Mauritius operates a progressive tax system that impacts both employers and employees. Understanding these obligations is crucial for businesses operating within the country, whether they are local entities or international companies employing staff remotely or through a local presence. Employers are responsible for withholding income tax from employee salaries under the Pay As You Earn (PAYE) system and for contributing to various social security and national savings schemes. Employees, in turn, benefit from certain deductions and allowances that reduce their taxable income. Navigating these requirements ensures compliance and smooth payroll operations.
Employer Social Security and Payroll Tax Obligations
Employers in Mauritius are required to contribute to several funds based on their employees' earnings. The primary contributions include the National Pension Fund (NPF), the National Savings Fund (NSF), and the Contribution Sociale Généralisée (CSG). These contributions are calculated based on the employee's basic salary or gross monthly remuneration, up to certain ceilings.
National Pension Fund (NPF)
The NPF is a mandatory retirement savings scheme. Contributions are shared between the employer and the employee.
| Contribution Type | Rate | Salary Ceiling (Monthly) |
|---|---|---|
| Employer | 6% | MUR 20,900 |
| Employee | 3% | MUR 20,900 |
- Contributions are calculated on basic salary.
- The ceiling is subject to annual review.
National Savings Fund (NSF)
The NSF is another mandatory fund aimed at providing benefits to employees.
| Contribution Type | Rate | Salary Ceiling (Monthly) |
|---|---|---|
| Employer | 2.5% | MUR 20,900 |
| Employee | 1% | MUR 20,900 |
- Contributions are calculated on basic salary.
- The ceiling is subject to annual review.
Contribution Sociale Généralisée (CSG)
The CSG is a contribution introduced to replace certain previous social contributions. It is calculated on gross monthly remuneration. Different rates apply based on the employee's monthly gross income.
| Gross Monthly Remuneration | Employer Rate | Employee Rate |
|---|---|---|
| Up to MUR 50,000 | 6% | 1.5% |
| Exceeding MUR 50,000 | 9.5% | 4.5% |
- Gross monthly remuneration includes basic salary, allowances, overtime, bonuses, etc.
- There is no ceiling for CSG contributions.
Employers are responsible for calculating, deducting, and remitting both their own and the employee's portions of NPF, NSF, and CSG contributions to the Mauritius Revenue Authority (MRA) by the specified deadlines.
Income Tax Withholding Requirements (PAYE)
Employers must withhold income tax from their employees' salaries and wages under the Pay As You Earn (PAYE) system. The amount of tax to be withheld depends on the employee's total income and the applicable tax rates and allowances.
Income tax rates in Mauritius are progressive. For the income year 2025 (basis year 2024), the rates are applied to chargeable income (gross income less eligible deductions and allowances).
| Chargeable Income (Annual) | Tax Rate |
|---|---|
| Up to MUR 350,000 | 0% |
| MUR 350,001 to MUR 650,000 | 10% |
| MUR 650,001 to MUR 950,000 | 12.5% |
| MUR 950,001 to MUR 1,250,000 | 15% |
| MUR 1,250,001 to MUR 1,550,000 | 17.5% |
| Exceeding MUR 1,550,000 | 20% |
- The PAYE calculation involves annualizing the employee's monthly income, subtracting applicable allowances and deductions, calculating the annual tax liability, and then dividing by 12 to determine the monthly withholding amount.
- Employees must provide their employer with a Tax Deduction Card (TDC) or equivalent information to enable correct calculation of allowances.
Employee Tax Deductions and Allowances
Employees can claim various deductions and allowances that reduce their taxable income, thereby lowering their income tax liability. These reliefs are factored into the PAYE calculation by the employer based on information provided by the employee.
Common deductions and allowances include:
- Personal Relief: A standard amount available to all resident individuals.
- Spouse Relief: Available if the individual's spouse has no income or income below a certain threshold.
- Child Relief: Available for dependent children, with varying amounts based on age and education status.
- Dependent Relief: For other dependent relatives.
- Relief for Medical Expenses: For qualifying medical expenses incurred by the individual or dependents.
- Relief for Interest on Housing Loan: For interest paid on a loan for the acquisition or construction of a primary residence.
- Relief for Donations: For approved donations.
- Relief for Contribution to Approved Pension Scheme: For contributions made by the employee.
- Relief for Solar PV Installation: For investment in solar energy equipment.
The specific amounts for these reliefs are determined annually by the MRA and should be applied based on the employee's declaration.
Tax Compliance and Reporting Deadlines
Employers have strict deadlines for remitting withheld taxes and social contributions and for submitting required reports.
- Monthly PAYE and Social Contributions: PAYE withheld and NPF, NSF, and CSG contributions (both employer and employee portions) must be remitted to the MRA by the 15th day of the following month. Submissions are typically done electronically.
- Annual PAYE Return (Form TD1): Employers must submit an annual return summarizing the total emoluments paid and PAYE deducted for all employees during the income year. This is usually due by July 15th following the end of the income year (which is December 31st).
- Employee Income Statements (Form TD3): Employers must provide each employee with a statement detailing their total emoluments and PAYE deducted during the income year. This statement is required to be issued to employees by July 15th following the end of the income year.
Failure to meet these deadlines can result in penalties and interest charges.
Special Tax Considerations for Foreign Workers and Companies
Employing foreign workers or operating as a foreign company in Mauritius involves specific tax considerations.
- Tax Residence: The tax treatment of foreign workers depends on their tax residence status. A person is generally considered tax resident in Mauritius if they are domiciled in Mauritius and present for any period in the income year, or if they are present in Mauritius for a total of 183 days or more in the income year, or for a total of 270 days or more in the income year and the two preceding income years. Resident individuals are taxed on their worldwide income, while non-residents are generally taxed only on income derived from Mauritius.
- PAYE for Non-Residents: Employers are still required to apply the PAYE system to non-resident employees earning income from sources in Mauritius. However, non-resident employees are generally not entitled to the same personal allowances as residents, leading to a higher effective tax rate from the first rupee earned.
- Double Taxation Agreements (DTAs): Mauritius has an extensive network of DTAs with various countries. These agreements can impact the tax obligations of foreign workers and companies by providing relief from double taxation on the same income. The specific provisions of the relevant DTA must be considered.
- Foreign Companies: Foreign companies operating in Mauritius may be subject to corporate income tax on their Mauritius-source income. The standard corporate tax rate is 15%, although preferential rates may apply to specific sectors or activities (e.g., Global Business companies). Employers who are foreign companies must still comply with all Mauritian payroll tax and social contribution obligations for their employees working in Mauritius.
Understanding these nuances is vital for foreign entities to ensure full compliance with Mauritian tax law.
