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Establishing & running payroll in Madagascar
If you are planning a Madagascan expansion, one of your first steps will probably be hiring a local workforce. To do this you will generally need a legal entity in the country and will need to establish an in-country payroll and employment infrastructure. This can be a long and difficult process in many cases, taking several months to complete and causing delays.
At Horizons, we specialize in helping organizations spanning all industries expand internationally, including into Madagascar. We can handle your Madagascar payroll outsourcing setup and management, even if you don’t have a legal entity in Madagascar.
Why choose the Horizons payroll solution?
If you have an entity
If your organization has already registered an official entity in Madagascar, then you can outsource your payroll setup and management to us to get expert support and to fast-track your operations.
This level of outsourcing is perfect for larger organizations that are looking to expand into Madagascar long term.
If you don’t have an entity
If you don’t have a registered entity in Madagascar, you can use our full payroll outsourcing service. Our Madagascan subsidiary will act as employer of record for your employees, and our team will handle the HR, administration, and complex legal compliance work.
Choose this service for a low-risk, flexible, and scalable solution for your Madagascan payroll setup and management, with all the benefits of hiring locally and none of the usual complications.
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Madagascar payroll guide
Taxation and withholdings requirements in Madagascar
Both employers and employees in Madagascar must pay a percentage of salaries to social security (13% and 1% respectively) and health insurance (5% and 1% respectively).
Income tax in Madagascar is 20% of income above MGA350,000 per year, or MGA2,000 for incomes below that.
Entitlements and terminations in Madagascar
Employees in Madagascar can be terminated by their employer if given written notice prior to termination. The notice period varies from eight days to six months, depending on the length of service and the type of work they are engaged in.
When severance is due, employees are generally entitled to ten days of pay for every year of service they have completed.
How to establish payroll in Madagascar
In most cases, a foreign organization looking to establish a payroll in Madagascar will need to register an official entity within the country. This can take longer than expected, and you will need to closely adhere to the country’s complex employment regulations.
Alternatively, you can outsource your payroll setup to Horizons and avoid the complex setup and management process. Using our Madagascan subsidiary as your employer of record, you can benefit from our solutions even if you don’t have a legal entity in Madagascar. Additionally, we can set up and run your payroll, HR, compliance, and any other associated work, allowing you to work on successfully expanding your businesses in Madagascar.
Manage payroll in Madagascar
Whether it’s EOR service or just payroll management, Horizons’ employment experts can help you get started in 24h.
