Chad is a Central African emerging economy of nearly 20 million people, with roughly 6 million in the active workforce. While naturally endowed with oil, agriculture, and livestock, Chad’s economy is improving under reforms by its tax authority, the Direction Générale des Impôts (DGI).

Understanding local employment laws is important for employers and remote teams looking to recruit Chadian citizens, relocate staff, or hire new talent. This guide is designed to serve as a resource for key components of Chad’s payroll and income tax system. At a glance, we will touch on: 

  • Payroll contributions
  • Income tax structures
  • Obligations for both employers and employees 
  • Other taxes like corporate tax, capital gains, license taxes, and more

For a broader overview of the business environment, we recommend reading our article on doing business in Chad. 

What is Payroll Tax in Chad?

Employers in Chad contribute a corporate payroll tax of 7.5% of total salaries and fringe benefits paid to permanent employees. This tax is calculated monthly and is a direct cost to the employer, since they don’t deduct it from employee salaries but rather pay it in addition to wages. 

The primary institution responsible for managing social security contributions is the Caisse Nationale de Prévoyance Sociale (CNPS). The funds collected by the CNPS are specifically earmarked to provide tangible benefits to employees, offering a cushion against various life and work-related contingencies.

Additionally, employers also make monthly contributions of 1.2% of total salaries and fringe benefits to the National Professional Training Funds (FONAP), known as the apprenticeship tax.

Employer and Employee Responsibilities

The financial burden of funding the CNPS is divided between employers and employees. Both parties are legally obligated to make monthly contributions, which are calculated as a percentage of the employee’s gross salary.

It is the employer’s responsibility to withhold the employee’s share from their monthly salary and then add the employer’s contribution. The combined amount must be paid to the CNPS by the 15th of the month following the one in which the salary was paid. 

The employer’s total contribution to the CNPS amounts to 16.5% of the employee’s gross salary. The percentage is distributed to several funds:

Contribution Type
Rate
Contribution Ceiling
Retirement Pensions
5.0%
CFA 25,000
Family and Maternal Allowances
7.5%
CFA 37,500
Professional Risks (Work-related Accidents and Occupational Diseases)
4.0%
CFA 20,000

These percentages are applied to an employee’s gross salary up to an upper limit of CFA 82,500 and a maximum limit of CFA 500,000 per month. For example, if an employee earns CFA 700,000 per month, the employer’s 16.5% contribution would be calculated only on the first CFA 500,000 of that salary. 

The employee’s contribution is set at a flat rate of 3.5% of their gross monthly salary. Like the employer’s contribution, it is subject to the monthly salary ceiling of CFA 500,000, but has an upper limit of CFA 17,500. 

Personal Income Tax (PIT) in Chad

PIT is levied on the total income of an individual residing in Chad, as well as on income sourced from Chad by non-residents. The PIT divides taxable income into two main categories: work income and capital income. Work income includes salaries, wages, benefits, emoluments, life annuities, industrial and commercial income, agricultural income, non-commercial income, and remuneration of the main managers of limited liability companies. 

For work income, Chad applies a progressive tax rate structure that begins with a tax-free threshold. Employees pay no tax on gross annual work income (after deductions) up to CFA 800,000, providing relief for lower-income earners.

Work Income (CFA)
Rate (%)
800,001 – 6,000,000
10.5%
6,000,001 – 7,500,000
15%
7,500,001 – 9,000,000
20%
9,000,001 – 12,000,000
25%
Above 12,000,000
30%

Capital income is treated differently, with proportional rather than progressive rates. Employees pay different rates on some capital income tax depending on the revenues of the taxpayer.

Capital Income (CFA)
Rate (%)
Capital gains
20%
Receivables, deposits and suretyship incomes
5 / 25%
Rental incomes (for residents)
15%
Rental incomes (for non-residents)
20%
Dividends, incomes from shares
5 / 10 / 20%

In Chad, the tax year follows the calendar year, running from January 1 to December 31. Married couples are generally required to submit a joint income tax return, which includes all worldwide income earned by both spouses.

Before January 1 each year, employees must file an individual income declaration using official forms provided by the tax authorities. This declaration must cover all income received during the previous year. 

Employees must report not only their salaries but also any other earnings, such as income from rental properties, investments, freelance services, or other sources. If applicable, income earned by their dependents or household members should also be included.

To streamline your financial planning and estimate payroll costs, you can use the RemotePeople free Global Payroll Calculator to help calculate these expenses.

Other Important Taxes for Employers in Chad

Corporate Income Tax

The standard corporate income tax rate is 35%. This tax is levied on the company’s net profits realized in Chad. However, there is a provision for a minimum tax. Companies are required to pay a minimum tax of 1.5% of their annual turnover, regardless of whether they made a profit or a loss. The company pays whichever amount is higher—the tax on profit or the turnover tax. 

Business Licence Tax

Any individual or company engaged in trade, industry, or a professional activity must pay a business licence tax. This is an annual tax charged for the right to operate a business in the country. The amount of the tax is based on the company’s turnover from two years earlier (fiscal year N-2). It is calculated at a rate of 0.35% of that turnover.

For new businesses, there is a full exemption during the first year of operation. The business licence tax must be paid by December 31st of each tax year.

The Employer of Record (EOR) Advantage in Chad

For companies looking to hire employees in Chad, keeping up with the different payroll and PIT taxes can be a handful, especially with its new regulatory environment. Partnering with a trusted entity, like an EOR or a Professional Employer Organization (PEO) can provide better value without you needing to establish a legal entity.

At RemotePeople, we:

  • Take on the full responsibility for navigating Chad’s regulatory framework. Our local experts ensure that every aspect of your payroll is managed in full compliance with the Chadian tax laws. 
  • Manage the precise calculation and timely remittance of CNPS contributions (both employer and employee shares) and other withholdings to the correct government bodies, protecting you from the risks of non-compliance, fines, and legal challenges.
  • Handle the gross salary details, including calculating all necessary deductions, processing monthly payroll, issuing payslips, and ensuring your employees are paid and on time. 
  • Manage all HR-related administrative tasks, including drafting legally compliant employment contracts that reflect Chadian labor law, managing employee onboarding, and handling any necessary terminations in accordance with statutory requirements. 
  • Keep you informed about crucial changes in laws and regulations

Our EOR and PEO services allow you to hire and onboard talent in Chad in a matter of days, rather than the months it can take to establish a subsidiary. You also avoid the substantial upfront and ongoing costs associated with setup and maintenance. 

Let us provide you with a seamless and risk-free bridge to accessing the talent and opportunities Chad has to offer. Talk to us today!