Remuneration
From gross to net: calculating net salary in Mali, line by line
On 31 October, Moussa opens his payslip at the Sahel Logistique office. At the top, 154,500 XOF. At the bottom, 133,267 XOF. He asks where the 21,233 XOF went, and the accountant takes ten minutes to explain. If the explanation is muddled, or if one line is wrong, the employee’s trust goes with it.
Sahel Logistique (transport and warehousing, 42 employees) and its employees Moussa and Awa are fictitious. They are used for illustration only.
1. The legal framework: which texts authorise deductions?
Between gross and net pay, the employer may only take what the law allows. Salary deductions are governed mainly by the following texts:
- Law No. 92-020 of 23 September 1992 on the Labour Code, as amended. Articles L.121 to L.125 set out the closed list of permitted deductions and prohibit fines (Labour Code, article L.121). Articles L.104 and L.105 require a payslip detailing gross remuneration, each deduction and net remuneration.
- The Social Security Code (Law No. 99-041 of 12 August 1999, as amended). Articles 187 to 189 set the contribution base, article 197 sets the employee share of the pension at 40% of the scheme’s rate, and article 201 makes deduction of that share at each payroll compulsory.
- Decree No. 10-578/P-RM of 26 October 2010 setting the contribution rates for compulsory health insurance (AMO): 3.06% for the employee, 3.50% for private-sector employers. Decree No. 10-601/P-RM of 18 November 2010 sets its base and collection.
- The General Tax Code, articles 1 to 13, for the calculation of ITS, and the Tax Procedures Code, articles 410 to 421, for its withholding at source by the employer.
- Order No. 99-0892/MF-SG and Order No. 99-0894/MFC-SG of 18 May 1999, which specify the bonuses exempt from ITS and the taxation of benefits in kind.
Garnishments and salary assignments are also subject to the limits of the attachable and assignable portion set by Decree No. 96-178/P-RM (article D.123-2). For details, read Assignable and attachable portion: how much can you deduct from a salary?
The most common mistake
Believing the employer can deduct whatever it likes, as long as it is written on the payslip. The Code’s list is closed: a deduction that is not on it is prohibited, even if the employee agreed to it.
Between gross and net, only the law may take a share.
2. The path from gross to net in four steps
Gross salary is total remuneration before deductions: base salary, bonuses, allowances, overtime, benefits in kind. Net salary is what the employee receives. In between, there are four steps, always in the same order.
- Start from gross pay and isolate the contribution base.
- Deduct the employee contributions: INPS pension and AMO.
- Calculate and deduct ITS.
- Deduct, where applicable, the other authorised deductions: advances, garnishments, assignments.
Why this order? Because each step depends on the previous one: ITS is calculated after deducting the pension contribution. To place gross and net among the other amounts on the payslip, read SMIG, base salary, gross, net, payroll: eight amounts you should no longer confuse.
3. Step 1: start from gross, isolate the contribution base
The payslip must show gross remuneration with all its components (Labour Code, article L.105). But not all gross pay is subject to contributions: expense reimbursements are excluded (Social Security Code, article 187). The components of gross pay are explained in the composition of the gross salary.
Example. The October payslip of Moussa, storekeeper, single with no children.
Base salary: 120,000 XOF
Seniority bonus: 4,500 XOF
Performance bonus: 20,000 XOF
Travel allowance (actual mission expenses, against receipts): 10,000 XOF
Gross salary: 154,500 XOF
Contribution base: 154,500 − 10,000 = 144,500 XOF
What you need to do
- Check that each expense reimbursement is backed by receipts; otherwise it enters the base.
- Make sure the contribution base is never below the SMIG (Social Security Code, article 189).
4. Step 2: employee contributions
Two contributions are borne by the employee and deducted by the employer at each payroll:
| Contribution | Employee rate | Source |
|---|---|---|
| INPS (old-age) pension | 3.6% | INPS; Social Security Code, article 197 |
| Compulsory health insurance (AMO) | 3.06% | Decree No. 10-578/P-RM, article 3 |
| Total | 6.66% |
The employee share is deducted at each payroll, and the employee cannot object (Social Security Code, article 201). The other INPS branches (family benefits, work accidents, invalidity) are borne by the employer alone.
Example. Moussa’s contributions.
INPS pension: 144,500 × 3.6% = 5,202 XOF
AMO: 144,500 × 3.06% = 4,422 XOF
Total employee contributions: 9,624 XOF
The most common mistake
Keeping the contributions withheld to fund cash flow. They belong to the employee and the fund. For AMO, failing to pay over contributions already deducted is treated as an improper withholding (Decree No. 10-601/P-RM, article 28).
What you need to do
- Apply 3.6% and 3.06% to the same base, the contribution base.
- Pay over the deducted shares every month, even when cash is tight.
5. Step 3: ITS
The tax on wages and salaries (ITS) is withheld at source by the employer. Its base starts from taxable salary, from which only the pension contribution is deducted, up to 4% of gross pay (General Tax Code, article 7). The AMO contribution is not a pension contribution and is not covered by this article.
