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Payroll & Tax in Morocco

Morocco payroll & taxation

Shield GEO is not operating in Morocco at this time. However, feel free to contact us and we’ll do our best to assist you with your employment needs or connect you with a trusted partner. 

 

Foreign companies operating in Morocco may find it challenging to deal with the complexities of the country’s tax system. The primary concerns for a foreign company that needs to comply with tax laws in Morocco are: Individual income tax (IIT) for employees in Morocco, social security costs, VAT, withholding tax, business tax and permanent establishment concerns.

Your Payroll Options in Morocco

Remote Payroll

A remote payroll in Morocco is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Morocco. This applies to both local and foreign employees. One option for a non-resident company to payroll its employees (local and foreign) in Morocco is to use a fully outsourced service like a GEO or PEO which will employ and payroll the staff on their behalf.

Local Payroll Administration

In some cases, a company will register their business in Morocco under one of the forms available but prefer to have another company administer its payroll. This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.

Internal Payroll

Larger companies with a commitment to Morocco may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete the incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a Moroccan payroll and can fulfil all tax, withholding tax and payroll requirements.

This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Moroccan employment laws.

Fully Outsourced Payroll & Employment

Shield GEO does not operate in Morocco.

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Setting up payroll in Morocco

Information Explanation
Currency ?

Morocco dirham, MAD

Corporate Income Tax Rate

The current corporate income tax rate (impôt sur les sociétés) is 30%. However, a special rate of 37% applies to insurance and banking and financial institutions.

Preferential rates apply to companies with a taxable income of MAD 300,000.

Payroll Tax

No

Sales Tax

VAT is imposed on the supply of taxable goods and services in Morocco. Taxable persons charge VAT on their taxable supplies (output tax) and are charged with VAT on goods  which they receive (input tax).

The current standard rate of VAT imposed on taxable goods and services is 20%, with reduced rates of 14%, 10% and 7%.

Withholding Tax

Morocco imposes withholding tax (WHT) on certain classes of income earned by non-residents:-

  • Dividends: 15%
  • Royalties, patents, know-how, technical assistance fees and remuneration for most services: 10%
  • Interest: 10%/20%/30%
  • Rental on equipment: 10%
  • Indemnity for non-permanent employees: 30%
 A reduced rate may be available under an applicable Double Tax Treaty.
Other Tax
  • Professional tax, on gross rental value of the business premises: 10-30%
  • Local services tax; annual tax on the rental value for professional tax purposes: 6.5-10.5%
  • Registration duties, on transfers of real property or businesses: 1-6%
  • Contribution to support social cohesion (la contribution pour l’appui à la cohésion sociale); payable by companies, public institutions, associations and other similar organizations, funds liable to corporation tax, coordination centers and other legal entities with a net income exceeding MAD 15million: 0.5 – 2%

Tax Figures

Information Explanation
Corporate Income Tax ?

The current corporate income tax rate (impôt sur les sociétés) is 30%. However, a special rate of 37% applies to insurance and banking and financial institutions.

Preferential rates apply to companies with a taxable income of MAD 300,000.

Income Tax Rate ?
Grossed income Tax Rate (%)
0 - MAD 30,000 0
MAD 30,001 - 50,000 10
MAD 50,001 - 60,000 20
MAD 60,001 - 80,000 30
MAD 80,001 - 180,000 34
Above MAD 180,001 38
Payroll Tax ?

No

Sales Tax ?

VAT is imposed on the supply of taxable goods and services in Morocco. Taxable persons charge VAT on their taxable supplies (output tax) and are charged with VAT on goods  which they receive (input tax).

The current standard rate of VAT imposed on taxable goods and services is 20%, with reduced rates of 14%, 10% and 7%.

Withholding Tax ?

Morocco imposes withholding tax (WHT) on certain classes of income earned by non-residents:-

  • Dividends: 15%
  • Royalties, patents, know-how, technical assistance fees and remuneration for most services: 10%
  • Interest: 10%/20%/30%
  • Rental on equipment: 10%
  • Indemnity for non-permanent employees: 30%
 A reduced rate may be available under an applicable Double Tax Treaty.
Employee Social Security (EE SS)

Employees are required to make the following contributions:

1. Death and other daily compensation for illness, pregnancy etc: 4.29% (capped at MAD 6,000)

2. Mandatory health insurance: 2.0% (uncapped)

For more details, please refer to the section on Employment.

Employer Social Security (ER SS)

Employers are required to make the following contributions:

1. Family benefits: 6.4%

2. Death and other daily compensation for illness, pregnancy etc: 8.6% (capped at MAD 6,000)

3. Professional training tax: 1.6% (uncapped)

4. Mandatory health insurance: 3.5% (uncapped)

For more details, please refer to the section on Employment.

Morocco

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