News Flash 27 December 2024 – MAURITIUS – Special Allowance (14th Month Bonus)

CRS News flash

DECEMBER 2024 – MAURITIUS
SPECIAL ALLOWANCE (14TH MONTH BONUS)
It is important that employers note the following:

The Special Allowance Act, 2024 implemented with immediate effect
In Mauritius, the tradition of providing an end-of-year bonus equal to one-twelfth of an employee’s annual salary has become a well-established practice over the years, benefiting both government and private sector workers.

Building on this, the newly appointed Deputy Prime Minister fulfilled the commitment to introduce a 14th monthly salary, as announced during the “Meeting of Thanks” for the Alliance du Changement on 17 November 2024. The Special Allowance Bill (No. XX of 2024) was published on 13 December 2024, and it received official approval later that day during a Cabinet meeting.

The Special Allowance Act, 2024, was subsequently gazetted and published on 21 December 2024.

The key provisions of the Act are as follows:

  • Payment of a 14th month bonus to employees in the public and private sectors deriving a monthly basic salary of up to Rs50,000 to be paid in two instalments as follows:
    • A first instalment of 50% in December 2024; and
    • A second instalment of 50% in January 2025.
  • Employers and employees may agree to spread the payment over four equal instalments, provided the first instalment is made in December.
  • The special allowance, equal to one month’s basic salary, is designated for employees who have worked continuously with an employer throughout 2024 and remain employed on 31 December 2024, including:
    • A part-time employee; typical employee; an employee working from home; a share employee; and
    • A person, other than a consultant, who is classified by an employer as a service provider or by any other such appellation, whether or not he holds a business registration number, but who performs personally the same or similar work of a comparable employee employed in the same enterprise or industry.
  • Specific provisions apply to those who worked only part of the year. Employees who left their job before year-end due to contract termination, resignation after completing at least eight months of service, retirement, or death will receive a pro-rata payment based on the number of months worked.

However, certain categories are excluded from this benefit, including:

  • Independent contractors (job contractors).
  • Consultants.
  • Self-employed individuals.
  • Participants in government or public-private training programs.
  • Employees earning a monthly basic salary exceeding Rs 50,000.

The formula for calculating pro-rata bonuses in Mauritius for the 13th or 14th month bonus is based on the number of months effectively worked during the year 2024.

The calculation is as follows:

  • Pro-rata bonus = (Number of months worked / 12) × Monthly basic salary.

Financial support to companies
The government has pledged to offer financial assistance to small and medium enterprises (SMEs), export-oriented businesses, and companies experiencing financial challenges to help cover this additional expense. In contrast, larger corporations are expected to bear these costs on their own.

Eligibility criteria:

  • SMEs with an annual turnover of no more than Rs 100 million for the 2023-2024 fiscal year.
  • Export companies, as defined under the Export Enterprises (Remuneration) Regulations 2019.

Assistance structure:
The scheme offers two levels of support:
1. Full coverage: Available to companies that either recorded accounting losses in 2023-2024 or whose accounting profits would be reduced by more than 50% after deducting costs related to salary increases and the special allowance.
2. Partial coverage (50%): Provided to companies whose accounting profits would decrease by more than 10% after the same deductions.

Cap on assistance:
The financial aid is limited to a maximum of Rs 50,000 per eligible employee.

To view the financial support communique, follow the link.

To view the Special Allowance Act, 2024, follow the link.

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