met:

• Madagascar is the person’s principal place of residence for a cumulative 183 days over a 12-month period;
• the person carries out their main professional activity in Madagascar; or
• the person has their centre of economic interests in Madagascar.

Residents are within IRSA on employment income under the territorial rules, including foreign-source income; non-residents are generally taxed on Malagasy-source employment income, subject to an applicable tax treaty. 2026 Tax Code transcription and OECD review

Employer Payroll Contributions

An EOR budget starts with gross salary in MGA, then adds employer-paid obligations and the agreed service fee. Employee deductions reduce take-home pay; they are not a second employer contribution on top of the gross salary.

For an ordinary private-sector employee in the general regime, the contribution rates reported in the CLEISS contribution table as of January 1, 2026 are:

The 19% employer and 2% employee totals apply when all three contributions use the same eligible base. They are not an all-in EOR price or an uncapped percentage of every salary. CNaPS covers retirement, family benefits, work injury and occupational disease. The employer also needs the applicable medical-service affiliation; OSTIE is one such organization.

The social-contribution ceiling is eight times the relevant SME. Applying that rule to the October wage decree gives MGA 2,520,000 per month for the non-agricultural regime and MGA 2,560,000 for the agricultural regime. CNaPS’s SME history describes the eight-times rule but had not reflected the October wage values when checked. Confirm the updated base in payroll. The agricultural regime is a separate payroll case; the general-regime 13% rate should not be applied to it automatically. FMFP’s contribution decree, Article 3, also applies the social-security remuneration floor and ceiling.

For a general-regime monthly gross salary of MGA 1,000,000, assuming that amount is the eligible base for all three contributions, the employer pays MGA 130,000 to CNaPS, MGA 50,000 for the medical service and MGA 10,000 to FMFP. Salary plus these contributions is MGA 1,190,000. The worker’s corresponding social deductions total MGA 20,000 before IRSA withholding. This salary is below the October 2026 ceiling; the example remains a salary-and-contribution illustration, excluding the EOR service fee and other costs.

Budget separately for overtime, agreed benefits or bonuses, expenses, equipment, immigration work where relevant, and termination obligations. Confirm whether the applicable agreement or employment contract requires a 13th-month payment or other extra remuneration. Annual leave and employer-paid maternity obligations also affect planning.

The EOR’s service fee is a separate commercial charge. Request the fee currency and period, what it includes, any setup or offboarding charges, payment and foreign-exchange charges, taxes on the invoice, and funding terms. Borderless’s pricing page describes its general plans; a Madagascar quote must confirm the permitted arrangement and the scope for this hire.

Working Hours

The ordinary limit is 40 hours per week, equivalent to 173.33 hours per month in the general regime. Agricultural work is regulated on an annual basis of 2,200 hours. Employees must receive at least 12 consecutive hours of daily rest and 24 consecutive hours of weekly rest, normally on Sunday. Work between 10:00 p.m. and 5:00 a.m. is night work. Labour Code — 109 and 113–118

Overtime Pay

Hours above the normal weekly limit are overtime. Decree No. 68-172, as amended by Decree No. 72-226, provides at least 30% extra for the first eight overtime hours in a week and 50% for subsequent overtime hours. It also specifies premiums for habitual night work (30%), occasional night work (50%) and daytime Sunday work (40%).

For daytime work on the holidays listed in Article 3, the minimum premium is 50%. May 1 has a separate compensation rule. Do not apply a universal 50% rule to every holiday without checking the governing text. The night, Sunday and listed-holiday premiums do not accumulate with one another; they may combine with overtime premiums as specified in the decree.

Plan overtime with the employment company before the work occurs: the decree also provides for labour-inspector authorization or notification. Apply any more favourable agreement and confirm the rules for the actual schedule. Overtime decree; Labour Code, Articles 109–110 and 391.

Employment Classifications

Madagascar recognizes indefinite-term and fixed-term employment. A fixed-term contract must be written and is reserved for work outside the establishment’s normal and permanent activity, a defined project, an extraordinary temporary increase in activity, or urgent safety work. It must run for at least one month and no more than two years. Article 25 permits two renewals within a total six-year limit and provides for conversion to indefinite employment after two successive renewals. Continued service or a non-compliant fixed term can also become indefinite employment. Confirm the contract status before each renewal.

Part-time employees retain statutory rights on a proportional basis. Telework can be permanent or occasional when documented in a collective or establishment agreement, contract, or addendum. Labour Code — 22–27, 64, and 70–73

Leave Policy

Annual Leave

Employees accrue employer-paid annual leave at 2.5 calendar days per month of effective service, equal to 30 calendar days after a full year. The right to take leave opens after 12 months. The first 15 days must normally be taken continuously within three months after entitlement opens; the remaining portion can be split or, by agreement, accumulated for up to three years.

