Six-band IRSA. Capped CNaPS base. Madagascar payroll, solved.
Madagascar’s payroll is not a flat-rate exercise. It runs on a six-band IRSA salary tax with a new 25% top bracket from January 2026, CNaPS and OSTIE contributions on a base capped at eight times the minimum wage (MGA 2,400,000/month), a separate FMFP vocational-training levy, a minimum IRSA of MGA 3,000 even on the lowest pay, and quarterly CNaPS declarations alongside monthly IRSA payment by the 15th. Most providers hardcode last year’s scale and miss the ceiling. Mercans models all of it – on a single proprietary stack with no intermediaries.
native payroll
vs nearest peer
since inception
- Income Tax (IRSA)
- 0 / 5 / 10 / 15 / 20 / 25%
- Corporate Tax (IR)
- 20%
- Employer Social Charges
- 19% (CNaPS 13% + OSTIE 5% + FMFP 1%)
- Employee Social Charges
- 2% (CNaPS 1% + OSTIE 1%)
- Contribution Ceiling
- MGA 2,400,000 / month
- Minimum Wage (SME)
- MGA 300,000 / month
- IRSA Tax-Free Band
- Up to MGA 350,000 / month
- Minimum IRSA
- MGA 3,000 / month
- New 25% Bracket
- Above MGA 4,000,000 / month
- Annual Leave
- 2.5 days / month (30 / year)
- Overtime First 8h
- +30% (then +50%)
- IRSA Payment
- Monthly by the 15th
- CNaPS Declaration
- Quarterly DNS filing
- VAT (TVA) Standard
- 20%
- Currency
- Malagasy Ariary (MGA)
Payroll compliance: the details that can’t be missed
Madagascar’s regulators don’t grade on a curve. The Direction Générale des Impôts (DGI) reconciles monthly IRSA against annual salary summaries. CNaPS audits contribution bases against the minimum wage and the 8×-SME ceiling on the quarterly DNS. OSTIE tracks health coverage per registered worker. The labour inspectorate examines leave, overtime and severance. None of these failures announce themselves – they accumulate silently until a reconciliation or inspection makes them very visible.
2026 IRSA scale & 25% bracket misapplied
The 2026 Finance Law (Loi n° 2025-021) added a 25% band above MGA 4,000,000/month on top of the 0/5/10/15/20% scale. Running last year’s table under-withholds on high earners and surfaces at the DGI annual reconciliation with interest and penalties.
Contribution ceiling & base errors
CNaPS and OSTIE apply on gross capped at eight times the SME (MGA 2,400,000/month). Ignoring the cap over-withholds; contributing below the minimum-wage base under-declares. CNaPS assesses arrears with penalties on every affected quarter.
Minimum IRSA & late payment
Even below the MGA 350,000 tax-free band a minimum IRSA of MGA 3,000 per employee is due, and IRSA is payable to the DGI by the 15th of the following month. Omitting the floor or paying late triggers administrative fines plus default interest.
Leave, overtime & severance breaches
Workers accrue 2.5 days paid leave per month (30/year), overtime carries +30% then +50% premiums, and dismissal without cause triggers statutory severance. Underpaying any of these exposes the employer to labour-inspectorate claims and retroactive settlement of the full shortfall.
The three types of providers who struggle with Madagascar
Global Aggregator Platforms
Platforms like Deel, Remote, and Rippling operate through a partner network in Madagascar – they don’t own the entity, don’t directly manage the DGI and CNaPS filings, and don’t control the compliance relationship. When the IRSA scale changes on 1 January, the instruction travels: platform → partner → your payroll. Each handoff introduces delay and interpretation risk.
- ×No direct DGI / CNaPS filing – third-party intermediary files
- ×2026 IRSA scale & 25% band absent or partner-dependent
- ×8×-SME contribution ceiling tracked manually
- ×Rate updates filtered through partner SLAs, not live
Large Global Payroll Incumbents
ADP, SD Worx, and similar incumbents have Madagascar coverage – in name. In practice, coverage of a small Indian-Ocean market is often delivered through regional partners or legacy engines that weren’t built for Madagascar’s six-band IRSA, capped CNaPS/OSTIE base, separate FMFP levy, or the minimum-IRSA floor.
