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Salary charges
Articles, practical guides and legal updates written by our experts.
Cash and Management Allowance
The cash and management allowance compensates for the financial risk borne by employees responsible for funds, securities, or materials. Established by Decree No. 99-0892/MF-SG, it is set at 10% of base pay. This rate is fully exempt, as the exemption cap is also 10%.
Company-Specific Allowances and Bonuses
Employers are free to establish their own allowances and bonuses, but these must be considered part of the salary. Three cumulative criteria define it: universality (who), fixedness (how much), and permanence (when). Together, they require predictability: a benefit for which the “who, how much, and when” are known is considered part of wages; otherwise, it is a gratuity.
Equipment Allowance
The uniform allowance compensates for the purchase and replacement of a uniform required for the job. It applies only if the uniform is worn frequently and is not provided by the employer. It covers the initial uniform upon starting the job (initial uniform) and subsequent replacements. It applies to positions where a uniform is required—such as bank tellers, presenters, drivers, and security guards—and is never based on personal preference.
Financial Penalties
Late payment penalties grow with **time**, not with the amount. Once a tax or social charge is overdue, the risk exists and is revealed only during an audit (3 years for taxes, 4 years for social security). The 2% monthly penalty keeps accumulating until payment, nearly doubling the debt in four years. Delaying a payment is essentially borrowing at a very high cost; paying immediately stops the accrual.
Optimizing Payroll Costs
Optimizing payroll costs means paying fairly and structuring payroll to reflect reality. The key factors: compliance, proper job classification, actual expenses, preventive measures to reduce the workers’ compensation and occupational disease rate, tailored contracts, and time management. False optimizations create risk, not savings. Contact us…
Optional Bonuses and Allowances
A bonus is optional if no law requires it, but it becomes mandatory if it is paid consistently, regularly, and universally (“The benefit becomes binding solely by virtue of its repetition”). And it remains subject to social security contributions (“The criteria that make a bonus mandatory are the very same ones that make it subject to social security contributions”).
Payroll Expenses: Items Reported
All components of compensation are subject to payroll taxes, except for expense reimbursements and non-wage payments. This classification is based on three criteria—fixedness, regularity, and general applicability—as well as the absence of a charitable intent and the perception that the payment is a supplement to wages. Salary is always subject to payroll taxes, actual expense reimbursements rarely are, and the 1982 special allowance is exempt.
Personal Vehicle Allowance
The personal vehicle allowance compensates for the use of a personal vehicle for official purposes: wear and tear and associated risks. Based on Decree No. 99-0892/SG-MF, it is a lump-sum allowance ranging from 20,000 to 100,000 CFA francs, depending on the category. It requires that the vehicle be actually used for work; without such use, the allowance loses its purpose.
Relocation Allowance
The relocation allowance reimburses expenses related to a change of residence required by the employer. It covers the employee’s relocation, the transport of their personal belongings, and their return at the end of the assignment. It is not a form of compensation: it reimburses an expense that the employee would not have incurred had it not been for the company’s decision.
Representation/Liability Allowance
The representation allowance compensates for the special demands of senior-level positions. The rules governing it depend on the title of the position: a position allowance is taxable, while a representation allowance is deductible up to a limit of 60,000 or 80,000 CFA francs, depending on the size of the company. The title must reflect an actual burden. Tax law is becoming stricter: the deduction is now generally allowed only for CEOs and Deputy CEOs.
Salary
Salary depends on qualifications, experience, the employer’s financial resources, and the law; it includes bonuses (to motivate), allowances (to compensate), and premium pay (to align with market rates); mandatory deductions apply; those related to garnishment are capped at a rate ranging from one-quarter to three-quarters; finally, a down payment is based on days worked, while an advance is based on future days, both limited to half the monthly salary.
Severance Pay and End-of-Service Benefits
Severance pay and end-of-service payments (legally referred to as “compensation for services rendered”) are tax-exempt, but only up to the limits set forth in the Labor Code: “the exemption ends where the statutory scale ends.” In the case of a negotiated departure, only the statutory portion is exempt; any amount exceeding that becomes taxable again. The cap is calculated according to the Labor Code, never according to tax law.
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