EOR | Employer of Record Services in Madagascar defined and regulated by the new labor code
Salary portage or commonly known as the Emplouer of Record Services is a major innovation in the world of work in Madagascar, governed by specific provisions of the New Labor Code. This model allows for the creation of a triangular relationship between a portage company, a salaried employee, and a client company. This section explores in detail the articles of the Labor Code that define and regulate this form of employment.
Understanding the Employer of Record in Madagascar
Employer of Record, as defined by the Malagasy Labor Code, is based on three types of relationships:
1. The Commercial Contract (Article 77, paragraph 1): This contract is established between the umbrella company and the client company, and is governed by the rules of commercial law. This contract determines the terms of the service, the responsibilities of each party, and the payment conditions.2. The Employment Contract (Article 77, paragraph 2): Between the umbrella company and the employee, an employment contract is established, in accordance with the provisions of the Labor Code. This contract may be for a fixed or indefinite period (Article 78) and governs the working conditions of the employee.
3. The Provision of the Employee (Article 77, paragraph 3): The main objective of the employment contract is to make the employee available to the client company to carry out a specific mission. However, the umbrella company remains the legal employer of the employee, although the client company may delegate certain organizational responsibilities.
The Conditions of the EOR, Employer of Record
The Malagasy Labor Code imposes certain strict conditions to guarantee the proper functioning of the Employer of Record, EOR:
- Setting the Salary (Article 79): The salary of the employee is negotiated between the latter and the umbrella company, while respecting the legal provisions in force. This ensures fair remuneration and complies with the standards in place.
- Limitation of Use (Article 80):The client company may only use wage portage for one-off tasks or specific missions requiring particular expertise. This system must not be used to replace a permanent employee, particularly in the context of a strike.
- Termination of Contract (Article 81): The termination of the employment contract between the employee and the umbrella company is governed by Articles 35 to 51 of the Labor Code, thus guaranteeing the rights of both parties in the event of termination of collaboration.
Why Choose Madeinmada as your EOR, Employer of Record?
Madeinmada positions itself as a key player in the salary portage sector, Employer of Record EOR Services in Madagascar. With in-depth knowledge of the legal framework and expertise in human resources management, Madeinmada offers tailor-made support to professionals and companies wishing to benefit from the advantages of payroll management.
Whether you are an expert looking for a specific mission or a company requiring specific skills for a defined period, Madeinmada offers you a flexible and secure solution, aligned with the requirements of the Malagasy Labor Code.
Conclusion
Payroll management in Madagascar, as defined by the Labor Code, represents an opportunity for professionals and companies to collaborate within a well-defined legal framework. With service providers like Madeinmada, payroll management becomes a viable and attractive option to meet the specific needs of the modern labor market.
Services
The team aims to ensure 100% compliance with local laws and legislations and keep each and every partner updated for any changes. Our Services listed below are real Solutions to companies and ngos for their mid or long term projects in Madagascar
Payroll Services Madagascar
Process Payroll Calculations, payroll tax statements, Monthly, Quarterely, Yearly taxes, Employee and Employer contributions, handling of deposits and withdrawals for your employees, Expenses reimbursment, Insurance handling, reporting
Employer of Record (EOR)
PSM is the legal employer of your workers and handle all aspects of compliance from the onboarding to the termination. Handling the employment contract. Processing payroll. Filing employer social contributions. Filing employee taxes
Professional Employer Organization (PEO)
As a co-employer PSM provides real engagement for your business. Our PEO services will allow you to outsource important HR functions. We take some important responsibilities and add real value to your business and activities in order to enhance your bottom line
Employee and Contractor Recruitment
Short-term, mid-term, long-term assignment? Hire an employee or a contractor? Let us help you with quicker hiring and onboarding. We source, we screen, we interview. We handle the short-listing process and you decide the right people for your organization
Payroll Elements
Get to know more about payroll componemts and labour code in Madagascar...
IRSA - Tax on Salary - Income Tax
Impôt sur le Revenu Salarial, withhold and paid by the employer
CNAPS - Caisse Nationale de Prévoyance Sociale
Family benefits, Work accidents and occupational diseases, Retirement
FMFP - Training Contributions
Fonds Malgache de Formation Professionnelle
OSTIE - Employee Health Coverage
Organisation Sanitaire Inter-entreprise d'Antananarivo
FUNHECE - Service Médical Inter Entreprise
Employee Health Coverage, Funds Health Center, FUNRECO Group
Exchange rates - Banky Foibe (Central Bank)
Currency daily Exchange Rates - EUR/USD/GBP to MGA Salary payment
Monthly Payslip delivery to employees -
Signed proof of salary payment - Payment note
Employee Health Insurance Coverage
Employee benefits - Health coverage for employees and families
Expenses Reimbursment - Overheads Management
Employees prepaid expenses coverred by the company
Compensation and Severance Payment
because of a layoff, dismissal or retirement
Madagascar Holidays 2024
12 days of holidays
Entrust us with a mission
We do it simple, friendly and smart! the way we build long-term win-win partnership with you
Frequently Asked Questions
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What is the minimum salary in Madagascar?
Applicable from March 1, 2024, the minimum salary in Madagascar is 262,680 MGA per month
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What is the payroll frequency in Madagascar?
For workers/employees on monthly basis, the payroll is once a month with optional mid-month advance
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In which currency the salaries and wages are paid in Madagascar?
Salaries and wages should be paid in Ariary (MGA - Malagasy Ariary) and to a local bank account
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What is the tax rate applicable in Madagascar for the salary income?
For the installment above 600,000 Ar, the tax rate is 20%. For installment 500,000 Ar - 600,000 Ar, 15%. For the installment 400,000 Ar - 500,000 Ar, 10%. For the installment 350,000 Ar - 400,000 Ar, 5%. For the installment 0 Ar - 350,000 Ar, 0%.
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What are the social contributions in Madagascar?
for the calculation of social charges, the salary is capped at 8 times the minimum salary
CNAPS retirement: salary share: 1% of gross salary - employer's share: 13% of gross salary
OSTIE Health: salary share: 1% of gross salary - employer's share: 5% of gross salary
FMFP professional training: salary share: 0% of gross salary - employer's share: 1% of gross salary -
What are common employees advantage in Madagascar ?
Companies offer mainly health insurance to the employee and his family members and 13th month salary
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What are the basic holidays in Madagascar?
01 January - New Year's Day, 29 March - Martyrs' Day, Easter Monday, Eid al-Fitr, 01 May - Labour Day, Ascension Day, Whit Monday, 26 June - Independence Day, Eid al-Adha, 15 August - Assumption of Mary, 01 November - All Saints' Day, 25 December - Christmas Day. (12 days)