- ×2026 six-band IRSA hardcoded – not dynamically updated
- ×Contribution ceiling and minimum base updated manually
- ×FMFP training levy handled off-system
- ×Long implementation timelines – Madagascar not a core market
Local Malagasy Firms
Local Malagasy accounting and bookkeeping firms know the market – but they can’t scale with you. No proprietary payroll technology platform, no HRIS integration, no multi-country consolidation, and no data-security certifications that multinationals require. Fine for 10 employees. Inadequate at 100.
- ×No proprietary payroll technology – spreadsheet-based filing
- ×No HCM connector – Workday, SAP, Oracle feeds need custom work
- ×No data security certifications (SOC 1/2, ISO 27701, BCR)
- ×No Africa consolidation – cannot report across Madagascar + other entities
The only provider that closes every gap
Mercans is the only Madagascar payroll provider that combines a proprietary payroll technology stack, full-time in-country compliance teams, direct DGI and CNaPS relationships, and enterprise-grade data security – simultaneously, on one contract, with no intermediaries.
The only engine built for Madagascar’s actual payroll architecture
G2N Nova™ is the world’s only API-first gross-to-net payroll engine. It natively models Madagascar’s 2026 six-band IRSA scale, enforces the 8×-SME contribution ceiling on CNaPS and OSTIE, layers the separate FMFP training levy, applies the minimum-IRSA floor, and generates the monthly IRSA payment and quarterly CNaPS DNS declaration. This isn’t configuration. It’s engineering.
Full-time Madagascar team – not a partner you phone when things break
Mercans employs full-time payroll and compliance professionals for Madagascar. They maintain active relationships with the Direction Générale des Impôts (DGI), the Caisse Nationale de Prévoyance Sociale (CNaPS), and OSTIE – not through a contact directory, but through ongoing regulatory engagement. When the Finance Law changes the IRSA scale, when the SME and 8× ceiling move, when a declaration format changes – we know before it reaches your inbox.
The security posture multinationals require – and Madagascar’s data law expects
Madagascar’s Law 2014-038 on the protection of personal data requires processors handling employee personal data to maintain documented privacy controls. Mercans holds BCR approval, ISO 27701 certification, SOC 1 & 2 certifications, and ISO 27017/27018 – the complete certification stack. Zero security breaches since inception.
Where Mercans wins on every Madagascar-specific capability
Each row is a Madagascar-specific capability. Each cell shows native coverage as a fill bar – full = native in-platform, half = partial / manual workaround, empty = gap.
Madagascar Capability Coverage · 8 dimensions
0–25% · new top band
CNaPS + OSTIE cap
+30% / +50% / night
Every rate. Every cap. Every obligation.
Madagascar payroll operates on exact numbers with hard deadlines. Mercans builds every figure below into G2N Nova™ and monitors them proactively – so you’re never discovering a rate change from a penalty notice.
Madagascar · Rate & Compliance Dashboard
Live 2025–26The 2026 IRSA Scale Has Six Bands, Not Five
Monthly IRSA is 0% up to MGA 350,000, then 5% to 400,000, 10% to 500,000, 15% to 600,000, 20% to 4,000,000, and a new 25% band above MGA 4,000,000 introduced by the 2026 Finance Law. A minimum IRSA of MGA 3,000 always applies. Mercans’ G2N Nova™ runs the exact 2026 scale, not a hardcoded prior-year table.
→ 2026 six-band IRSA in G2N Nova™Contributions Are Capped at 8× the SME
CNaPS (13% employer / 1% employee) and OSTIE (5% employer / 1% employee) apply on gross up to eight times the minimum hiring wage. Following the SME decree published 29 June 2026 (SME MGA 300,000, retroactive to 1 March 2026), the general-regime ceiling is MGA 2,400,000/month, rising to MGA 2,520,000 when the SME reaches MGA 315,000 in October 2026. Salary above the cap carries no further contribution.
