Not every allowance paid to employees on top of their salary is taxable. When it reimburses expenses incurred for work, it may be exempt from income tax and social security contributions. But the exemption is subject to precise conditions, and it is systematically examined in audits.
The principle: reimbursing expenses, not topping up salary
The General Tax Code (article 57) exempts from income tax allowances intended to cover expenses incurred in performing the duties or job, to the extent they are justified.
Two consequences:
- an allowance paid at a flat rate to everyone, unrelated to actual expenses, is a salary supplement, and therefore taxable;
- an allowance cannot be exempt if the corresponding expenses are already deducted elsewhere or paid directly by the employer.
The CNSS rules clarified in 2025
An order of the Ministry of Economy and Finance (No. 1314-25), published in 2025, sets the list, conditions and ceilings of allowances exempt from social security contributions. The main rules:
Home-to-work transport allowance
| Condition | Exempt monthly ceiling |
|---|---|
| Home at least 2 km from the workplace, no transport provided by the employer, urban area | MAD 500 |
| Same conditions, outside the urban perimeter | MAD 750 |
It cannot be combined with collective transport organised by the employer, unless the pick-up points are far from the employee’s home.
Business travel allowances
- Travel more than 50 km from the usual place of work.
- With supporting documents (tickets, hotel or restaurant invoices, travel orders): exempt up to 100% of base salary and MAD 5,000 per month, covering transport, meals and accommodation, with the possibility of going beyond on documented expenses.
- Without supporting documents: exemption calculated using flat-rate scales (mileage, meals, nights).
- Assignments abroad: higher ceilings.
End-of-contract payments
Severance, voluntary departure and retirement payments have their own ceilings. We cover them in our article on severance pay.
Other common allowances
Other allowances may be exempt if they meet the expense-reimbursement principle and stay within accepted limits: a meal allowance for staff working staggered hours, an entertainment allowance for some managers, a cash-handling allowance for posts handling funds, tool or dirty-work allowances. Family allowances are also exempt.
Caution: income tax and CNSS do not always follow exactly the same rules. An allowance may be exempt from contributions and remain partly taxable, or the reverse. Each payslip item must be set up separately for tax and for contributions.
Good practice
- Formalise an expense policy: who, when, on which documents and for what amounts.
- Keep the evidence: travel orders, invoices, proof of address.
- Set up payroll item by item, distinguishing income tax and CNSS.
- Add back to taxable salary any part that exceeds the ceilings.
Ascensu sets up and checks its clients’ payslips as part of payroll and CNSS management.
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.