Employer of Record Guide in Madagascar
Navigating the hiring landscape in Madagascar can be complex, but with the right insights, you can streamline your process. Discover how to compliantly hire top talent and manage your workforce effectively in this emerging market.
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Key stats and facts
Madagascar's growing economy offers access to skilled professionals in tech and customer service roles, with French and Malagasy as primary languages. Understanding the local market dynamics and regulatory environment is essential for successful expansion into this unique island nation.
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Your EOR guide in Madagascar
From minimum wage structures to payroll cycles and tax obligations, Madagascar's employment regulations require careful navigation. This comprehensive guide breaks down the essential compliance requirements you need to hire and manage employees successfully.
Minimum Wage
Madagascar's minimum wage varies by sector and region. The current minimum wage structure includes different rates for various industries and geographical areas.
| Sector | Minimum Wage (MGA/month) | USD Equivalent* |
|---|---|---|
| General Industry | 200,000 | ~$45 |
| Agriculture | 168,000 | ~$38 |
| Domestic Workers | 180,000 | ~$40 |
| Public Sector | 250,000 | ~$56 |
*Exchange rates fluctuate. Current rate approximately 4,500 MGA = 1 USD
Note for Writer: Please verify current minimum wage rates as these may have been updated under recent labour law reforms.
Payroll Cycle
- Monthly: Standard payment frequency in Madagascar
- Bi-monthly: Allowed with employee agreement
- Payment Date: Must be paid by the last working day of each month
- Currency: All wages must be paid in Malagasy Ariary (MGA)
Individual Income Tax
Madagascar operates a progressive income tax system with the following brackets:
| Annual Income (MGA) | Tax Rate |
|---|---|
| Up to 2,400,000 | 0% |
| 2,400,001 to 5,000,000 | 5% |
| 5,000,001 to 10,000,000 | 10% |
| 10,000,001 to 15,000,000 | 15% |
| Over 15,000,000 | 20% |
Tax Residency Criteria
Individuals are considered tax residents if they:
- Spend more than 183 days in Madagascar during a calendar year
- Have their principal residence in Madagascar
- Have their centre of economic interests in Madagascar
Employer Payroll Contributions
Employers must contribute to several mandatory social security schemes:
| Contribution Type | Employer Rate | Employee Rate | Total |
|---|---|---|---|
| CNaPS (Pension) | 13% | 1% | 14% |
| OSTIE (Work Accidents) | 1-5% | 0% | 1-5% |
| OMAPI (Health Insurance) | 5% | 1% | 6% |
| Total Employer Cost | 19-23% | 2% | 21-25% |
Working Hours
The standard working schedule in Madagascar is:
- Daily Hours: 8 hours per day
- Weekly Hours: 40 hours per week (Monday to Friday)
- Maximum Daily: 10 hours with overtime compensation
- Rest Period: Minimum 24 consecutive hours per week
Overtime Pay
- Overtime Rate: 130% of regular hourly wage for first 8 hours
- Night Work: 130% of regular wage (10 PM to 5 AM)
- Sunday/Holiday Work: 150% of regular wage
- Maximum Overtime: 20 hours per week
Employment Classifications
- Permanent Employees: Indefinite contracts with full benefits
- Fixed-Term Contracts: Maximum 2 years, renewable once
- Probationary Period: Up to 8 months for senior positions, 3 months for others
- Part-Time: Minimum 20 hours per week to qualify for benefits
Annual Leave
- Standard Entitlement: 2.5 days per month worked (30 days annually)
- Accrual: Begins after 12 months of continuous service
- Carry Over: Up to 6 days may be carried to following year
- Cash Out: Unused leave must be paid upon termination
Sick Leave
- Paid Sick Leave: Up to 6 months at full pay, then 6 months at half pay
- Medical Certificate: Required after 3 consecutive days
- Chronic Illness: Extended leave available with medical justification
- Return to Work: Medical clearance required for extended absences
Maternity Leave
- Duration: 14 weeks total
- Pre-Birth: 6 weeks before expected delivery
- Post-Birth: 8 weeks after delivery
- Payment: 100% of salary paid by social security (CNAPS)
- Job Protection: Position guaranteed upon return
Paternity Leave
- Duration: 10 consecutive days
- Timing: Must be taken within 4 months of birth
- Payment: 100% of salary
- Documentation: Birth certificate required
Other Leave Types
| Leave Type | Duration | Paid? | Requirements |
|---|---|---|---|
| Marriage Leave | 3 days | Yes | Marriage certificate |
