January 2025 payroll: getting the new income tax scale right

The new personal income tax (IR) scale introduced by the Finance Act (Loi de Finances) 2025 applies to income earned from 1 January 2025. January payrolls are therefore the first affected. Here is what to check in your payroll software and on your payslips.

The monthly scale

The statutory scale is annual. Payroll uses the monthly scale, obtained by dividing the bands and the amounts to deduct by twelve.

Monthly net taxable salary (MAD)	Rate	Monthly amount to deduct (MAD)
0 to 3,333.33	0%	0
3,333.34 to 5,000	10%	333.33
5,000.01 to 6,666.67	20%	833.33
6,666.68 to 8,333.33	30%	1,500
8,333.34 to 15,000	34%	1,833.33
Above 15,000	37%	2,283.33

As a reminder, the annual scale exempts the first MAD 40,000 of net taxable income (up from MAD 30,000) and caps the marginal rate at 37% above MAD 180,000 (down from 38%).

Other settings to update

1. Dependants: MAD 500 per dependant per year, i.e. MAD 41.67 a month, up to six dependants (MAD 3,000 a year). Children remain dependants up to the age of 27, provided their annual income does not exceed MAD 40,000 (with no age limit for a disabled child).
2. Meal vouchers: the exemption rises from MAD 30 to MAD 40 per working day, up to 20% of taxable gross salary. Vouchers can now be issued electronically. The exemption cannot be combined with food allowances paid to employees on remote work sites.
3. Internship allowances: for internship agreements signed from 1 January 2025, the exemption of up to MAD 6,000 a month is limited to 12 months, but it is open to all interns registered with ANAPEC (the national employment agency). Agreements signed before 2025 remain under the old rules.

Back pay and bonuses: which scale applies?

The new scale covers income earned from 1 January 2025. According to the position of the Directorate General of Taxes (DGI) in its circular (note circulaire) No. 717 on the General Tax Code (CGI), income is earned when the taxpayer has an indisputable right to it. In practice:

• Back pay for 2024 paid in 2025 is taxed under the 2024 scale, because it tops up pay for the previous year.
• A bonus based on 2024 results (year-end, profit-sharing or productivity bonus) paid in 2025 falls under the 2025 scale, because it is earned only once the results are known, i.e. in 2025.

The DGI circular on the Finance Act 2025, expected in the coming weeks, should confirm these rules. Set this up carefully for the February to April payrolls, when annual bonuses are usually paid.

How much better off are your employees?

Annual tax before dependants, by net taxable income:

Annual net taxable income	IR 2024	IR 2025	Saving
MAD 40,000	MAD 1,000	MAD 0	MAD 1,000
MAD 50,000	MAD 2,000	MAD 1,000	MAD 1,000
MAD 84,000	MAD 11,360	MAD 7,200	MAD 4,160
MAD 150,000	MAD 33,800	MAD 29,000	MAD 4,800
MAD 250,000	MAD 70,600	MAD 65,100	MAD 5,500

Workings for MAD 84,000: in 2024, 84,000 × 34% − 17,200 = MAD 11,360; in 2025, 84,000 × 30% − 18,000 = MAD 7,200.

On top of this comes the higher deduction for dependants: for a married employee with two children, 3 × 140 = MAD 420 more per year.

The net gain is therefore around MAD 350 to 450 a month for a middle manager. It is good news to share with your staff, along with an explanation of why their take-home pay has gone up.

Common mistakes

• Leaving the old scale active in the software, or applying the new one only to basic salary and not to variable pay.
• Forgetting to update the meal voucher cap: anything above MAD 40 a day is taxable.
• Applying the 2025 scale to 2024 back pay.
• Keeping the old deduction of MAD 30 a month per dependant.

What about the SMIG?

Under the April 2024 social agreement, Decree No. 2.24.1122, adopted on 26 December 2024, raises the minimum wage (SMIG) to MAD 17.10 an hour from 1 January 2025 (+5%). The agricultural minimum wage (SMAG) rises to MAD 93 a day on 1 April 2025. A second 5% increase is planned for 2026. Check the impact on salaries close to the minimum.

Our Payroll & HR team can check your software settings and review your first 2025 payrolls. To discuss your situation, contact us.