Mali Payroll and Income Tax Guide

Learn about payroll and income taxes in Mali, including employer contributions and tax treaties.

Mali Services

Content

11 minutes read

What Is Payroll Tax in Mali?

Employer and Employee Responsibilities

Employer Payroll Tax Rates in Mali

Overview of Income Tax in Mali

Key Components of Payroll in Mali

Common Payroll Errors and How to Avoid Them in Mali

Tax Treaties and Withholding Taxes

Mali Payroll Tax Calculator

Mali might be a landlocked nation in West Africa, but it houses a population of over 21 million! The country’s workforce is young, growing (currently at 6.93 million), and skilled, especially in urban centers such as Bamako, the capital. Beyond its human capital, the country is also rich in natural resources, and its strategic location provides an easy link to other West African markets.

The Malian tax system is similar to that of most countries (think income tax, social security contributions, and health insurance), but there are some specifics, such as “who pays what” and “when to pay,” that you need to be aware of. For instance, employers have more payroll contributions compared to the employees, and each of the payments made must be properly documented.

If you want to do business in Mali, you need to understand its tax system first before making any moves. Let’s discuss some of these vitals and what you need to know concerning payroll and income tax in Mali.

What Is Payroll Tax in Mali?

The payroll tax is the percentage of money levied on an employee’s paycheck. This includes bonuses, allowances, benefits, and all other forms of compensation. The tax is calculated based on the employee’s gross salary and withheld at source before salaries/wages are disbursed.

Definition and Purpose of Payroll Tax

Payroll tax in Mali is a combination of social security contributions and a health insurance scheme, all managed by the INPS (Institut National de Prévoyance Sociale), or the National Social Welfare Institute. The main purpose of this fund is to finance social security programs such as pensions, survivor benefits, family allowances, disability support, health insurance, and so on.

However, this tax differs from income tax, although they’re both statutory contributions for residents and non-resident employees. While personal income tax is a direct tax imposed on the individual’s (in this case, your employee’s) earnings, including employment income, payroll tax is levied only on employment income. Also, while payroll taxes fund social amenities for workers, income taxes finance public programs and government initiatives in the country.

Employer and Employee Responsibilities

The payroll tax in Mali is split into two main components: the INPS contributions and compulsory health insurance called AMO (Assurance Maladie Obligatoire). Both employers and employees are mandated to contribute towards these programs.

In addition, employers have other statutory contributions to add to the employee’s gross pay, including contribution forfaitaire, housing tax, and national employment agency (ANPE) tax. Keep in mind that these are employer-only taxes, and employees are totally exempted from paying them. We’ll share more details on it in the next section.

Overall, employers in Mali are required to calculate, withhold, and remit their statutory contributions and employees’ contributions to the INPS, AMO, and other tax authorities. All the payments must be calculated accurately and paid within the deadlines set by these bodies. In addition, employers must submit a quarterly statement of wages/salaries subject to contributions whenever they remit the funds to the government.

Employees, on the flip side, have the responsibility to keep you in check. They must ensure that the contributions are correctly deducted as reflected on their payroll. In return for these payments, they get access to medical care through AMO, paid leave, pensions, family allowances, and other benefits.

Employer Payroll Tax Rates in Mali

The payroll tax is calculated as a percentage of the employee’s gross salary. The employer’s portion of the payment is usually added to the employee’s salary, while the employee’s share is deducted from their paycheck.

Breakdown of Employer Contributions

Here is a breakdown of the mandatory payments you need to contribute as an employer in Mali:

INPS Contributions: This is the statutory social security contribution in Mali. Employers pay between 14.4% – 17.4%, depending on the risk level the job requires. This payment covers the pensions, family benefits, work-related accidents, and disability (or death) insurance. Employees, on the other hand, pay 3.6%.
AMO (Health Tax): Both the employer and employee are required to pay a compulsory health insurance tax. This tax is used to provide healthcare coverage to workers and their dependents. Employees pay 3.06% of their gross monthly salary, while employers pay 3.5%.
Contribution Fortfaitaire: The contribution Forfaitaire is a flat-rate tax added to social security contributions to fund social schemes in Mali. It is calculated as a percentage of the total gross salary and capped at 3.5%.
Housing Tax: This tax supports public housing projects and related social infrastructure. The rate is also 3.5% of the employee’s gross wages/salary.
National Employment Agency (ANPE) Tax: The ANPE tax funds workforce development and other initiatives to reduce unemployment in Mali. It is 1% of the employee’s gross salary/wages.

In total, employees pay 6.66%, while employers pay 25.56% – 28.56%, including the ANPE tax. Here’s a full breakdown of the payment as it applies to the employer and employee in Mali:

Contribution Type	Employer Contribution	Employee Contribution
INPS	14.4% – 17.4%	3.6%
AMO	3.5%	3.06%
Contribution Forfaitaire	3.5%	–
Housing Tax	3.5%	–
ANPE Tax	1%	–
Total	25.9% – 28.9%	6.06%

Overview of Income Tax in Mali

Malian residents are taxed on their worldwide income, while non-residents are taxed only on income earned in the country. Residents in this case are individuals or companies that have stayed in Mali for 183 days or more. Foreign workers and employers are also required to pay tax in the country.

Let’s take a more detailed look at how the income tax applies to companies and their workers:

Personal Income Tax Brackets and Rates

The personal income tax (ITS – Impôt sur les Traitements et Salaires) in Mali follows a progressive tax system, which means that the tax paid depends on the worker’s level of income. The personal income tax is managed by the Directorate General of Taxes (DGI – Direction Générale des Impôts). As an employer, you have the responsibility to deduct and remit the tax to the DGI on your employee’s behalf.

