Republic of Mauritius

Mauritius operates a progressive income tax system for individuals, with graduated rates applied to annual chargeable income. Tax is collected through the Pay As You Earn (PAYE) system for employees, where employers deduct tax at source, and through self-assessment for self-employed individuals. Tax residency is determined based on physical presence in Mauritius. An individual is considered tax resident if they are present in Mauritius for at least 183 days in a fiscal year or for an aggregate of 270 days or more during the current and preceding two income years. Tax residents are taxed on their global income, while non-residents are taxed only on Mauritius-sourced income. The system allows for various deductions, exemptions and reliefs, including those for dependents, interest on housing loans, medical insurance, retirement contributions and education expenses. While both residents and non-residents are generally subject to the same income tax rates, certain personal reliefs and deductions differs depending on residency status.

Payroll taxes include compulsory deductions from employers and employees under the PAYE system, together with statutory social security contributions and labour-related levies such as the Contribution Sociale Généralisée (CSG), National Savings Fund (NSF), Portable Retirement Gratuity Fund (PRGF) and the Human Resource Development Council (HRDC) training levy. The CSG replaced the National Pension Fund in 2020 and funds pensions and social benefits. CSG contributions are calculated on the employee’s monthly basic wage or salary and vary depending on the level of earnings. For employees earning up to Rs 50,000 per month, contributions are set at 1.5% for the employee and 3% for the employer. For employees earning above Rs 50,000 per month, the contribution rates increase to 3% for the employee and 6% for the employer. Additionally, employers must contribute 2.5% of the employee’s monthly basic wage to the NSF for employee savings, while employees contribute 1% of their monthly basic salary. NSF contributions are subject to statutory minimum and maximum earnings ceilings, which are reviewed and updated periodically by the authorities.

Employers are also required to contribute 4.5% of an eligible employee’s monthly remuneration to the PRGF, which funds gratuity payments upon retirement, termination or death and applies to employees covered under the Workers’ Rights Act, 2019. To support workforce development, employers must also pay a 1.5% HRDC training levy calculated on the total basic wage bill each month alongside other statutory contributions to the MRA. In addition to monthly payroll deductions, employers must comply with two year-end statutory payments. The End-of-Year Gratuity is a mandatory bonus equal to one-twelfth of an employee’s annual earnings, payable to employees who have completed at least 12 months of continuous service by 31 December.

Employers must submit monthly PAYE, social contributions (including CSG and NSF) and the HRDC training levy by the end of the following month, via the MRA’s online platform. The annual PAYE reporting process consists of the Employee Declaration Form (EDF), which must be submitted annually by the employee to their employer before or at the start of the income year, in accordance with deadlines communicated by the MRA. The EDF allows employees to select their Income Exemption Threshold (IET) category and declare any dependents or allowable deductions for the upcoming income year starting 1 July. Additionally, employers must issue a Statement of Emoluments (SOE), also known as the Annual Return of Employees’ Emoluments, to each employee and submit it to the MRA by 15 August following the tax year. Employers must report and remit PRGF contributions monthly and submit an annual PRGF return by the end of the month following the period to which they relate. The statutory End-of-Year Gratuity (13th cheque) does not require MRA reporting, but employers must retain proper records in compliance with labour laws.

Employers and payroll providers are required to maintain accurate and complete payroll records, including employee details, salary information, PAYE deductions, social contributions and tax filings. The records must be kept for a minimum of seven years and be readily available for inspection by the MRA. Compliance with payroll tax obligations is strictly enforced, and failure to submit returns or make payments on time can result in penalties and interest charges. Non-compliance, such as failure to file returns, late payments or providing false information, can result in penalties ranging from Rs 5,000 to Rs 10,000 per month, with cumulative penalties increasing based on the severity and duration of the breach. The MRA has the authority to audit employers and enforce compliance through inspections and legal action if necessary.