Payroll Services in Morocco

Mercans is your premier partner for top-quality payroll services in Morocco, offering both Managed and SaaS solutions. Our steadfast commitment to delivering exceptional payroll outsourcing in Morocco is unmatched. Drawing from extensive experience in the payroll sector, Mercans ensures precise and compliant payroll services, establishing us as the preferred option for businesses of all sizes. Count on Mercans for prompt and accurate payroll transactions, complemented by the convenience of multi-currency payments tailored to the Moroccan market. As your dedicated local payroll provider in Morocco, we feature a team of in-country payroll specialists well-versed in local regulations, providing comprehensive assistance for a seamless payroll experience customized to your business requirements.

Payroll Provider in Morocco – Roles and Responsibilities

At Mercans, we understand that payroll service providers offer much more than just basic payroll calculations. Leveraging advanced technology, we streamline administrative tasks for employers while creating a seamless and engaging experience for employees. Here are some core capabilities that set payroll providers apart:

• Automatic Payroll Processing: Our automated payroll processing significantly reduces the time spent calculating wages and paying employees. Mercans’ flexible payment options ensure efficiency and accuracy in every transaction.
• Tax Withholding and Wage Garnishment: Our systems ensure that all appropriate taxes, garnishments, and other payroll deductions are accurately withheld from employee wages and paid on time, simplifying compliance for your business.
• Tax Filing Services: Mercans offers comprehensive tax filing services, taking care of tax submissions on behalf of our clients. We also assist with year-end reporting, ensuring your business remains compliant with all regulatory requirements.
• Compliance Expertise: Staying current with regulatory changes is crucial. Mercans keeps you informed about updates to wage and tax laws that may affect your business. Our cloud-based payroll systems provide real-time compliance updates, ensuring your payroll processes are always aligned with the latest regulations.
• Payroll Reporting: With Mercans, employers can generate detailed reports covering all aspects of payroll operations, including wages paid, taxes withheld, and hours worked. These insights help you make informed business decisions.
• Employee Self-Service: Our self-service options empower employees to review their pay statements, update withholdings, or change personal information without needing managerial assistance, enhancing their overall experience and satisfaction.
• Product Support: Mercans prides itself on providing exceptional product support. Our expert specialists are available to promptly answer any client questions, with 24/7 support via phone or online chat, ensuring you always have the help you need.

Partner with Mercans for a comprehensive payroll solution that combines advanced technology with unmatched expertise. Experience the benefits of efficient, compliant, and user-friendly payroll services tailored to meet your business needs.

Payroll Solutions in Morocco

Unlock the power of efficient payroll processing in Morocco with Mercans’ Global Payroll Solutions. Our adaptable models guarantee local compliance, enable multi-currency transactions, and integrate effortlessly with global Human Capital Management (HCM) and Enterprise Resource Planning (ERP) systems. Simplifying accurate payments has never been easier.

Explore Our Flexible Models

• SaaS (Software as a Service): Perfect for enterprise businesses handling multi-country payroll, our SaaS model manages complexities arising from diverse data points, locations, currencies, and languages. It enhances operations for maximum efficiency.
• Managed Services: Designed for mid-sized and large enterprises, our Managed Services model supports those managing multi-country payroll, providing on-demand HR expertise that ensures security, reliability, and compliance across all operations.
• HRMS (Human Resource Management System): Ideal for businesses in growth mode, our HRMS model offers a full suite of functionalities, including payroll and benefits. This model allows businesses to choose the features they need, delivering a customized and effective solution.

Experience payroll solutions that go beyond borders, tailored to meet the specific requirements of your business in Morocco and beyond.

Everything you need to know before running payroll in Morocco

Morocco Overview

Introduction to Morocco

Morocco, located on the northwest coast of Africa, is a dynamic country with a population of 37,832,888. With a GDP per capita of $3,527.9 in 2022, the World Bank projects Morocco’s growth to reach 3.1% in 2023. Looking ahead, the Moroccan economy is expected to grow by 3.7% in 2024, 3.6% in 2025, and 4% in 2026, according to government forecasts.

