Morocco Payroll Outsourcing, Payroll Software and Employer Of Record (EOR) services.
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MOROCCO
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Morocco Payroll and Employer of Record: Employment Contracts
Foreign employees need a work visa to legally work in Morocco. The most common visa for employment is the long-term visa, valid for up to one year, with each stay limited to 90 days.
Foreign nationals must also obtain a work permit to work in Morocco. There are several processes involved in getting a work permit, which is issued for a set period and must be regularly renewed. In addition to a work permit, foreign workers may also need to apply for a residency permit within 3 months of entering Morocco.
PAID TIME OFF
Annual Vacation
- Employees are entitled to up to 18 days of paid leave per year. After six months of continuous service with the same employer, employees earn 1.5 days of paid leave for each month worked. This entitlement increases by 1.5 days for every five years of service, up to a maximum of 30 calendar days.
- Upon termination of employment, if an employee has been with the same employer for at least six months, they are entitled to compensatory pay for any unused annual leave.
Sick
- Employees may not miss more than four days of work due to illness or accident without a medical certificate. If an absence due to illness or injury exceeds four days, a medical certificate is required.
- Employers may consider an employee to have resigned if they are absent for more than 180 consecutive days. Sick leave benefits are provided by the National Social Security Fund.
Maternity
- A pregnant employee is entitled to 14 weeks of maternity leave, supported by a medical certificate. More favorable terms may apply based on the employment contract, collective labor agreement, or internal regulations. Employees cannot work for 7 weeks following childbirth.
- If a medical condition related to pregnancy or childbirth requires it, maternity leave can be extended, up to 8 weeks before and 14 weeks after delivery.
- Employees with at least 54 days of contributions to the social security system in the preceding 10 months are eligible for maternity benefits. These benefits are paid for 14 weeks at 100% of the employee’s average wage during the 6 months before the due date.
Paternity
- Three paid paternity leave days are granted to employees. It’s not necessary for the three days to be consecutive; however it must be taken within one month following the birth.
Family
- Bereavement leave of up to 3 days.
National Holidays
In a given year, there are 13 official holidays in Morocco.
Other Paid Time Off
Union Representative Leave:
- Granted for attending municipal council meetings and committees, unpaid unless otherwise agreed.
Special Leave for Muslim Employees:
- Unpaid leave for Hajj: up to 30 days.
STATUTORY EMPLOYEE BENEFITS
Unemployment
- Covered by CNSS contributions. Benefits are paid for up to six months after unemployment.
Workers Compensation
- Employers bear the total cost. Occupational injuries and diseases must be assessed and the employee must provide a medical certificate.
Social Security
Social security is administered by the CNSS. The monthly CNSS contributions are as follows :
- Professional Training Tax : Employers – 1.6%
- Family Benefits : Employers – 6.4%
- Loss of employment : Employers – 0.38% and Employees – 0.19% ( Capped at MAD 6000 )
- Short term social benefits : Employers – 0.67% and Employees – 0.33% ( Capped at MAD 6000 )
- Long-term social benefits : Employers – 7.93% and Employees – 3.96%( Capped at MAD 6000 )
- Mandatory health insurance : Employers 4.11% and Employees – 2.26%
Retirement
- Covered under the Long-term Social Benefits of the CNSS contributions.
Health
- Covered by CNSS contributions.
- Employees in Morocco are required by law to have health insurance. Employees have a choice between public and private insurance plans that make up Morocco’s health insurance system.
PRIVATE EMPLOYEE BENEFITS
Workers Compensation
- Private workers’ compensation is available in Morocco.
Retirement
- Private retirement schemes are available in Morocco.
Health
- Private health insurance is available.
Insurance
- Private life insurance is available.
PERSONAL INCOME TAX
Tax Year
- Moroccan tax year runs from January 1st to December 31st.
Tax Tables
| Annual taxable income (MAD) | Tax rate (%) |
| 0 to 30,000 | Exempted |
| 30,001 to 50,000 | 10 |
| 50,001 to 60,000 | 20 |
| 60,001 to 80,000 | 30 |
| 80,001 to 180,000 | 34 |
| More than 180,000 | 38 |
Taxation Method
- Morocco uses a progressive taxation method.
Double Taxation
- Morocco has signed several double taxation avoidance agreements (DTAs) with other countries.
Residence Requirements
Individuals are considered as Moroccan tax residents when either:
-
- They have a habitual residence in Morocco
- Their economic interests are centered in Morocco
- They stay in Morocco for more than 183 days within any given 365-day period
Moroccan tax residents face taxes on their worldwide income. Non-tax residents are taxed only on Moroccan-sourced income.
Payroll Calendars
- Payroll is on a done monthly basis.
Rebates & Tax Credits
- For individuals, there are a number of deductions and exemptions available, such as deductions for charitable contributions, professional or business expenses, and pension insurance contributions.
Health Insurance
- Employees in Morocco are required by law to have health insurance. Employees must pay a portion of their wage towards the cost of their coverage, in addition to the employer providing health insurance coverage for them.
Unemployment
- Covered by CNSS contributions. Benefits are paid for up to six months after unemployment.
Social Security
Social security is administered by the CNSS. The monthly CNSS contributions are as follows :
- Professional Training Tax : Employers – 1.6%
- Family Benefits : Employers – 6.4%
- Loss of employment : Employers – 0.38% and Employees – 0.19% ( Capped at MAD 6000 )
- Short term social benefits : Employers – 0.67% and Employees – 0.33% ( Capped at MAD 6000 )
- Long-term social benefits : Employers – 7.93% and Employees – 3.96%( Capped at MAD 6000 )
- Mandatory health insurance : Employers 4.11% and Employees – 2.26%
PAYROLL ELEMENTS
Income
Individual income tax applies to the following categories of revenue and capital gains:
- Salary revenue.
