After the major overhaul of the personal income tax (IR) scale in 2025, the 2026 Finance Act (Loi de Finances) makes targeted adjustments. The scale itself is unchanged, but several settings need updating in your payroll software from January 2026.
The tax reduction rises from 500 to 600 dirhams (MAD) a year per dependant – 50 dirhams a month. The cap rises from 3,000 to 3,600 dirhams, still for a maximum of six dependants. The measure applies to income earned from 1 January 2026.
The conditions are unchanged. A wife, children and legally fostered children count as dependants if their annual income does not exceed 40,000 dirhams and they are aged 27 or under (no age limit for a disabled child). A female taxpayer is entitled to the reduction for her husband and children where they are legally her dependants.
Example: a married employee with three children receives 4 × 600 = MAD 2,400 of reduction a year, compared with MAD 2,000 in 2025 and MAD 1,440 in 2024.
As provided by the 2025 Finance Act, pensions from basic schemes – the National Social Security Fund (CNSS), the CMR and the RCAR – are exempt from IR from 2026. The 2026 Finance Act extends this exemption to annuities paid by the CIMR to private-sector retirees under group supplementary pension contracts, on the conditions set out in Article 28-III of the General Tax Code (CGI). Other supplementary pensions remain taxable.
If you still pay pensions or top-ups to former employees, check exactly which scheme they fall under before applying the exemption.
Employees of companies with CFC status (excluding banks and insurers) can benefit from a 20% IR rate for a maximum of ten years from the date they take up their post, whether continuously or not. They can opt for the progressive scale instead by applying to their employer before 1 February of the year. The employer attaches a list of these employees to its payroll return.
The new rules cover employees recruited since 1 January 2026, those who had not used up the ten-year period by 31 December 2025 and, for the remaining period, those who had used up the former five-year period by 31 December 2017.
For pay that sports companies give to professional athletes, coaches, trainers and technical staff, a tapering allowance applies: 90% in 2026, 80% in 2027, 70% in 2028 and 60% in 2029.
Under the April 2024 social agreement, the decree adopted by the Government Council on 18 December 2025 raises the minimum wage (SMIG) to 17.92 dirhams an hour from 1 January 2026. The agricultural minimum wage (SMAG) rises to 97.44 dirhams a day on 1 April 2026. Adjust your pay scales from the January payroll, and check the knock-on effect on wages close to the minimum and on contributions.
The annual scale is the same as in 2025: exemption up to 40,000 dirhams of net taxable income, then 10%, 20%, 30%, 34%, and 37% above 180,000 dirhams.
For an employee whose annual IR before reductions is 15,000 dirhams:
| Situation | IR 2025 | IR 2026 | Annual gain |
|---|---|---|---|
| Single | MAD 15,000 | MAD 15,000 | 0 |
| Married, no children | MAD 14,500 | MAD 14,400 | MAD 100 |
| Married, 2 children | MAD 13,500 | MAD 13,200 | MAD 300 |
| Married, 5 children | MAD 12,000 | MAD 11,400 | MAD 600 |
The gain is modest, but it must show correctly on payslips.
Our payroll & HR team can check your 2026 payroll settings. To discuss it, contact us.
