Minimum Hiring Wage Increase and New Social Contributions Ceiling

Madagascar: Minimum Hiring Wage Increase and New Social Contributions Ceiling Effective March 1, 2026

Introduction

In Madagascar, labor regulations evolve regularly to adapt to economic and social realities. One of the most significant mechanisms is the adjustment of the Minimum Hiring Wage (SME), which directly affects the calculation of social and employer contributions.

Starting March 1, 2026, a new SME level will apply, resulting in an updated social contributions calculation ceiling for companies operating in Madagascar, including those using offshore staffing and dedicated employee models.

Institutional framework of the wage adjustment

The revision of the social contributions ceiling is decided by the government during the Council of Government, usually through a decree, following a proposal from the Ministry of Labor, Employment, and Public Service.

This process involves consultations with social partners, including employer organizations such as the Groupement des Entreprises de Madagascar (GEM), FIVMPAMA, and the Conférence des Travailleurs de Madagascar (CTM), in negotiation with workers’ unions.

The Conseil National du Travail et de l’Emploi (CNTE) then issues an advisory opinion on the proposed minimum wage levels.

Minimum Hiring Wage increase effective March 1, 2026

Social partners agreed on a Minimum Hiring Wage set at 300,000 ariary, applicable from March 1, 2026, subject to the official publication of the decree.

This represents a 14% increase compared to the previous SME of 262,680 ariary.
The objective of this adjustment is to:

• Offset inflationary pressures

• Support employees’ purchasing power

• Maintain a balance between business competitiveness and social protection

The SME applies to the M1 category, which represents the lowest level in the professional classification hierarchy. Adjustments to higher categories are generally incremental and explicitly defined.

New social contributions calculation ceiling

In Madagascar, all social contributions are calculated based on a ceiling equal to eight (8) times the Minimum Hiring Wage.

With the new SME, the updated ceiling becomes:

8 × 300,000 ariary = 2,400,000 ariary

➡️ As of March 1, 2026, all employee and employer social contributions will be calculated up to a maximum base of 2,400,000 ariary, regardless of higher actual salaries.

Applicable social contribution rates

CNAPS – National Social Security Fund

• 1% employee contribution

• 13% employer contribution

Inter-company health organizations

• 1% employee contribution

• 5% employer contribution

The main occupational health organizations include:

• OSTIE (Organisation Sanitaire Tananarivienne Inter-Entreprises)

• AMIT (Association Médicale Interentreprises de Tananarive)

• ESIA (Espace Sanitaire Interentreprises d'Antananarivo) 

• FUNHECE (Funds Health Center), which offers nationwide coverage through partnerships with basic health centers (CSB)

FMFP – Malagasy Professional Training Fund

• 1% employee contribution

• 1% employer contribution

These contributions finance social protection, occupational health, and professional skills development.

Impact on businesses and offshore staffing

For both local companies and international businesses employing dedicated staff in Madagascar, this reform provides:

• Clear visibility on social costs through the legal ceiling

• Regulatory compliance and risk mitigation

• A favorable and structured framework for offshore staffing and outsourcing, while respecting local labor regulations

Conclusion – Bloom’in expertise at your service

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Our deep understanding of local labor regulations ensures a secure, transparent, and optimized employment framework, including the implementation of SME updates and social contribution ceilings.

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