Leave pay must be at least one-twelfth of the employee’s relevant pay elements from the preceding 12 months. Annual leave cannot be replaced with cash during employment, but unused accrued leave must be paid when employment ends. Labour Code — 125–133

Sick Leave

A medically certified illness can suspend the employment contract for up to six months. Certification should come from the occupational medical service or, if unavailable, an approved doctor. For the main statutory suspension cases, the employer pays a suspension allowance equal to remuneration for up to one month when the employee’s normal notice period is shorter, or for up to the normal notice period when it is longer. A collective agreement or contract may provide more favourable sick pay.

The Code also permits suspension for a child’s illness or hospitalization for up to two months and for a spouse’s hospitalization for up to 15 days, subject to medical documentation. Labour Code — 31–32

Maternity Leave

Maternity leave is 14 consecutive weeks, including eight weeks after birth. Medical complications can extend the post-birth period by up to four weeks. The employee receives full salary: CNaPS pays half and the employer pays half; if the employer did not affiliate the employee with CNaPS, the employer bears the full amount. Maternity leave does not reduce annual leave.

Pregnancy is protected from dismissal except for a legitimate, real, and serious reason unrelated to pregnancy. After return, the employee is entitled to up to one paid hour per day for breastfeeding until the child is 15 months old. Labour Code — 137–146

Paternity Leave

Unless a more favourable agreement applies, a salaried employee who is the legal husband of a woman giving birth is entitled to three employer-paid days of paternity leave, treated as effective working days. Labour Code — 134

Other Leave Types

Family-event permissions of up to 10 days per year do not reduce annual leave, unless a more favourable collective agreement applies. The Code also preserves annual-leave accrual during qualifying occupational injury or disease absences, paternity leave, education leave, a child’s hospitalization for up to two months, a spouse’s hospitalization for up to 15 days, and officially certified participation in a national or international sports competition. The specific pay treatment should follow the governing statutory provision, collective agreement, and contract; confirm the entitlement and pay treatment for the particular family event. Labour Code — 126

Termination

Ending the Assignment and Employment

Ending the client’s commercial assignment and ending the worker’s employment are separate decisions. Article 81 applies the Labour Code’s employment-termination rules to portage employees. The employment company must assess the lawful ground, procedure, notice and payments; the client should provide the business facts and follow its commercial notice terms.

A client’s cancellation does not, by itself, extinguish the employee’s contract or accrued rights. Include employment-ending costs and responsibilities in the commercial agreement before the assignment starts. Labour Code, Articles 35–51 and 81.

Termination Categories

An indefinite-term contract can end through dismissal, resignation, mutual agreement, or force majeure. A dismissal must rest on a legitimate, real, and serious reason, follow the applicable procedure, and be notified in writing with the reasons stated.

A fixed-term contract normally ends at its agreed term. Early unilateral termination is limited to a contractual ground, gross misconduct, or force majeure; otherwise, the initiating party can owe the pay and benefits remaining to the agreed end date.

Economic dismissal has a separate process. The employer must consult employee representatives where present and refer the planned dismissal to the labour inspector before implementation. Labour Code — 35–46

Notice Period Requirements

Ordinary termination of an indefinite-term contract requires written notice unless gross misconduct applies. The minimum depends on both service and professional group:

After three years, add two days for each additional year until the listed maximum. Days are calendar days and months count as 30 days. Group 1 covers elementary or minimally trained roles; Group 2 skilled roles; Group 3 highly skilled roles and junior professionals; Group 4 engineers, managers, and comparable professionals; and Group 5 senior executives. A contract or collective agreement can increase but not reduce these minimums. Decree No. 2007-009

Severance Pay

Statutory severance applies to economic dismissal and termination caused by cessation of the undertaking. It equals 10 days of salary for each completed year of service, capped at six months of salary, unless a contract or collective agreement is more favourable. The base is the employee’s last remuneration, including benefits that are not expense reimbursements. Other dismissal grounds do not automatically attract this economic-dismissal formula. Labour Code — 48

Final Pay Requirements

At cessation of employment, the employer must settle salary earned, compensation for unused annual leave, notice pay when owed, and severance when applicable. The employee must also receive an employment certificate. Arrange these payments and the employment certificate at cessation under the applicable rules. Labour Code — 42 and 50

Statutory Time Off

National Public Holidays

Madagascar sets public holidays by annual decree. The fixed-date and Christian-calendar holidays named for 2026 are:

The annual decree should be rechecked before each calendar year is published. Decree No. 2026-006

Regional Observances

The 2026 decree does not create separate region-specific statutory holidays. It also recognizes Eid al-Fitr, Eid al-Adha, Malagasy New Year, and National Culture Day on dates set through the relevant religious calendar or national consultation. The government can declare one additional paid day by a decree issued at least one week beforehand. Employers should update the payroll calendar when those dates are formally announced. Decree No. 2026-006

Holiday Pay Rules

The 2026 statutory holidays are paid days off. Activities that cannot be interrupted must follow the applicable authorization framework. For work on a holiday, confirm the premium or compensation required by the applicable legislation and any more favourable agreement; the overtime decree distinguishes its listed holidays from the separate May 1 rule.

The annual decree determines any additional paid day. Do not assume an automatic substitute day when a holiday falls on a weekend. 2026 holiday decree and overtime decree.

