AUGUST 2026 – MAURITIUS
2026/2027 PAYROLL CHANGES ENACTED
It is important that employers note the following:
Finance Act 2026 and Economic and Financial Measures (Miscellaneous Provisions) Act 2026
Following the Budget Speech delivered on 19 June 2026, and as outlined in our previous News Flash of 2 July 2026, the Finance Act 2026 and the Economic and Financial Measures (Miscellaneous Provisions) Act 2026 were assented to on 12 August 2026 and gazetted on 13 August 2026. The Acts implement several payroll-related measures announced in the 2026/2027 Budget.
Effective 19 June 2026
- The tax-free limit for qualifying pension, retirement and severance lump sums increased from MUR 3 million to MUR 3.5 million.
- Only the qualifying amount above MUR 3.5 million may be taxable.
Legislative reference: Finance Act 2026, sections 7(w)(i)(B) and 28(13).
Effective 1 July 2026
- A new 35% personal income tax rate applies to the portion of annual chargeable income above MUR 12 million.
- The existing 0%, 10% and 20% tax bands remain unchanged.
- The Individual Fair Share Contribution has been removed from payroll calculations.
- Qualifying non-citizen employees working on the installation, commissioning or operation of a solar photovoltaic manufacturing plant may receive a four-income-year employment income tax exemption.
These changes apply from 1 July 2026 even though the Finance Act was enacted later. Employers may therefore need to recalculate affected payroll periods.
Legislative reference: Finance Act 2026, principally sections 7 and 28.
Effective 13 August 2026
- Female workers are entitled to one day of menstrual leave on full pay per month when they are temporarily unable to work because of severe menstruation-related symptoms or disorders.
- The leave must be recorded separately and must not be treated as unpaid leave.
- The legislation does not expressly require a medical certificate.
Legislative reference: Economic and Financial Measures (Miscellaneous Provisions) Act 2026, section 59(c), inserting section 46A into the Workers’ Rights Act 2019.
Effective 1 January 2027
- Maternity leave increases from 16 weeks to 26 weeks on full pay, followed by an optional period of up to 26 weeks on half pay.
- Paternity leave increases from four to six consecutive weeks on full pay.
- The Basic Retirement Pension (BRP) will be replaced by the State Age Pension (SAP). The final legislation does not include the proposed means test.
- The State Age Pension is mainly a government-administered social security benefit and does not introduce a new employer payroll contribution.
Legislative references:
- Maternity and paternity leave: Economic and Financial Measures (Miscellaneous Provisions) Act 2026, sections 59(d), 59(e) and 61(2).
- State Age Pension: Finance Act 2026, section 12.
Employer action
Update the tax configuration retrospectively from the relevant effective dates, implement paid menstrual leave immediately, and prepare the leave system for the maternity and paternity changes from 1 January 2027.
To view the Finance Act, 2026, follow the link.
To view the Economic and Financial Measures (Miscellaneous Provisions) Act 2026, follow the link.