- Revenues generated by professionals.
- Revenues from agricultural farms.
- Real estate revenue and capital gains.
- Revenue and capital gains from financial instruments.
Bonuses
- There are no legal requirements in Morocco regarding bonuses.
- However, it is common practice for employers to pay 13th-month bonuses.
Allowances
- Allowances are not mandatory but common allowances include :
- Housing Allowance.
- Transportation Allowance.
- Education Allowance.
- Meal Allowance.
Benefits in Kind
- Under Moroccan labor law, benefits in kind are considered taxable income for the employee, and the value of the benefits in kind must be included in the employee’s taxable income.
- The value of benefits in kind is typically determined based on the market value of the benefit, and the employer is responsible for calculating and reporting the value of benefits in kind to the appropriate tax authorities.
Investment Income
- Investment income is subject to tax under Moroccan law.
Retirement Funding
- Covered under the Long-term Social Benefits of the CNSS contributions.
Health Insurance
- Covered by CNSS contributions.
- Employees in Morocco are required by law to have health insurance. Employees must pay a portion of their wage towards the cost of their coverage, in addition to the employer providing health insurance coverage for them.
Risk Insurance
- Employers are generally not required to provide risk insurance coverage for their employees. However, some employers may choose to provide this coverage as part of their employment package as a benefit to their employees.
Taxable Income
Individual income tax applies to the following categories of revenue and capital gains:
- Salary revenue.
- Revenues generated by professionals.
- Revenues from agricultural farms.
- Real estate revenue and capital gains.
- Revenue and capital gains from financial instruments.
Allowable Deductions
- In Morocco, allowable payroll deductions refer to amounts that can be legally subtracted from an employee’s salary before taxes are calculated.
- These deductions include certain expenses, social security contributions, and any other mandatory contributions.
PAYROLL TAXES AND EMPLOYER CONTRIBUTIONS
Payroll Taxes
- Employers are responsible for withholding the appropriate amount of tax and social security contributions from employees’ salaries and remitting it to the government on their behalf.
Unemployment
- Covered by CNSS contributions. Benefits are paid for up to six months after unemployment.
Social Security
Social security is administered by the CNSS. The monthly CNSS contributions are as follows :
- Professional Training Tax : Employers – 1.6%
- Family Benefits : Employers – 6.4%
- Loss of employment : Employers – 0.38% and Employees – 0.19% ( Capped at MAD 6000 )
- Short term social benefits : Employers – 0.67% and Employees – 0.33% ( Capped at MAD 6000 )
- Long-term social benefits : Employers – 7.93% and Employees – 3.96%( Capped at MAD 6000 )
- Mandatory health insurance : Employers 4.11% and Employees – 2.26%
Workers Compensation
- Employers bear the total cost. Occupational injuries and diseases must be assessed and the employee must provide a medical certificate.
ADMINISTRATION
Income
- Employers are responsible for withholding the appropriate amount of tax from employees’ salaries and remitting it to the government on their behalf.
Payroll Taxes
- Employers are responsible for withholding the appropriate amount of tax from employees’ salaries and remitting it to the government on their behalf.
Unemployment
- Benefits are paid for up to six months after unemployment.
- To qualify, the worker must have at least 780 days of contributions in the last 36 months, including 260 days in the last 12 months, be involuntarily unemployed, and be ineligible for an old-age or disability pension.
Social Security
- Old-age and early pension:
50% of the insured’s average monthly earnings from the last 96 months, plus 1% for every 216 days beyond 3,240 days of coverage.
Maximum earnings for calculation: 6,000 dirhams.
Maximum pension: 70% of the insured’s average monthly earnings.
- Permanent disability pension:
50% of the insured’s average monthly earnings from the last 12 or 60 months, plus 1% for every 216 days beyond 3,240 days of coverage.
Maximum earnings for calculation: 6,000 dirhams.
Maximum pension: 70% of the insured’s average monthly earnings.
- Survivor pension:
Spouse’s pension: 50% of the deceased’s old-age or disability pension.
Orphan’s pension: 25% for each eligible orphan; 50% for a full orphan.
Workers Compensation
- Temporary disability benefits:
66.7% of the employee’s daily earnings were paid from the day after the accident until recovery, certification of permanent disability, or death.
- Permanent disability benefits:
Permanent disability pension:
For 50% or more disability: 45% of annual earnings plus 1% for each degree above 50%.
For 30–50% disability: 15% of annual earnings plus 1.5% for each degree above 30%.
For 10–30% disability: 15% of annual earnings.
For up to 10% disability, a lump sum.
- Workers’ medical Benefits:
Coverage: medical, surgical, hospital care, medication, and transportation.
- Survivor Benefits:
Spouse’s pension: 50% of the deceased’s monthly earnings.
Orphan’s pension: 20% for one orphan, 30% for two, 40% for three, 10% for each additional orphan, and 30% for a full orphan.
Other survivors: 20% of the deceased’s annual salary.
Statutory Benefits
- The probationary term, yearly leave, public holidays, sick leave, maternity leave, paternity leave, overtime pay, notice period, and severance compensation are some of these.
- Social Security payouts are also considered to be statutory benefits.
Employee Benefits
- All employees are entitled to time off, including on public holidays.
LEGISLATION
- Labor Code last amended 2003.
STATUTORY BODIES
- Ministry of Employment and Vocational Training.
- National Social Security Fund.
- National Sickness Insurance Agency (ANAM).
