Madagascar is an island country in the Indian Ocean, situated off the southeastern coast of Africa. Despite an abundance of natural, diverse resources, Madagascar is one of the world’s poorest countries, with a workforce of 16.5 million people (2024) and a GDP of 18.71 billion US dollars.

The economy of Madagascar is reliant on agriculture, tourism, and mining, making it vulnerable to fluctuations in the growth and export of natural resources such as vanilla, coffee, and minerals. Most of the workforce in Madagascar is involved in these industries, as well as the fishing and foresting sectors.

Companies based in other countries often hire in Madagascar due to its low cost of living, growing levels of bilingual workers, and access to the African/Asian markets. It’s important when hiring in Madagascar to understand the employee benefits that workers are entitled to, ensuring compliance with Madagascan labor laws at all stages.

This help guide will provide an overview of local labor laws that must be adhered to, including information on employee benefits such as annual leave, set working hours, and overtime compensation. We’ll also explain how Remote People can help simplify doing business in Madagascar through our Employer of Record (EOR) services.

Madagascan Employment Laws

Madagascan labor laws are mainly informed by the Malagasy Labor Code, Law No. 2003-044. This set of laws covers a range of employee/employer rights and obligations, including the right to set working hours, contact termination rules, and paid leave.

Employers must follow these laws when employing in Madagascar and should strongly consider consulting with legal professionals to ensure that all labor laws are strictly adhered to.

Mandatory Employee Benefits in Madagascar

There is a range of mandatory employee benefits in Madagascar, which we’ll explain in the following sections.

Social Security Contributions

Madagascar operates under a Social Security System, which provides social and financial protection to those working in Madagascar. Employers and employees must make contributions to this system to be eligible for benefits such as healthcare, an old-age pension, and an unemployment benefit.

Employers must contribute to the National Pensions Fund at the rate of 13% per employee. They must also contribute 5% towards the statutory health organization.

Employees must contribute 1% of their salary towards the National Pensions Fund and 1% towards the statutory health organization.

Annual Paid Leave

Employees in Madagascar are entitled to a minimum of 30 days of annual leave upon completion of 12 months of continuous service.

Annual leave can be accrued over 3 years with the consent of the employer. When taking annual leave, employees must take a minimum of 2 weeks consecutively. 

Madagascan workers are also entitled to take 12 national holidays as paid days off (if they occur on working days). These days do not count towards holiday entitlement.

Working Hours

Normal working hours in Madagascar are 40 hours per week spread over 5 or 6 days. Generally speaking, most businesses operate between 8:30 am and 5 pm, with lunch occurring between 12 pm and 1 pm.

Workers are entitled to 24 consecutive hours of rest per week, which typically falls on a Sunday for most workers. Employees should also be given a break of at least 30 minutes for every 6 continuous hours worked.

Hours worked between midnight and 5 am count as night work and should be compensated with reduced working time or increased pay.

National Minimum Wage

Minimum wage in Madagascar is determined by the government or in a collective agreement between the employer and the employee.

The minimum wage in Madagascar as of 2026 is 262,680 MGA per month. Workers in the agricultural sector must be paid a minimum of 266,500 MGA per month. The minimum wage may increase based on how many years of service an employee has completed.

The gross minimum wage amount is calculated based on working 40 hours per week or 173.33 hours per month for workers in the non-agricultural sector, or 200 hours per month for agricultural workers.

Overtime Pay

Any hours completed outside of an employee’s standard contract count as overtime hours. Overtime must be paid at the rate of 130% of their typical hourly rate for the first 8 hours of overtime, and 150% of their typical hourly rate for hours worked beyond the initial 8 hours. Employers are not permitted to work more than 173.33 hours per month, including overtime hours.

Paid Public Holidays

Public holidays in Madagascar are counted separately from paid leave and are typically given as paid days off. The Madagascan public holidays are as follows:

  • January 1: New Year’s Day
  • March 8: International Women’s Day
  • March 20: Eid al‑Fitr (movable date)
  • March 29: Martyrs’ Day
  • April 5: Easter Sunday (movable date)
  • April 6: Easter Monday (movable date)
  • May 1: Labour Day
  • May 14: Ascension Day (movable date)
  • May 24: Whit Sunday (Pentecost) (movable date)
  • May 25: Whit Monday (movable date)
  • May 27: Eid al‑Adha (movable date)
  • June 26: Independence Day
  • August 15: Assumption of Mary
  • November 1: All Saints’ Day
  • December 25: Christmas Day

Paid Sick Leave

Employees in Madagascar are entitled to a maximum of 6 months of paid sick leave. This may be extendable if the worker is chronically ill.

The first 3 days are typically unpaid, and the income for the following period up to 6 months should be paid at a minimum of 50% of the minimum wage – workers can claim the other 50% from social security funding.

Workers cannot be fired while on sick leave, but their contract may be suspended.

Maternity Leave

Female workers in Madagascar can take 14 weeks of paid maternity leave if they have a baby. This is usually taken as 6 weeks before birth and 8 weeks after birth. This can often be extended by an additional 3 weeks of leave in case of pregnancy/birth-related sickness.

Workers must provide notice to their employer with their intention of when they plan to take maternity leave. A worker’s income during maternity leave must be a minimum of 75% of their normal salary, and they are protected from dismissal during this period, unless under exceptional circumstances.

Paternity Leave

There is no statutory paternity leave in Madagascar at present.  However, the labor code does provide 10 days of leave for family events each year, which many fathers in Madagascar use if their partner/spouse gives birth to a child.

Pensions

Workers in Madagascar can retire when they reach the age of 60 and may start claiming their old-age pension, which is funded by the social security system. There is also a range of supplementary and voluntary pension plans that people choose to fund to provide extra savings at pension age.

Severance Pay

Severance pay may be payable to workers who have been dismissed by their employer for economic reasons. In this case, severance pay is payable at the rate of 10 days’ wages for each year of service, to a maximum of 6 months’ worth of payments.

Supplementary Employee Benefits in Madagascar

It’s strongly advised that employers consider offering employees supplementary benefits alongside their mandatory benefits. This is to increase the length of time an employee works for an employer and attract recruits to job roles. Some examples of supplementary benefits employers could offer include:

  • Performance bonuses
  • Access to private health insurance
  • Advanced training allowances
  • Expenses for transport, meals, or housing
  • Enhanced pension packages
  • Extra annual, maternity, or paternity leave
  • 13-month bonus
  • Employee discount schemes

Optimize Employee Benefits with Remote People

Madagascar’s labor laws can seem complicated to those unfamiliar with the country, which is where Remote People can simplify this process.

Our Employer of Record (EOR) services ensure compliance with Madagascar’s labor laws, covering local customs, tax obligations, legal processes, and mandatory employee benefits. By handling these responsibilities, we allow you to focus on other critical areas of your business.

Doing business in Madagascar can be a more stress-free, seamless experience when working with an EOR provider, who may also be able to help with classification processes, recruitment, and company incorporation.

Contact Remote People today to get started with our Employer of Record (EOR) services and begin expanding your business into Madagascar.