Madagascar is an island in the Indian Ocean close to the southeast coast of Africa. If you’re looking for a strategic location for your expansion that’s close to Africa, Madagascar provides the perfect setting.
One challenge of an expansion is setting up payroll. Your company will need to choose between the various Madagascar payroll options, meet the country’s tax laws, and more.
G-P can make your expansion easier. We’ll act as the Employer of Record (EOR) and streamline payroll for all your team members.
Taxation rules in Madagascar
Companies in Madagascar need to contribute 13% of wages to social security and 5% to healthcare. Many employers in the country choose to use a pay-as-you-earn (PAYE) system where they calculate and process taxes on behalf of employees. Companies in Madagascar need to deduct 1% of an employee’s wage for social security, 1% for healthcare, and another 1% for the Fonds Malgache de Formation Professionnelle (FMFP).
Madagascar payroll options for companies
There are 3 different Madagascar payroll options to choose from, including:
- Internal: If you are committed to conducting business long term in the country, you can set up a subsidiary and run an internal Madagascar payroll. Doing so will require a larger HR team and expertise on Madagascar payroll laws.
- Madagascar payroll processing company: Another option is working with a Madagascar payroll processing company. This third-party can outsource your payroll, but you’ll still be held liable for any compliance matters.
- G-P: The easiest way to run payroll in Madagascar and stay compliant is partnering with an Employer of Record (EOR) like G-P. With us, you can rest assured that all employees will be paid on time, freeing you to focus on other important aspects of your business.
How to set up a payroll in Madagascar
Before you can set up your internal Madagascar payroll, you have to incorporate. Establishing a subsidiary in Madagascar can take anywhere from a few weeks to a few months, which can set back your desired timeline.
G-P can help you start working in days, not months. With us, you won’t have to go through the lengthy incorporation process, enabling you to expand with confidence knowing you’re meeting the country’s employment compliance laws and tax obligations.
Entitlement/termination terms
Since terminating an employment relationship can be tricky in any country, we recommend adding entitlement and termination terms to your employment contract before setting up your Madagascar payroll. Employees can get terminated for cause with a written notice period, and the notice period varies by type of employment and length of service.
Streamline global payroll management with G-P.
G-P streamlines each step of the payroll management process with our market-leading Global Growth Platform™. Pay your team with confidence anywhere in the world in 150 currencies with our 99% on-time automated payroll system — all with just a few clicks. Our products also integrate with leading HCM solutions, syncing employee payroll data across platforms automatically to create one reliable, convenient source of truth for HR teams.
Contact us to learn more about how we can support you.