| Bereavement | 3-8 days | Yes | Death certificate |
| Moving Leave | 1 day | Yes | Proof of relocation |
| Civic Duty | As required | Yes | Official summons |
Termination Categories
Termination for Cause:
- Serious misconduct (theft, violence, insubordination)
- No notice or severance required
- Must follow disciplinary procedures
Termination Without Cause:
- Economic reasons or restructuring
- Performance issues (after improvement plan)
- Requires notice and severance
Notice Period Requirements
Notice periods based on length of service and employee category:
| Length of Service | Notice Period |
|---|---|
| Less than 6 months | 8 days |
| 6 months to 2 years | 1 month |
| 2 to 5 years | 2 months |
| 5 to 10 years | 3 months |
| Over 10 years | 4 months |
Severance Pay
Economic Dismissal:
- 10 days' salary per year of service (minimum 30 days)
- Additional compensation for employees over 50
Performance Dismissal:
- 5 days' salary per year of service
Voluntary Resignation:
- No severance required
Final Pay Requirements
- Final salary and benefits must be paid within 48 hours
- Includes unused vacation pay and any outstanding allowances
- Certificate of employment must be provided
National Public Holidays
| Holiday | Date | Type |
|---|---|---|
| New Year's Day | January 1 | Fixed |
| Martyrs' Day | March 29 | Fixed |
| Easter Monday | Varies | Religious |
| Labour Day | May 1 | Fixed |
| Ascension Day | Varies | Religious |
| Independence Day | June 26 | Fixed |
| Assumption Day | August 15 | Religious |
| All Saints' Day | November 1 | Religious |
| Christmas Day | December 25 | Fixed |
Regional Observances
- Famadihana: Traditional ancestor celebration (varies by region)
- Local Saints' Days: Observed in specific provinces
- Harvest Festivals: Agricultural regions may observe local celebrations
Holiday Pay Rules
- Eligibility: All employees entitled to holiday pay
- Rate: 100% of regular daily wage
- Working on Holidays: 200% of regular wage plus compensatory day off
Required Documentation
Employment Contract Must Include:
- Job title and description
- Salary and benefits
- Working hours and location
- Probationary period terms
- Termination clauses
Employee Documents:
- National identity card or passport
- Tax identification number
- Social security registration
- Bank account details (MGA account required)
- Educational certificates (if relevant)
Work Permits & Visas
Foreign Nationals Require:
- Work permit from Ministry of Labour
- Residence permit from immigration authorities
- Medical certificate
- Criminal background check from home country
Processing Time: 4-8 weeks for complete documentation
Legal Compliance
Labour Code Compliance:
- Contract must be in French or Malagasy
- Minimum wage compliance verification
- Social security registration within 8 days
- Work permit validation for foreign employees
Probationary Periods
- Standard Positions: 3 months
- Technical Roles: 6 months
- Senior Management: 8 months
- Renewal: One renewal permitted for same duration
Worker Classification
Employee vs. Contractor Distinction:
- Control Test: Level of supervision and direction
- Integration Test: How integral work is to business
- Economic Reality: Who bears financial risk
Misclassification Risks:
- Back payment of social contributions
- Penalties up to 200% of unpaid contributions
- Automatic reclassification as employee
Cultural Considerations
Communication Style:
- Indirect communication preferred
- Respect for hierarchy important
- French and Malagasy are official languages
Work-Life Balance:
- Family obligations highly valued
- Religious observances respected
- Flexible scheduling often expected
Collective Bargaining
- Union Presence: Strong in public sector and large companies
- Collective Agreements: Override individual contracts where applicable
- Strike Rights: Protected under constitution
- Consultation Requirements: Major changes require employee consultation
Remote Work Framework
Legal Status:
- Remote work provisions added to Labour Code in 2024
- Written agreement required specifying terms
- Equipment and expense responsibilities must be defined
Tax Implications:
- Remote workers remain subject to Madagascar tax
- Employer must maintain Madagascar social security contributions
- Cross-border remote work requires special permits
Note for Writer: Please verify all regulatory information and current rates before publication, as Madagascar's labour laws have undergone recent updates.
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