The U.S.-Morocco Free Trade Agreement (FTA), in force since 2006, has significantly boosted trade between the two nations, eliminating tariffs on 95% of consumer and industrial goods. In 2022, the U.S. enjoyed a trade surplus with Morocco of approximately $2.02 billion, with goods exports totaling $3.72 billion, a 33% increase from 2021.

Morocco has historically strong business ties with France, Spain, and other European countries. However, it is increasingly partnering with international firms, creating opportunities for U.S. businesses. The Moroccan Government emphasizes English language training, facilitating business interactions in English, French, and Arabic.

Approximately 150 U.S. companies operate in Morocco, spanning sectors such as consumer goods, pharmaceuticals, aerospace, agro-industrial, oil, gas, renewable energy, and liquefied natural gas (LNG). The American Chamber of Commerce in Morocco, with nearly 300 members, actively fosters the U.S.-Morocco commercial relationship.

Minimum Wages

In Morocco, minimum wages are regulated by a decree from the head of government, setting legal minimums across various sectors. Employers are not allowed to negotiate or reduce the set wages with employees. The minimum wage amounts are in Moroccan Dirham (MAD) and are as follows:

• Public Sector: The minimum wage, effective from September 1, 2022, is MAD 3,500.00 per month.
• Private Sector: The minimum wage, effective from September 1, 2023, is MAD 3,120.00 per month or MAD 16.33 per hour.
• Agricultural Sector: The minimum wage, effective from September 1, 2023, is MAD 2,303.00 per month or MAD 88.57 per day.

Working Hours and Overtime Pay

The Labour Code in Morocco outlines the rights and obligations of both employers and employees regarding working hours, rest days, and annual leave. Here are the key points to consider:

Working Hours

• Standard Workweek: The legal workweek is set at 44 hours, which typically translates to eight hours a day with one rest day.
• Overtime Pay:
  • Daytime Overtime: For overtime worked between 6am and 9pm on weekdays in non-agricultural activities, employees are entitled to an additional 25% of their regular pay.
  • Nighttime Overtime: For overtime worked between 9pm and 6am, as well as on Saturday afternoons and public holidays, employees are entitled to an additional 50% of their regular pay.
  • Weekly Rest Day Overtime: For overtime worked on the employee’s weekly rest day, employees are entitled to an additional 100% of their regular pay.
• Public Holidays: It is illegal for employees to work on paid public holidays. If work is performed on these days, the employer must compensate the employee with 100% additional pay for that day.

Annual Leave

• Entitlement: Employees who have worked for at least six continuous and consecutive months with the same employer are entitled to paid annual leave. The minimum entitlement is 1.5 days of leave per month of service.
• Remuneration: Employees on annual leave are entitled to the same pay as if they had been working. Payment for annual leave must be made at the same time as the monthly salary.
• Special Leave: In addition to annual leave, employees may be entitled to paid leave for special events such as marriage, birth, or death. The duration of this leave varies according to the event.
• Favorable Provisions: Employers may offer more favorable leave conditions through internal regulations, collective bargaining agreements, or employment contracts.

Rest Days

• Weekly Rest Period: Employees are entitled to a weekly rest period of at least 24 consecutive hours, typically from midnight to midnight.
• Suspensions and Compensatory Rest: This rest period can be suspended due to the nature of the establishment’s activities, urgent work, or exceptional work overload. In such cases, compensatory rest must be granted.

Morocco’s Labour Code ensures that employees receive fair compensation for overtime and adequate rest periods, contributing to a balanced work-life environment. 

Payroll Cycle

The payroll frequency in Morocco is generally monthly, with salaries typically paid on the last day of each month.

13th Month Salary

While there is no legal requirement to pay bonuses in Morocco, it’s common practice for employers to provide 13th-month bonuses and/or seniority bonuses as part of employee compensation packages.

