Navigating the complex labour laws governing employment practices is essential when running Morocco payroll. However, building an in-house compliance team may not be the most efficient way to manage your remote team’s payroll in Morocco.
Regardless of size, global companies need help to secure in-country expertise for localised payroll service. This is where a partner like Workforce Africa provides significant value in supporting global firms to maintain compliance when handling payroll in Morocco, addressing every intricate detail, including;
- Salary computation requirements,
- Taxation legislation specifics (social security, employee income tax, corporate tax, VAT and other employee deductions.
- Benefits administration, and more (health insurance, pension, paid leaves, holiday compensation.
Workforce Africa simplifies hiring and payroll compliance for offshore talent management in Morocco. No need for a subsidiary or entity setup. From contracts and onboarding to taxes, payroll, and admin tasks, partnering with us – a payroll firm in Morocco will help you focus on growth for greater levels of success.
Morocco Country Overview
The Kingdom of Morocco lies in North Africa. It is predominantly an Arabic-speaking country. Two critical cities in Morocco are Rabat, the capital, and Casablanca, the economic hub. These urban centres act as transit points to ecotourism destinations and beach resorts. With a population exceeding 38.1 million people, Morocco boasts a significant demographic presence.
In recent years, key industries experiencing growth include phosphate materials, agriculture, and tourism. Morocco boasts a market-based, diversified economy comprising oil and gas, fish processing, agriculture, mining, and services. Considerations such as the low labour cost and abundant natural resources make Morocco attractive for businesses seeking expansion opportunities.
Although Morocco possesses a highly skilled workforce, hiring and establishing a team can be time-consuming and challenging. However, partnering with an Employer of Record (EOR) or Professional Employer Organisation (PEO) in Morocco facilitates swift market entry. It manages all legal complexities associated with operations in the country.
Payroll Processing in Morocco
Local labour laws in Morocco govern payroll processing, with each employee’s salary potentially calculated differently. Due to compliance concerns, processing payroll at scale can become complex, cumbersome, and risky. Here are the phases of payroll processes global businesses should understand-:
Pre-payroll Phase
Your organisation’s unique approach to payroll compliance shapes its policies and processes, including payroll preparation. Global firms must prioritise essential business elements in the pre-payroll phase, such as accurate business profile documentation and tailored work location policies, which is crucial. Customise leave and work policies to align with local standards in Morocco to ensure compliance and transparency while collaborating closely with compliance teams or partners to help adhere to statutory requirements throughout the payroll management process for your remote team.
In this phase also, standardising compensation packages to conform with local payment norms, such as payment cycles, which enhance compliance and meet employee expectations, is necessary.
Payroll Calculation Phase
Streamlining input collection and validation processes ensures accurate wage calculations in this phase of payroll processing. This phase involves the actual calculation of wages, with a primary focus on this task. Utilising software automation and digital document submission tools makes payroll calculations efficient and reduces the risk of human error in this process.
Post-payroll Phase
The post-payroll phase in Morocco refers to the period after payroll processing, where employers review and settle any outstanding issues related to employee compensation, benefits, and taxes. This phase typically includes: salary payment, compliance reporting, benefit administration, audit and reconciliation.
The post-payroll phase is crucial in Morocco as it ensures that employers comply with regulatory requirements, maintain a good employer-employee relationship, and reduce the risk of penalties or fines associated with non-compliance.
Payroll Components in Morocco
Here are some aspects comprehensively needed to navigate Morocco’s payroll compliance:
- Salary/Wages
- Overtime benefits
- Social security contribution
- Paid leaves
- Paid holidays
- Payroll taxes
- Other laws
Navigating Morocco Payroll Compliance
Morocco’s employment regulation primarily revolves Labour Code — Law no. 65-99 of September 2003, along with pertinent sections of other laws and acts. The Labor Law outlines critical aspects of payroll processing and compliance with crucial employment practices:
Salary/ Minimum Wage
The current minimum wage set for the public Sector is MAD 3,500/month and MAD 2,902 per month for the private sector.
Overtime Benefits
The standard workweek in Morocco consists of 40 hours, typically spread over 8 hours per day from Monday to Friday. Most businesses, offices, and establishments operate from 9 AM to 5 PM. The number of overtime hours paid is at least +50% of the normal price and must not exceed 32 hours per month.
Social Security Contribution
Employees contribute a total 6.74% while employers contribute 21.09% of employees’ salary.
Health Insurance
Assurance Maladie Obligatoire (AMO) – Mandatory Health Insurance. Employer’s Contribute 4.11% of the basic salary, and Employee’s Contribute 2.26% of the basic salary. AMO provides insured individuals and their dependents with partial coverage for a range of healthcare services.
Payroll Taxes
Paid Leaves
- Annual Leave: After six months of continuous service, an employee accumulates 1.5 days of leave per month up to a standard entitlement of 18 paid days of annual leave. The duration of paid annual leave is increased by one and a half days every five years until a maximum of 30 days (about 4 and a half weeks) of annual leave is reached. Annual leaves may be carried forward for a maximum of 2 years.
- Sick Leave: Employees are eligible to take sick leave if they’ve contributed 54 days (about 2 months) of work in six months of coverage. They benefit from 4 days of paid sick leave per year. If the absence lasts more than four days, the employee must inform the employer of the probable duration of absence and provide a medical certificate justifying the reason for absence.
- Maternity Leave: Pregnant employees are entitled to 14 weeks (about 3 months) of paid maternity leaves. The repartition may be as follows; 7 weeks (about 1 and a half months) may be taken before birth and 7 weeks (about 1 and a half months) after. Fathers are entitled to 3 days of paid paternity leaves.
- Family Responsibility Leave: Employees are entitled to up to 3 days of leave, due to the death of an employee’s spouse, child, grandchild, parent, or stepchild. 2 days of leave, due to the death of an employee’s sibling or a sibling or parent of the employee’s spouse.
- Paid Public Holidays: In Morocco, the paid holidays are as follows:
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- January 1: New Year’s Day
- January 11: Anniversary of the Independence Manifesto
- May 1: Labour Day
- July 30: Throne Day
- August 14: Anniversary of the Recovery Oued Ed-Dahab
- August 20: Anniversary of the Revolution of the King and the People
- August 21: Youth Day
- November 6: Anniversary of the Green March
- November 18: Independence Day
- Islamic New Year (Hijri New Year): Date Varies
- Eid al-Fitr: Date Varies
- Eid al-Adha: Date Varies
- The Prophet’s Birthday (Mawlid al-Nabi): Date Varies
Payroll in Morocco also encompasses termination and probationary periods law. Probation typically spans six months, extending to eight months for managerial roles. Termination notices hinge on employee work classification and tenure. For instance, workers in specific sectors with over five years of service necessitate three to four months’ notice.
Payroll Outsourcing in Morocco
Payroll in Morocco also encompasses termination and severance laws. If an employee has at least six months of service, employers must pay severance pay (if applicable) at a rate of 96 hours of income per year of service, rising to 144 hours per year after five years of service, 192 hours per year after ten years, and 240 hours per year after fifteen. The average pay earned over the 52 weeks period before the contract’s termination determines the severance hourly rate.
Collaborate with an Africa employer of record and payroll solutions provider such as Workforce Africa to strategically outsource your payroll operations while ensuring compliance with local labour regulations. Additionally, leverage our flexible service offerings to expand your international teams as needed.
