Understanding Madagascar payroll regulations is essential for organisations hiring locally or through an Employer of Record model. In 2025, employers must navigate a payroll landscape shaped by three key statutory pillars: Madagascar IRSA 2025 (Income Tax on Salaries and Assimilated Income), CNaPS Madagascar (National Social Security Fund), and OSTIE Madagascar (health insurance scheme). Accurate compliance ensures employees receive correct entitlements while companies avoid penalties, delays, or reputational damage.
Whether managing payroll directly or outsourcing, knowing how each system operates and how they integrate is critical for smooth and lawful payroll operations in Madagascar.
Income Tax: Madagascar IRSA 2025
Madagascar IRSA 2025 is the statutory income tax applied to salaries and similar earnings. Employers are responsible for withholding IRSA from employees’ gross pay before disbursing net salaries.
Key points:
- Progressive structure: Rates apply based on income brackets, with thresholds adjusted annually by the government.
- Monthly remittance: Employers must file and remit withheld IRSA to the tax authority by the 15th of the following month.
- Penalties: Late payments incur interest and fines, making timely compliance a non-negotiable part of Madagascar payroll.
Failing to implement accurate IRSA deductions is one of the most common compliance errors, particularly for new market entrants.
Social Security: CNaPS Madagascar
The CNaPS Madagascar system provides social protection for employees, covering benefits such as pensions, workplace injury compensation, and family allowances. Contributions are shared between employers and employees.
Compliance highlights:
- Employer contribution rate: Typically higher than the employee’s portion, as set by national law.
- Monthly declarations: Contributions must be declared and paid on time to avoid penalties.
- Employee eligibility: Accurate registration with CNaPS Madagascar is required for workers to access benefits.
Employers operating in Madagascar should integrate CNaPS compliance into their payroll systems to ensure contributions are automatically calculated and reported alongside other statutory deductions.
Health Coverage: OSTIE Madagascar
OSTIE Madagascar (Organisation Sanitaire Inter-Entreprises) is the national health insurance scheme for private-sector employees. It provides access to medical consultations, treatments, and preventive healthcare.
Key employer obligations:
- Mandatory enrolment: All eligible employees must be registered under OSTIE Madagascar.
- Contribution rates: Shared between employer and employee, calculated as a percentage of gross salary.
- Regular reporting: Employers must submit OSTIE declarations and contributions within the prescribed deadlines.
Failure to comply can result in employees losing healthcare coverage, creating both legal and morale issues.
Data Insight: Madagascar Payroll Compliance Trends
Workforce Africa’s 2024 review of payroll in Madagascar shows that 68% of compliance breaches stem from late or incorrect remittances of IRSA, CNaPS, or OSTIE contributions. Foreign companies without a local partner often underestimate the complexity of synchronising all three systems, particularly when legislative updates are introduced mid-year.
Best Practices for Madagascar Payroll in 2025
- Automate statutory calculations to ensure Madagascar IRSA 2025, CNaPS Madagascar, and OSTIE Madagascar deductions are always accurate.
- Stay updated on legislative changes: rates and thresholds can change annually or mid-year.
- Use local expertise: partner with payroll providers or EOR services experienced in the Madagascar compliance landscape.
- Align internal processes to meet the monthly remittance deadlines for all statutory obligations.
Conclusion
Madagascar payroll in 2025 demands precision, punctuality, and a full understanding of the country’s statutory systems. From calculating Madagascar IRSA 2025 accurately, to meeting your CNaPS Madagascar obligations, and maintaining compliance with OSTIE Madagascar, each step is essential for legal and efficient operations.
Organisations that invest in robust compliance frameworks or partner with providers who specialise in Madagascar’s payroll ecosystem gain a significant advantage. They avoid penalties, ensure employee satisfaction, and protect their reputation in one of Africa’s unique and evolving labour markets.
To stay compliant and navigate Madagascar payroll and labour laws, schedule a free consultation with Workforce Africa!