→ Per-employee 8×-SME ceiling enforcementIRSA Base Is Net of Employee Social Contributions
The IRSA base is gross minus employee CNaPS and OSTIE (2% combined), rounded down to the nearest MGA 100, then reduced by MGA 2,000 per dependent. The FMFP training levy (1% employer) sits outside the employee base but is enforced on the employer.
→ Base netting & FMFP layered automaticallyMonthly IRSA, Quarterly CNaPS/OSTIE
IRSA is declared and paid to the DGI by the 15th of the following month. CNaPS and OSTIE contributions are declared and paid quarterly via the DNS. Discrepancies between the two cadences and the annual salary summary trigger DGI and CNaPS assessments with default interest.
→ Dual-cadence filing & reconciliationRun a Madagascar payroll. Right here, right now.
Switch worker type. Move the slider. Every number you see is the same calculation G2N Nova™ runs in production – capped CNaPS + OSTIE contributions, the 2026 six-band IRSA scale, the minimum-IRSA floor, and true cost of employment exposed live.
Madagascar Social Contribution Calculator · Live
G2N Nova™ engineEight things only Madagascar experts know to handle
These are the compliance details that don’t appear in standard payroll setup guides – but appear in every DGI reconciliation, CNaPS audit, and labour inspection we’ve encountered in Madagascar.
The IRSA Scale Gained a Sixth Band in 2026
The 2026 Finance Law (Loi n° 2025-021) added a 25% band on the portion of monthly taxable income above MGA 4,000,000, on top of 0% to 350,000, then 5/10/15/20%. Running the old five-band table under-withholds all year and surfaces at the annual reconciliation.
Contributions Run on a Base Capped at 8× the SME
CNaPS and OSTIE apply on gross capped at eight times the minimum hiring wage. The SME rose to MGA 300,000 under a decree published 29 June 2026 (retroactive to 1 March 2026), lifting the general-regime ceiling to MGA 2,400,000/month; a further rise to MGA 315,000 (cap MGA 2,520,000) applies from October 2026. Salary above the cap carries no further contribution.
A Minimum IRSA of MGA 3,000 Always Applies
Even where taxable income falls in the 0% band up to MGA 350,000, a minimum IRSA (minimum de perception) of MGA 3,000 per employee is still due each month. A pure bracket calculation that returns zero under-declares against the DGI floor.
IRSA Is Charged on Gross Minus Employee Social
The IRSA base is gross salary minus the employee CNaPS (1%) and OSTIE (1%) contributions, rounded down to the nearest MGA 100, then reduced by family deductions of MGA 2,000 per dependent. Skipping the social deduction over-taxes every employee.
The FMFP Vocational-Training Levy Is Separate
On top of CNaPS and OSTIE, employers owe a 1% FMFP (Fonds Malgache de Formation Professionnelle) training levy. It funds a different body, is easy to omit because it is not part of the headline social charge, yet it is enforced on the payroll base.
IRSA Is Monthly, CNaPS Is Quarterly
IRSA is declared and paid to the DGI by the 15th of the following month, while CNaPS and OSTIE contributions are declared and paid quarterly via the Déclaration Nominative de Salaires (DNS). Mixing the cadences is a frequent source of late-payment penalties.
Posted Expats May Be Exempt from CNaPS
Madagascar-source salary is taxed at the same IRSA scale for residents and non-residents; there is no expat flat regime. Expatriates seconded under a home-country or bilateral social-security scheme can be exempt from CNaPS and OSTIE, but locally hired foreigners contribute in full.
Leave, Overtime and Severance Are Statutory
Paid leave accrues at 2.5 working days per month (30/year). Overtime carries +30% for the first eight hours then +50%, with higher night and holiday premiums. Dismissal without cause triggers statutory severance by length of service. All must be tracked for final settlements.
One workforce. Two entirely different compliance tracks.
Permanent employees on full CNaPS and OSTIE cover vs. fixed-term and daily/seasonal workers on limited terms requires two distinct compliance frameworks, two sets of termination rules, and two different entitlement calculations. Mercans runs both simultaneously on every pay cycle.