Example. Moussa’s ITS.
Net taxable income: 144,500 − 5,202 = 139,298 XOF, rounded to 139,000 XOF
Annual income: 139,000 × 12 = 1,668,000 XOF
Gross tax on the scale: 12,420 + 71,760 + 88,488 = 172,668 XOF
Less two points: 1,668,000 × 2% = 33,360 XOF
Annual ITS: 172,668 − 33,360 = 139,308 XOF
Monthly ITS: 139,308 ÷ 12 = 11,609 XOF
The scale, the family reduction and the two points are explained in Calculating ITS in Mali.
What you need to do
- Update each employee’s family situation every year as at 1 January.
- Check that the software deducts the pension contribution, and only that, before applying the scale.
6. Step 4: other deductions, and the net amount payable
Beyond contributions and ITS, which apply by law (Labour Code, article L.122), the only permitted deductions are those arising from a garnishment or a voluntary assignment, within regulatory limits (article L.123). Repayment of an advance goes through one of these two routes (article L.124). The employer may not impose fines (article L.121).
An advance paid for work in progress is not a deduction: it is a partial payment of salary, taken off the net amount payable (article L.125).
Example. Moussa’s net pay; he received an advance of 30,000 XOF on 15 October.
Gross salary: 154,500 XOF
Less employee contributions: 154,500 − 9,624 = 144,876 XOF
Less ITS: 144,876 − 11,609 = 133,267 XOF (net salary)
Less the advance already paid: 133,267 − 30,000 = 103,267 XOF (net payable on 31 October)
The most common mistake
Deducting from salary the price of a broken tool or a “lateness penalty”. This is a disguised fine, and it is prohibited. Setting off a debt owed by the employee is only possible within the attachable portion (article L.123).
Contributions and ITS: by law. Garnishment and assignment: within limits. Fines: never.
What you need to do
- Have a written voluntary assignment signed before any deduction to repay an advance.
- Show separately on the payslip the net salary and the net payable after advances.
7. The “guaranteed net”: working back from net to gross
Awa, a future team leader, asks for 150,000 XOF “net”. Sahel Logistique must set a gross salary that produces this net. The usual reflex is to add a fixed percentage. It does not work, because ITS is progressive: the higher the gross, the larger the tax share.
Example. Awa, single, with no exempt bonus or expense reimbursement.
Fixed-percentage method: 150,000 ÷ (1 − 6.66%) = 160,703 XOF gross
Net actually obtained with this gross: 135,603 XOF, i.e. 14,397 XOF less than promised
Gross that actually gives 150,000 XOF net: 181,300 XOF
INPS pension: 6,527 XOF; AMO: 5,548 XOF; ITS: 19,197 XOF
Net: 181,300 − 6,527 − 5,548 − 19,197 = 150,028 XOF
The only reliable method is to test successive gross amounts in the payroll software until the target net is reached. Then write the resulting gross into the contract, not the net.
Why never to write “net” in the contract
A guaranteed net obliges the employer to absorb every increase in contributions or tax, and every change in family situation. If the employer bears the ITS, the tax paid becomes a taxable benefit in kind (Order No. 99-0894/MFC-SG, article 4): the base rises, and so does the tax.
What you need to do
- Agree salaries in gross terms, and give the net figure for information only.
- For a net amount requested by a candidate, simulate the gross in the software before making the offer.
8. What a mistake costs
A mistake in calculating net pay affects the employee, the INPS and the tax authority at the same time.
| Mistake | Consequence | Text |
|---|---|---|
| Net understated (too much deducted) | Back pay owed to the employee, claimable for three years | LC, L.118 |
| Prohibited deduction or fine imposed | Repayment to the employee and a criminal offence | LC, L.121 |
| ITS not withheld | Fine equal to the tax not withheld, paid by the employer | LPF, art. 419 |
| AMO contributions deducted and not paid over | Improper withholding, 2% surcharge per month | Decree No. 10-601, art. 26 and 28 |
The payslip is proof of payment. The employer hands it over at the time of payment and copies its entries into the payments register (Labour Code, article L.104). On organising payroll, read Payroll in Mali: pay on time, in the right place, and keep the proof.
What you need to do
- Reconcile every month the total deductions on payslips with the amounts declared to the INPS and the tax office.
- Explain each line of the payslip to the employee on the first payslip and at each significant change.
Key takeaways in 6 points
- Deduct from salary only what the law allows: contributions, ITS, garnishments and assignments within legal limits, never fines.
- Calculate contributions on the contribution base, excluding justified expense reimbursements: 3.6% for the pension, 3.06% for AMO.
- Calculate ITS after deducting the pension contribution only.
- Take advances off the net payable, not as a deduction.
- Set salaries in gross terms; for a requested net, simulate the gross in the software instead of adding a percentage.
- Hand over a detailed payslip at each payroll and pay over the sums withheld every month.