Onboarding

Required Documentation

Before the employee starts, prepare and collect:

• a written employment contract stating the role, professional category, minimum classification index, salary, and effective date;
• two signed originals, one delivered immediately to the employee;
• identity, address, and payment details needed for payroll and statutory records;
• the worker’s CNaPS number or the information needed to register them at hire;
• evidence of qualifications where the role requires it; and
• a work permit, visa, and related approvals before a foreign national begins work.

The contract can be written in Malagasy and/or French. Fixed-term and probation arrangements must be express and written. Labour Code — 18, 23, 52, and 61

Work Permits & Visas

A foreign national working in Madagascar needs prior labour-authority approval of the employment contract and a work permit under Article 61. EOR employment does not supply those approvals automatically.

EDBM's January 13, 2025 work-permit checklist asks for a reasoned employer application, four original Malagasy-law employment contracts, worker and company information forms, declarations and company records appropriate to the case. The published processing fee is EUR 100, payable in Ariary at the Central Bank's monthly exchange rate; confirm the current fee and documents when preparing the file.

Employment authorization is separate from immigration permission. Confirm the required visa or residence route and obtain the approvals needed before work begins. Supplying an application receipt in a visa file is not proof of permission to work. Labour Code, Article 61; EDBM checklist; immigration requirements.

EOR and Client Responsibilities

Article 77 identifies the portage company as the employer and permits delegation of organizational authority to the client. The allocation below is a practical checklist to agree in the commercial contract; it is not a statement that every liability can be transferred.

The worker must receive the employment contract and provide the information needed for payroll and, where relevant, authorization. The client should identify who answers the worker’s payroll, leave and employment questions.

Employment administration does not by itself settle the client’s corporate-tax, immigration or regulated-business position. Assess those separately when the role’s authority, activities or physical presence make them relevant. Labour Code, Articles 18, 61 and 77–82.

Legal Compliance

Use this sequence before the employee starts:

1. Confirm the actual employment route, role eligibility, applicable authorizations and any sector or collective-agreement requirements.
2. Match the work to the correct professional category and a lawful indefinite or fixed-term contract. Check salary against the current SME and any higher classification or agreement minimum.
3. Finalize the client’s commercial agreement and the worker’s employment contract. State the role, pay, work location, supervision, assignment scope and change process.
4. Complete employer and worker registration, medical-service affiliation and the payroll setup for CNaPS, FMFP and IRSA. Resolve work authorization and immigration requirements for a foreign national.
5. Agree payroll inputs and cut-offs, working-time and leave records, health and safety measures, equipment and any remote-work terms.
6. Confirm which dependencies are complete before agreeing the actual start date. Reassess the route if the assignment becomes an ongoing role or materially changes.

Keep the signed documents and payroll and leave records throughout employment. A monthly salary rhythm does not mean every statutory declaration is monthly: the FMFP decree specifies quarterly training contributions alongside social contributions. Labour Code and CNaPS.

Probationary Periods

Probation is not presumed: it must be written and state the role, duration, salary, and professional category. Decree No. 2007-008 sets initial maximum periods of three months for Groups 1–3, four months for Group 4, and six months for Group 5. Article 391 of the 2024 Labour Code retains earlier regulations where they do not conflict with the new Code, pending replacement; confirm the applicable classification and any replacement text before setting probation. The parties can agree to a shorter period. Probation can be renewed once, but the renewal must be signed in writing before the initial period expires. Continued work without a valid written renewal becomes indefinite employment. Labour Code — 52–54 and Decree No. 2007-008

Other

Worker Classification

The Labour Code looks at the real relationship. For work performed in Madagascar, a person who works for remuneration under another party’s direction and authority is an employee, regardless of nationality, payment method or hours. Some workers paid by task or piece can also be employees when they habitually perform the work personally for an undertaking. A contractor label does not override those facts. Review control, integration, personal service, and economic reality before classifying a worker as independent. Labour Code — 1–3

Cultural Considerations

Use Malagasy and/or French workplace communications that employees can understand, and test policies for equal access rather than relying on cultural stereotypes. The Labour Code prohibits direct and indirect employment discrimination and requires employers to prevent violence and harassment, provide accessible information and training, create a reporting process, protect reporters and witnesses from retaliation, and take corrective action. Labour Code — 6–16

Collective Bargaining

Collective agreements can improve statutory terms, including wages, notice, leave, and trial periods, but cannot reduce mandatory protections. Before finalizing an offer or termination, check whether a sector, establishment, or company agreement applies to the employee’s classification and location. The Labour Code also protects freedom of association and establishes employee-representation and collective-dispute processes. Labour Code

Remote Work Framework

Telework can be permanent or occasional. It should be established through a collective or establishment agreement or in the employment contract or addendum. The document should address equipment, workload and working-time monitoring, and the periods when the employer can contact the employee. The employer should also establish information-security rules and hold a periodic discussion about working conditions and workload. Remote work does not remove the employer’s working-time, health and safety, payroll, or employee-protection duties. Labour Code — 70–73