Here’s a breakdown of the tax rate:

Annual Taxable Income (XOF)	Tax Rate
Up to 330,000	0% (Exempt)
330,001 – 578,400	5%
578,401 – 1,176,400	12%
1,176,401 – 1,789,733	18%
1,789,734 – 2,384,195	26%
2,384,196 – 3,494,130	31%
3,494,130 and above	37%

This rate only applies after social security contributions and the special solidarity allowance are deducted. Non-residents are taxed at a flat 30% on income sourced in Mali, such as salaries, bonuses, and benefits.

Tax-Free Allowances and Deductions

There are several allowances and deductions that you are liable to reduce your taxable income in Mali. This includes:

Family Allowances: These are payments from social welfare organizations or the state for family support, such as child benefits or government family support payments. They do not count as taxable income.
Severance Pay: Payments made to employees after contract termination or retirement are exempt from personal income tax as long as they’re within the limits set by the labor code.
Salary Increase for Family Responsibilities: If you plan to increase your employee’s salary to cover family responsibilities, the extra pay added to cover those expenses is tax-free. But for this to be effective, you need to give every employee in the same family situation the same amount.
Allowances for Work-Related Expenses: All allowances paid to cover work-related expenses, such as travel fees, risk allowances, or other expenses approved by law, are tax-free.
Compensation for Work Accidents: Work accidents are imperative, and the Malian government recognizes this. The temporary payments awarded to employees who sustain work-related accidents are exempted from income tax.
Social Security Contributions: The mandatory social security contribution is deductible from taxable income. For context, this means that the portion of the employee’s salary paid into the social security system reduces the total amount of income subject to the PIT.

Key Components of Payroll in Mali

Here’s a simple breakdown of the payroll system in Mali:

Payroll Cycle and Pay Slips

Mali follows a monthly payroll cycle, and salaries are paid at the end of the month (on the last working day). You may find some employers pay bi-weekly or weekly for daily workers, though it’s rare. Some employers go further to offer a performance-based bonus or a 13th-month salary, but it’s not compulsory and is usually stated in the contract if such payments are made.

As an employer, you’re required to provide a monthly payslip that includes the employee’s earnings, deductions (social security contributions, etc.), overtime, and the net salary payable. You must also include the pay period and gross pay in the breakdown of all earnings, in line with the Malian labor code. The pay slip can be digital or in a booklet, provided that it is indelible for record-keeping purposes.

All the information on the payslip must be duplicated in another record called the “payment register.” This register must contain all payments made to every employee, including cases where they’re absent from work due to work-related accidents, sickness, etc.

Employer Responsibilities for Payroll Tax Compliance

As an employer in Mali, you’re responsible for calculating and withholding the IRS and social security contributions from employee salaries. You are also mandated to file and remit all the withheld taxes on the 31st March of the following year.

Common Payroll Errors and How to Avoid Them in Mali

Employee misclassification: In Mali, employees and independent contractors are subject to different tax and social security obligations. Misclassifying workers can lead to penalties, back payment of contributions, and legal disputes.

What to do: To avoid this, ensure all contracts align with the Malian Labor Code. Better, partner with a recruitment and EOR agency in Mali to help you recruit and onboard employees compliantly.
Incorrect tax calculations: The Malian Government requires that income taxes, social security contributions, and other deductions be calculated accurately. Any errors in deduction amounts, exemptions, or tax rates can lead to penalties, interest, and back payments.

What to do: Always document the employee’s payslips and calculate deductions as outlined by the labor law. You can also use an EOR in Mali to ensure compliance with Malian labor law.
Overtime miscalculations: The standard working hours in Mali are pegged at 40 hours per week. Overtime is permitted but must be compensated at a 10%–25% rate. Failing to track or properly compensate overtime can lead to labor disputes and monetary penalties from the Malian Government.

What to do: Use time-tracking tools to record all hours worked by your employees. For calculations, you can use an EOR platform to ensure they are correct and in line with the Malian Labor Code.
Ignoring collective bargaining agreements: Many sectors in Mali have collective bargaining agreements (conventions collectives) that establish minimum wages, benefits, and working conditions specific to that industry. These agreements often supersede general regulations. Ignoring these CBAs gives workers and unions strong grounds to file legal action.

What to do: Confirm whether your industry is covered by a collective bargaining agreement and comply accordingly.
Poor record-keeping: When remitting payroll funds, the government requires a quarterly report detailing wages subject to contributions. Employers must also maintain a separate ledger containing all payments made to employees.
Incomplete or disorganized records complicate audits and may result in penalties.

What to do: Use automated tools like Remote People to collect and organize employee data in a single dashboard.

Tax Treaties and Withholding Taxes

Mali has several tax treaties and withholding laws to prevent double taxation and reduce withholding tax on cross-border income. Let’s explore briefly each and how it benefits you:

Mali Double Taxation Treaties

Mali has several bilateral investment treaties with eight countries: Algeria, Canada, Egypt, China, Morocco, the Netherlands, Germany, and Switzerland. This means that if you’re from any of these countries, your income earned in Mali can benefit from the treaty protections to reduce tax burdens.

They have also signed BITs with 14 other countries, including Qatar, Chad, Benin, and the United Arab Emirates, but they are not yet in force.

Withholding Tax on Foreign Income

Payments made to non-residents for investments or other Mali-sourced income are subject to withholding taxes (WHT) at flat rates. Royalties are subject to 17.5% WHT, and 10% for dividends. Services or technical fees are subject to 17.5% WHT, while interest is subject to 15% WHT. Employers or non-resident employees must file these taxes and comply with statutory deadlines to avoid penalties.