On 19 October 2024, the Moroccan Ministry of Finance published the draft Finance Law for 2025.

Here are some of the key proposed changes affecting payroll:

• Exemptions for supplementary pensions: Pensions will be exempt from income tax if the contract duration is at least 8 years, and contributions have not been previously deducted from taxable net income. However, in the event of the death or disability of the insured, the 8-year requirement is waived.
• Exemption for internship allowance: Interns in the private sector will be eligible for an exemption on internship allowances for a period of 12 months. For trainees employed for an indefinite period, the gross monthly salary is capped at MAD 10,000 which also benefits from the exemption for the period of 12 months, provided the conditions of subsection 16 of article 57 are met.
• Revision of the annual individual income tax brackets/rates: The annual income tax brackets will be adjusted with the exemption threshold increasing from MAD 30,000 to MAD 40,000. Higher bracket thresholds will also see adjustments, and the top tax rate is reduced from 38% to 37%:
  
  • Up to MAD 40,000 - 0%
  • MAD 40,001 to 60,000 - 10%
  • MAD 60,001 to 80,000 - 20%
  • MAD 80,001 to 100,000 - 30%
  • MAD 100,001 to 180,000 - 34%
  • over MAD 180,000 - 37%
    
• Increased Family Allowance Deduction: The annual family allowance deduction will increase from MAD 360 to MAD 500 per dependent, up to a maximum of MAD 3,000.
  

The effective date of the above-proposed changes will apply from January 2025, once approved.  More details will follow soon.