Hiring in Madagascar: the work permit, the contract and a salary worked through, step by step

Move someone who is already in Madagascar

A work permit names the post and the place of work. The visa for a worker with specific skills is tied to the contract. It lapses when the contract ends for good. Its holder leaves Madagascar within a month of the contract ending, whatever time the visa has left.

A move to a new employer starts the steps again: the new contract approved, a work permit for it, and a visa.

A Malagasy citizen needs no permit. Their move turns on the notice their current contract carries, for the length a decree sets unless a collective agreement gives more.

Check the role is open to a non-Malagasy

The visa is for a worker with specific skills. These are knowledge, abilities or aptitudes gained through specialised training that Malagasy workers do not have. They let the worker carry out complex, precise and temporary tasks in particular sectors.

The skills can be shown by international diplomas or certificates not available in Madagascar, or by proven experience. Whether the post and the worker's skills match is for the Minister of Labour alone to judge.

Set the contract up right

The contract is put in writing at hiring. It states at least the post, the professional category, the minimum classification index, the salary and the start date. It is written in Malagasy or French, or both, in two copies. The employee is handed one once both sides have signed. The Ministry of Labour publishes a model for each type of contract.

A contract can be open-ended or for a fixed term. A fixed term is only for work outside the business's normal and permanent activity, or for a set piece of work. It can also cover an exceptional rise in activity, or urgent work that safety requires. It runs for at least a month and at most two years. It can be renewed twice, for no more than six years in all. A rehire to the same post within three months counts as a renewal. A fixed term that runs on with neither side ending it becomes open-ended.

A trial period is agreed in writing, stating the post, its length, the salary and the professional category. It lasts up to six months, renewable once. A trial not agreed in writing does not exist.

Pay is in Malagasy legal tender, paid in Madagascar. Monthly pay is due at the latest eight days after the month's due date. Staff paid by the hour or the day move to monthly pay after six months' continuous service.

The legal week is 40 hours. Hours beyond it are overtime, paid at higher rates that a decree sets. Work on Sundays and public holidays is paid at higher rates set by decree too. Night work runs between 22:00 and 05:00, also at a higher rate set by decree. Every employee has at least 12 hours' unbroken rest a day, and 24 hours in a row each week, in principle on Sunday.

Know the employee test before you engage a contractor

Madagascar's Labour Code treats as a worker anyone, of any nationality, who has undertaken to put their professional activity under the direction and authority of another person, for pay. Someone paid by the task or the piece who habitually works for a business in person is a worker too, with no need to show they are subordinate.

A working relationship without a written contract can be proved by any means. It is treated as open-ended. The Code applies to every contract performed in Madagascar, wherever it was signed and wherever either side lives.

A role that needs a work permit goes through employer of record.

Work out what a salary costs you and what the employee takes home

Take an employee in Antananarivo on MGA 2,000,000 a month, with no dependants.

Outside agriculture, the CNaPS counts pay up to a ceiling of MGA 2,520,000 a month, eight times the minimum wage, so here it counts the whole salary. The training contribution is worked out on the same pay.

Income tax is worked out after the employee's CNaPS and OSTIE contributions come off, on MGA 1,960,000 here. The CNaPS contribution comes off as a pension contribution, allowed up to 10% of gross pay. The OSTIE contribution comes off as a health contribution, allowed up to 2%. The taxable pay is rounded down to a multiple of MGA 100.

The bands take nothing on the first MGA 350,000, 5% of the next MGA 50,000, 10% of the next MGA 100,000, 15% of the next MGA 100,000 and 20% of the rest, MGA 299,500 in all. Pay above MGA 4,000,000 a month is taxed at 25%.

Each dependant takes MGA 2,000 a month off the tax, where taxable pay is above MGA 350,000. The tax is never less than MGA 3,000 a month.

Income tax is paid within the first 15 days of the next month. The training contribution is paid each quarter, with the CNaPS contributions. The OSTIE's contributions are paid each quarter too.

Know the leave your people are entitled to

End employment on the law's terms

An open-ended contract ends on notice from whichever side ends it, unless the other has committed gross misconduct. The notice runs for the length a decree sets, unless a collective agreement gives more. A side that does not give the notice owes the other the pay and benefits for it. The decision is given in writing, with its reasons. No new reason can be added once it is notified.

Before a dismissal, the employee is told in writing why it is planned, and called to a hearing at least three working days ahead. They can see the file, put their case and bring someone of their choice.

A dismissed employee is owed the balance of their pay, pay for leave not taken, and notice unless they committed gross misconduct. Everyone who leaves is owed a certificate of employment.

A dismissal without a legitimate, real and serious reason is unfair. So is one that skips the procedure. The court sets the damages. It is for the side that ended the contract to show the reason was legitimate.

An economic dismissal follows its own procedure. The staff representatives are consulted first. The labour inspector then gives an opinion within 15 working days. The order of dismissals weighs length of service first, then professional worth, then family responsibilities. Each employee is owed 10 days' pay for each complete year of service, up to six months' pay, on top of notice and leave pay.

A fixed-term contract ends on its date. Ending it early, outside the cases the contract or the law allows, costs the pay and benefits for the rest of the term.

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