Income tax (IR) on salaries is calculated and withheld every month by the employer, then paid to the Treasury. For employees and employers alike, understanding the scale makes it possible to check a payslip and anticipate the cost of a pay rise.
The applicable scale
The scale was revised by the 2025 Finance Act and applies in 2026. It is progressive: each income bracket is taxed at its own rate.
| Annual net taxable income (MAD) | Rate | Amount to deduct (MAD) |
|---|---|---|
| Up to 40,000 | 0% | 0 |
| 40,001 to 60,000 | 10% | 4,000 |
| 60,001 to 80,000 | 20% | 10,000 |
| 80,001 to 100,000 | 30% | 18,000 |
| 100,001 to 180,000 | 34% | 22,000 |
| Above 180,000 | 37% | 27,400 |
The “amount to deduct” column lets you calculate the tax in a single step, without splitting income bracket by bracket:
Gross tax = net taxable income × bracket rate − amount to deduct
It does not change the amount of tax: it is a calculation shortcut that gives exactly the same result as applying each rate in turn.
From gross salary to net taxable income
The scale does not apply to gross salary but to net taxable income. To get there, start from gross taxable salary (salary, bonuses and taxable benefits) and deduct in particular:
- professional expenses, deducted as a capped flat-rate percentage that depends on salary level;
- employee social security contributions: CNSS and compulsory health insurance (AMO);
- where applicable, contributions to a supplementary pension scheme and certain mortgage interest on a main residence, within legal limits.
Once gross tax is calculated, the family allowance is subtracted, granted for each dependant (spouse, children) up to a cap.
A worked example
Take an employee whose annual net taxable income is MAD 120,000, after professional expenses and social security contributions.
This income falls in the MAD 100,001–180,000 bracket:
- Gross tax = 120,000 × 34% − 22,000 = 40,800 − 22,000 = MAD 18,800 a year;
- roughly MAD 1,567 a month before the family allowance.
Bracket by bracket, the result is the same: MAD 2,000 in the 10% bracket, MAD 4,000 in the 20% bracket, MAD 6,000 in the 30% bracket and MAD 6,800 on the MAD 20,000 taxed at 34%, totalling MAD 18,800.
Marginal rate and average rate are not the same. This employee is in the 34% bracket, but the tax represents only about 15.7% of net taxable income. Only the part of income above MAD 100,000 is taxed at 34%.
What the 2026 Finance Act changes
The scale is unchanged in 2026. However, Finance Act No. 50-25 introduces several targeted measures, including:
- a flat 20% rate on gross salaries paid by companies with Casablanca Finance City status, for up to ten years, for employees taking up their posts from 2026, with an option for the progressive scale;
- a 5% withholding tax on certain business rents paid to individuals, from 1 July 2026, creditable against the tax due;
- new reporting and payment requirements for securities disposals made outside a financial intermediary.
Points for employers to watch
- Apply the scale month by month and adjust at year-end or when an employee leaves.
- Pay over withholdings on time: late payment exposes the company to penalties, even if the tax was deducted from the salary.
- Report the remuneration paid in the annual salaries return.
- Include benefits in kind (car, housing), which form part of taxable income.
In short
- Net taxable income is exempt up to MAD 40,000 a year, then taxed at 10% to 37%.
- The formula income × rate − amount to deduct gives the annual tax directly.
- The family allowance then reduces the tax.
- The average rate is always lower than the rate of the highest bracket reached.
Ascensu manages payroll and CNSS filings for its clients: income tax calculation, payslips, returns and payments on time.
Official sources
This article is provided for general information, as at its publication date. It is not personalised advice: the rules change and every situation must be reviewed on its own facts.