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Employer costs, taxes, minimum wage and leave rules for hiring here, plus the faster route: hire a contractor with Ontop, no local entity needed.
2026
Currency
MGA Ar (Malagasy Ariary)
Employer contributions
~13% employer CNaPS (family benefits 9% + work injury 4%)
Minimum wage
MGA 400,000/month (SMIG 2024)
Payment frequency
Monthly
Calendar year (Jan 1 - Dec 31)
Capital
Antananarivo
Timezone
EAT (GMT+3)
Employee or contractor
If the work is project-based or you need to move fast, a contractor gets you the same talent with a fraction of the paperwork.
Employee
~MGA 984,000 total
/month
For a gross salary of
MGA 800,000 gross/month
Setup
Local entity or employer of record, plus tax and social security registration
Employer contributions
~13% employer CNaPS (family benefits 9% + work injury 4%)
Mandatory extras
13th Month
Monthly admin
Monthly payroll - CNaPS by month-end - IRSA withholding - annual April return
Contractor with Ontop
No local entity
$49
/contractor/month
The agreed rate, plus Ontop from $49 per contractor per month.
Sign a contract, yours or an Ontop template. No local registration on your side.
No employer contributions: the contractor handles their own taxes and social security.
One payment per invoice, in one payroll run.
Paid into their Ontop Global Account in USD.
See the full side-by-side comparison
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A contractor's rate usually covers their own taxes, so compare total cost, not just gross pay. Run your numbers in the contractor vs employee calculator.
Hiring here: the full breakdown
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Payroll guide
Employer costs come on top of gross pay. Use these figures to budget a hire and to compare it with a contractor rate.
Total monthly cost
~MGA 984,000 total
Example gross salary
MGA 800,000 gross/month
~MGA 540,000 net
Net pay to the employee
Tax and employee contributions
Withheld from gross pay
~MGA 184,000 CNaPS
Employer contributions on that salary
Employer contributions
~13% employer CNaPS (family benefits 9% + work injury 4%)
Employee contributions
~1% employee CNaPS + income tax (IRSA)
Total cost above gross
~23% above gross (CNaPS)
Figures are estimates for planning. Rates change with each budget and can vary by sector, so confirm them before you make an offer.
What people earn here, from the legal floor to the main cities, plus the extra pay most employers budget for.
National average
~MGA 500,000
Per month
Antananarivo
MGA 700,000 - 3,000,000
~40%
Toamasina
MGA 500,000 - 2,000,000
~10%
Monthly gross. National average salary per year:
~MGA 6,000,000
Minimum wage
MGA 400,000/month (SMIG 2024)
Paid:
Monthly
Extra pay
13th Month
Mandatory in formal sector
December
Collective agreements can set sector minimums above the national one. Check whether one applies to the role before you set the salary. Next step: estimate the full cost of an employee.
Who collects what, how often, and what happens when a payment is late.
Income tax brackets
0% up to MGA 350,000 / 5% / 10% / 15% / 20%
Tax year:
Calendar year (Jan 1 - Dec 31)
Filing calendar
Monthly by last day
Social security payments
April 30
Income tax
By January 31
Employee tax certificate
Certificat de salaire
April 30
Annual return
Declaration annuelle
Late payment penalties
Late CNaPS: 3% monthly; late IRSA: 10% + interest
Who collects what
DGI
Income tax (IRSA)
CNaPS
Social security
Ministry of Labour and Social Laws
Labour law
The time off and paid leave every employee is entitled to by law. Budget for it when you compare an employee with a contractor.
Annual leave
Conge paye
30 working days/year (2.5 days/month)
Public holidays
~12 public holidays
Sick leave
Conge de maladie
CNaPS pays from day 4
Maternity leave
14 weeks (98 days) maternity
Full pay employer; CNaPS reimburses
The contracts you can use, and what ending an employment relationship costs.
Permanent
Contrat de Travail a Duree Indeterminee (CDI)
Fixed term
Contrat de Travail a Duree Determinee (CDD)
Independent contractor
Contrat de Prestation de Services
Collective agreements
Convention Collective
Ending employment
Indemnite de licenciement
How it is calculated
Per Labour Code
Calling someone a contractor does not make them one. If the role works like employment in practice, local authorities can reclassify it, with back contributions and penalties.
The errors that most often trigger back payments and penalties here, and what to do instead.
SMIG Annual Update Non-Compliance
Risk Level: HIGH
Madagascar's SMIG is adjusted irregularly by decree. Employers who fail to track government gazette announcements may continue paying outdated minimums. Labour inspectors impose back-pay from the effective date of each new SMIG.
EPZ vs Standard Labour Code Distinction
Risk Level: MEDIUM
Madagascar's Export Processing Zones (EPZ/ZFI) operate under different labour rules with reduced social contribution requirements and flexible employment terms. Companies operating both inside and outside EPZ must maintain separate payroll tracks.
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Next topicOntop is the Global Workforce Engine for contractor teams: contracts, compliance documents and payments in 150+ countries.
150+
countries
$49
per contractor per month
1 run
to pay your whole team
USD
Global Account for every contractor
FAQ
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Ontop works with contractors, not employees. As Contractor of Record, Ontop handles contracts, compliance documents and payments for contractors in 150+ countries. To employ someone, you need a local entity or an employer of record. Ontop doesn't act as your employer of record.
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Employers pay contributions on top of gross salary. The cost table on this page shows the rates that apply here and a worked monthly example. A contractor with Ontop costs the agreed rate plus Ontop from $49 per contractor per month.
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Many countries require an extra month or an annual bonus for employees. The salaries section on this page shows the one that applies here and when it is usually paid. Contractors are paid what you agree in the contract.
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Employers withhold income tax and the employee's social security share every pay run, then pay them to the local authorities. The taxes section on this page lists the brackets, rates and filing deadlines that apply here.
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Yes. The contractor vs employee calculator compares the full cost of an employee, employer contributions included, with a contractor rate plus Ontop's monthly fee.
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When the work is project-based, you need to start fast or you don't have a local entity. If the person will work fixed hours, under your direction and only for you, local law may treat them as an employee, so hire them as one.
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Misclassifying employees as contractors, missing tax and social security deadlines, and ignoring collective agreements that set higher wage floors. The mistakes section on this page covers the ones that come up most often here.
Compare employer costs, taxes and contractor rules in nearby countries:
Ready to hire? See Ontop pricing or learn how to build a global team without an employer of record.
Ready to hire? See Ontop pricing or learn how to build a global team without an employer of record.