Termination and Severance Pay

Termination

Termination in Morocco is permissible under specific circumstances such as serious misconduct, repeated non-serious misconduct within a year, or for economic reasons. However, terminating employment due to poor performance is uncommon and subject to stringent conditions. These conditions include the establishment of agreed-upon performance objectives in writing between the employer and employee, ensuring that these objectives are reasonable, and providing adequate support to the employee to achieve them. Additionally, employers must conduct a preliminary hearing to allow employees the opportunity to defend themselves before termination.

Economic termination follows a detailed and protracted process. Employers must inform employee representatives or the work council, along with union representatives if applicable, at least one month before initiating the dismissal process. Discussions and negotiations must take place to minimize the impact of the planned dismissals, with meeting minutes documented and shared with the labor inspector. The employer must then seek authorization from the governor, providing evidence of financial difficulties or technological/structural reasons for the termination.

Certain categories of employees are protected from unfair dismissal, except during the probationary period. Termination during maternity leave or for discriminatory reasons is strictly prohibited. Third-party approval or termination documents are not required.

In the event of mass layoffs, consultation with employee representatives is mandatory, although the law lacks specificity regarding the definition of a mass layoff. Generally, authorization from the regional governor is necessary but rarely granted.

Severance Pay

Severance pay in Morocco, as outlined in Article 53 of the Labour Code, is contingent on the employee’s tenure and salary. The indemnity granted varies based on the number of years of effective service:

• Up to five (5) years: Ninety-six (96) hours of work
• From six (6) to ten (10) years: One hundred and forty-four (144) hours of work
• From eleven (11) to fifteen (15) years: One hundred and ninety-two (192) hours of work
• Exceeding fifteen (15) years: Two hundred and forty (240) hours of work

Additionally, damages, as per Article 41 of the Labour Code, amount to one and a half (1.5) times the last monthly salary per year of seniority, capped at thirty-six (36) months.

Furthermore, compensation in lieu of notice is mandated by Decree n° 2-04-469, which supplements the Labour Code’s provisions. Executives and non-executives are subject to different notice periods based on seniority:

For Executives

• Less than one (1) year: One (1) month
• From one (1) to five (5) years: Two (2) months
• More than five (5) years: Three (3) months

For Non-executives

• Less than one (1) year: Eight (8) days
• From one (1) to five (5) years: One (1) month
• More than five (5) years: Two (2) months

Additionally, employees are entitled to indemnity for untaken annual paid leave based on the number of days accrued at the termination date, as stipulated in Article 252 of the Labour Code.

Company Registration in Morocco

Establishing a company in Morocco involves a series of regulated steps and careful planning. Below is a detailed outline of the necessary steps and requirements for company formation:

• Selecting the Capital Structure: Choose the appropriate business structure for your company, whether it’s a private limited company, LLC, or sole proprietorship. The structure should align with the specific needs and goals of your enterprise.
• Obtaining a Negative Certificate: To ensure your company name is unique and compliant with regulatory standards, you must obtain a negative certificate. This certificate confirms that the chosen company name is not already in use.
• Drafting Charter Documents: Prepare essential documents such as the Articles of Association and other corporate governance materials. These documents are crucial for outlining the framework and regulations of your company.
• Setting Up a Registered Office and Lease Agreements: Establish your registered office by preparing and signing commercial lease and licensing agreements. This step ensures that your business has a legal physical address and complies with local regulations.
• Obtaining a Tax Registration Certificate: Acquire a Tax Registration Certificate from the tax authorities. This certificate is necessary for applying for incorporation certification and is required for annual filings and compliance with tax laws.
• Issuance of Certificate of Incorporation: Submit all requisite documents to obtain a Certificate of Registration from the Centre for Investment in Morocco. This certificate officially registers your company with the relevant authorities.
• Opening a Bank Account: Open a bank account for your company and secure authorization that the minimum paid-up capital has been deposited. This step is essential for financial operations and compliance with capital requirements.
• Acquiring Business Licenses: Obtain all necessary licenses and permits specific to your business sector from relevant authorities. Ensuring that your company has the appropriate licenses is critical for legal operations.
• Registration with the Morocco Chamber of Commerce and Industry (MCCI): Register your company with the MCCI and the Company Registrar. This registration is a mandatory step for legal recognition and operation of your business in Morocco.

