Many of  you who want to start a business in Morocco, may ask this question.

How much does a new employee cost me ?

If you are offering only the minimum wage as a net salary (2 398 MAD) , the cost will be (2398+ 542.23) MAD. No taxes applied just the social contribution which is 542.23 MAD in this case.. But things get difficult when you are offering  different amounts of  salary plus other benefits.

To understand well Moroccan payroll , let’s take the example of a new  recruit in your company  who wants a net salary of  15,000 MAD  per month without any other extra benefits (CIMR1, bonuses etc ….).

To reach the net 15,000 MAD , the employer   must do some math and  start with a gross salary X and apply to it , the employer and employee social security contributions(CNSS2)  and general income taxes (IGR3).

Normally, taxes  and  social contributions are paid by both the employee and  the employer, but since our new recruit  requires a net salary, we must play with a gross salary to get to the required net income.

The table below shows in detail,  the social security contribution rate applied in Morocco since early 2016:

ItemEmployer’s contribution rateEmployee’s contribution rateMax.Total
Sickness and maternity, death0,67 %0,33 %6.0001,00 %
Pension7,93 %3,96 %6.00011,89 %
Compensation for loss of employment0,38 %0,19 %6.0000,57 %
Compulsory health insurance2,26 %2,26 %None4,52 %
AMO4 – Participation1,50 %None1,50 %
Family benefits6,40 %None6,40 %
Professional training1,60 %None1,60 %
Total20,74 %6,48 %
27,48 %
  • Rate as of January 2016

The overall rate of social security contributions in Morocco amount to 27.48%. The employer’s share is 20.74%, the employee share is 6.48%.

The general income tax (IGR) is calculated using  ranges of  incomes to which is applied a rate and a  deduction. See table below.

.

Monthly income per month
RateDéductions
0,00 – 2.500,000 %0,00
2.501,00 – 4.166,6710%250,00
4.166,68 – 5.000,0020%666,67
5.000,01 – 6.666,6730%1.166,67
6.666,68 – 1.5000,0034%1.166,67
+ 15000.0038%2.033,33

Our friend who wants net 15,000 Mad, will be in the 38% range because his  taxable amount is 16,882 which is over 15000 per month

To reach  a net salary of 15,000 MAD,  We  must consider  a gross salary of  20,106 MAD  per month.

ItemAmount in MAD
Gross salary20.106,00
Employee’s AMO454,40
Employee’s CNSS268,8
Total (AMO+CNSS)723,20
Income Tax IGR4.383,00
Net salary15.000,00
Total employers’ contribution2.973,64

Net salary = Gross salary – Total  (AMO+CNSS)   – IGR .  According to our example:
20106 – 723 – 4383.00 = 15000 MAD

So we get to the answer to our “million dollar question”:
Our friend who wants the net wage of 15000 MAD will cost us 23079 in total (the gross salary + employer’s charges ( 20106 + 2973 = 23079 MAD) )

In summary, to offer 15,000 net to an employee , your company will  have to spend 23079 MAD  The extra is  8079 MAD  representing 54% of net wages.

Note that there are other expenses paid by the company and which are not included  in the payroll. Namely, insurance  (mandatory since November 2002), staff  transportation , catering, internal health service, and  other .. .

CIMR:  Caisse interprofessionnelle marocaine de retraite.(Moroccan interprofessional pension fund)

CNSS: Caisse nationale de sécurité sociale (National Social Security Fund)

IGR: Impôt général sur les revenus(General income tax )

AMO: Assurance maladie obligatoire (Compulsory health insurance)

By sh