Parallel Compliance Engines
Full CNaPS + OSTIE cover from Day 1. 1% + 1% employee and 13% + 5% employer of gross, capped at MGA 2,400,000/month, plus the 1% employer FMFP levy. Quarterly DNS declaration to CNaPS and OSTIE.
2026 six-band IRSA withheld monthly. 0% up to MGA 350,000, then 5/10/15/20% and a new 25% band above MGA 4,000,000, with a minimum IRSA of MGA 3,000, paid to the DGI by the 15th.
Statutory leave and overtime accrue. Paid leave at 2.5 days per month (30/year); overtime at +30% for the first eight hours, then +50%, with higher night and holiday premiums.
Severance scales with service. Dismissal without cause triggers statutory severance and notice by length of service, with final-settlement and untaken-leave payout on exit.
Same social and tax treatment, pro-rated. No reduced rates – full 2% employee / 19% employer contributions and the six-band IRSA apply. Leave and benefits pro-rate to hours and the portion of the period served.
Fixed-term duration and renewal limits. CDD contracts are limited in duration and successive renewals; exceeding the statutory limit converts the relationship to indefinite (CDI) employment with full entitlements.
Daily and seasonal workers still register. Journaliers and seasonal staff must be declared to CNaPS and OSTIE on the DNS; short engagements are the most common source of missed declarations.
Contribution floor still applies. Contributions are due on at least the minimum-wage base; very low or part-period pay can trigger a top-up to the SME floor before the 8× cap is reached.
Every obligation. Every authority. Mercans owns the calendar.
Madagascar compliance runs across the DGI, CNaPS, OSTIE, and the labour inspectorate on monthly, quarterly, annual, and event-triggered cadences. Mercans’ managed payroll absorbs every filing as standard scope – you don’t track deadlines. We do.
IRSA Declaration & Payment
The monthly IRSA on salaries is declared and paid to the DGI by the 15th of the following month, applying the 2026 six-band scale and the MGA 3,000 minimum per employee. Late filing or payment triggers fines and default interest.
CNaPS Contribution & DNS
CNaPS contributions (13% employer / 1% employee) on the capped base are declared and paid quarterly via the Déclaration Nominative de Salaires (DNS). Late payment triggers surcharges and interest.
OSTIE Health Contribution
OSTIE occupational-health contributions (5% employer / 1% employee) on the capped base are declared and paid on the same quarterly cadence, funding medical cover for registered workers.
FMFP Vocational-Training Levy
Employers owe the 1% FMFP training levy on the payroll base. It funds vocational training and is enforced separately from CNaPS and OSTIE; omission is a common audit finding.
Employee Registration / Exit
Every hire and exit must be declared to CNaPS and OSTIE around the start and end date. Late registration breaks social-insurance continuity and exposes the employer to penalties.
Annual Salary Summary (États)
The annual recapitulative statement of salaries paid and IRSA withheld is filed with the DGI, reconciling monthly IRSA payments. Discrepancies trigger DGI assessment.
Final Settlement & Severance
Final settlement applies statutory notice and severance by length of service, untaken-leave payout, and any indemnities. Deregistration is filed with CNaPS and OSTIE in parallel.
Ceiling & Overtime Monitoring
CNaPS and OSTIE bases must stay at or above the SME and below the 8× ceiling (MGA 2,400,000), and overtime premiums (+30% / +50%) tracked per employee for correct pay and clean settlements.
Madagascar is one market. Mercans covers Africa and the Indian Ocean.
For companies running payroll across multiple African and Indian-Ocean states, complexity multiplies – not adds. Each country runs its own tax authority, social-insurance body, and filing mandate. Mercans covers all major markets on a single platform with country-specific compliance engines running in parallel.
covered
1 contract
consolidation
Africa
Every filing. Every format. Submission-ready.
Mercans generates the exact file types that the DGI, CNaPS, and OSTIE expect to receive – not formatted summaries that need reformatting before you can submit them.