By following these steps, you can ensure that your company formation process in Morocco is smooth and compliant with all local regulations.

Payroll Compliance in Morocco

In Morocco, employers are obligated to submit the following statutory filings. Mercans assists you in completing the necessary filings as per the Moroccan local laws.

Government Requirements

Employer Registration with CNSS

When a business begins operations in Morocco and employs staff, it must register with CNSS by completing the appropriate forms available on the CNSS website. If the business already has an affiliation number, it can register by filling out an additional business form also found on the CNSS website. Employers use the DAMANCOM platform to declare and pay social charges on a monthly basis.

Employee Registration with CNSS

Each new employee must obtain a CNSS number. If an employee already has a CNSS number, it will remain the same throughout their career. A form must be completed and submitted to CNSS for each new hire. These requirements are governed by Dahir No. 1-59-148 of 30th Joumada II 1379 (31 December 1959), and Dahir concerning Law No. 1-72-184 of 15th Joumada II 1392 (27 July 1972).

Employer — Health Insurance (AMO)

Affiliation with “l’assurance maladie obligatoire” (AMO) or mandatory medical insurance is required by law in Morocco according to Article 114 of Law No. 65-00.

Ongoing Compliance Requirements

Monthly Individual Income Tax (IR) Withholding Obligation

Employers must withhold “Impôt sur le revenu” (IR) from employees’ payrolls monthly and remit it on behalf of the employees. The IR return must be filed with the local tax office, and the payment settled by the 30th of the following month. For example, payroll tax for October should be paid by 30 November. Salaries and wages are subject to Moroccan IR at progressive tax rates from 0% to 38%, and specific rates from 10% to 30%.

• 30% for service providers without professional tax
• 20% on the gross salary for up to 10 years for employees of companies with CFC status, except banking and insurance firms

Specific Individual Income Tax (IIT) Measures

Extension of Income Tax Exemption for New Employees

Gross monthly salaries up to MAD 10,000, paid to employees hired under permanent contracts during the first two years of a new organization’s operation, are exempt from payroll tax for up to 10 employees. Initially valid until December 2022, this incentive has been extended until December 2026 by the FY2023 Finance Bill. The government also covers the employer’s CNSS contribution and the vocational training tax.

36-Month IIT Exemption for New Permanent Contracts

The 2023 Finance Law extends the salary income exemption for newly recruited employees for 36 months from their hiring date, under these conditions:

• The employee must be hired under a permanent employment contract between 1 January 2021 and 31 December 2026.
• The employee must not be older than 35 years at the time of their first employment contract.

The standard business expenses deduction rate has been increased from 20% to 35% for employees with an annual taxable income up to MAD 78,000, and to 25% for incomes above this threshold. The deduction ceiling has been raised from MAD 30,000 to MAD 35,000.

Annual Individual Income Tax (IR) Declaration

Employers must file an annual payroll declaration using the “Etat 9421” form by the end of February each year. This ensures compliance with annual tax reporting obligations.

Payroll Taxes in Morocco

Social Security Contributions

In Morocco, the Caisse Nationale de Sécurité Sociale (CNSS) fund administers the sole mandatory social security scheme. While other private social security entities exist in the country, participation in them is optional.

Employees are required to contribute to the CNSS-managed social security scheme. These contributions are determined as a percentage of the gross salary, with certain allowances and indemnities exempted. The contribution rates and their corresponding employer portions vary depending on the component and are subject to a monthly salary limit of MAD 6,000. These components include family allocation, social allocation, professional training, and mandatory medical care.

For foreign assignees, if a social security treaty exists between Morocco and their home country, they may be eligible for exemptions and continue contributing to their foreign social security regime, adhering to the conditions outlined in the respective treaty.

Regarding consumption taxes, Morocco imposes Value-Added Tax (VAT) according to the Moroccan Tax Code. VAT applies to all commercial, industrial, and handicraft transactions within Morocco, as well as import operations. The standard VAT rate is set at 20%, while specific operations may qualify for lower rates of 7%, 10%, or 14%.

Unlike some countries, Morocco does not levy luxury taxes.

Personal Income Taxes

Individuals who establish their tax residency in Morocco are liable to pay individual income tax on their global earnings. Conversely, those without tax residency in Morocco are only taxed on income sourced within the country.

The individual income tax is determined by a progressive scale based on annual taxable income:

• Up to MAD 30,000: Exempted
• MAD 30,001 to 50,000: 10%
• MAD 50,001 to 60,000: 20%
• MAD 60,001 to 80,000: 30%
• MAD 80,001 to 180,000: 34%
• Over MAD 180,000: 38%

Employee Benefits in Morocco

In Morocco, labor laws outline a comprehensive set of benefits aimed at ensuring financial security, time off, and social protection for all employees. Compliance with these regulations is crucial for employers to operate within the legal framework.

• Paid Time Off: Employees accumulate paid annual leave based on their tenure, with a minimum entitlement of 18 days per year. This allowance can increase depending on factors like service duration and industry. Additionally, employees are entitled to paid time off for the country’s 13 official national holidays.
• Leave for Medical Reasons: Employees with a qualifying contribution period are eligible for sick leave benefits, which typically start on the fourth day of illness and provide two-thirds of the employee’s average daily wage. Female employees also receive 14 weeks of paid maternity leave at their full salary.
• Other Mandatory Benefits: Employers and employees both contribute to Morocco’s social security system, which covers pensions, health insurance, work injury insurance, and unemployment insurance. The contribution rates vary depending on the specific social security program. Moroccan law allows for probationary periods in employment contracts, with typical durations of three months for executive staff and six months for non-executive staff. Overtime work requires mutual agreement and is subject to specific regulations, with higher pay rates for work done at night, weekends, and public holidays. Termination procedures involve adherence to specific notice periods based on an employee’s service length, with severance pay mandated by law and calculated based on years of service.
• Optional Benefits: In addition to mandatory benefits, Moroccan employers often offer optional perks to attract and retain talent. These may include financial benefits like 13th-month bonuses and seniority bonuses, health and wellness benefits such as supplemental health insurance and fitness allowances, work-life balance benefits like flexible work arrangements and childcare allowances, and professional development benefits such as job training and educational opportunities.
• Health Insurance Requirements: Health insurance coverage for formal sector employees in Morocco is mandated under the Assurance Maladie Obligatoire (AMO) program, offering financial protection for medical expenses incurred by workers and their dependents. Employers are responsible for enrolling eligible employees in the AMO program and regularly declaring wages and workdays to the relevant social security institution.
• Retirement Plans: Morocco’s retirement system comprises various plans catering to different employee segments. Public sector employees are enrolled in schemes managed by the Caisse Marocaine de Retraite (CMR), while private sector employees can participate in both mandatory and voluntary plans, including the Moroccan Inter-professional Retirement (CIMR) scheme and personal retirement savings plans (PER) offered by financial institutions. Each plan offers different benefits and flexibility, allowing individuals to save for retirement based on their circumstances and preferences.

Streamline Payroll with Mercans’ Technology and Integrations

• Technology: Explore the forefront of innovation with Mercans’ cutting-edge technology that powers our global payroll solutions. Learn more about our technological prowess here
• Integrations: Seamlessly integrate your Human Capital Management (HCM) systems with Mercans’ solutions, enhancing efficiency and connectivity. Discover the power of integration here
• Recognitions: Join a partner recognized for excellence. Mercans has earned accolades for its commitment to delivering exceptional payroll services. Explore our awards and recognitions here