Income tax Morocco 2026: income tax is calculated under the progressive scale of Article 73 of the General Tax Code. The first 40,000 dirhams of net taxable income are exempt, and the rates then rise from 10% to 37% on the portion above 180,000 dirhams. For an employee, the tax is withheld at source every month by the employer, after deduction of social contributions and professional expenses, and then reduced by family allowances. This article sets out the 2026 brackets, the steps of the payroll calculation, the categories of income concerned, the employer’s obligations and the specific cases of expatriates and free zone employees in Tangier.
In brief. Annual income tax scale for 2026 (Art. 73-I of the Tax Code): 0% up to MAD 40,000 · 10% from 40,001 to 60,000 · 20% from 60,001 to 80,000 · 30% from 80,001 to 100,000 · 34% from 100,001 to 180,000 · 37% above. Professional expenses: 35% (gross taxable income ≤ MAD 78,000) or 25% above, capped at MAD 35,000 (Art. 59). Family allowance: MAD 600 per dependant, maximum MAD 3,600 (Art. 74). The employer withholds the tax on each payment (Art. 156), remits it during the following month (Art. 174) and files the annual salary return before 1 March (Art. 79).
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What are the income tax brackets in Morocco for 2026?
The income tax scale is set by Article 73-I of the General Tax Code, as amended by Finance Law No. 60-24 for the 2025 budget year and reproduced in the 2026 edition of the Code published by the Directorate General of Taxes (DGI). It applies to annual net taxable income, all categories combined, after the deductions specific to each category.
| Annual net taxable income bracket | Rate |
|---|---|
| Up to MAD 40,000 | Exempt |
| 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% |
| Portion above MAD 180,000 | 37% |
The scale is progressive by bracket: each rate applies only to the portion of income falling within its bracket, never to the whole. A net taxable income of MAD 90,000 is not taxed at 30%: it bears 0% on the first 40,000, 10% on the next 20,000, 20% on the next 20,000 and 30% on the last 10,000. For monthly payroll, the employer applies the same scale on a monthly basis, i.e. the same brackets divided by twelve.
Alongside the scale, Article 73-II sets specific rates, often final: 10% on dividends, 10% or 15% on property income depending on whether gross income is below MAD 120,000 or not, 30% on fixed-income investment products received by individuals, 20% on the salaries of employees of companies with Casablanca Finance City status for a maximum of ten years, and 30% on occasional remuneration paid to persons outside the permanent workforce. Self-employed persons under the auto-entrepreneur regime pay tax on turnover received (0.5% or 1% depending on the activity).
Which types of income are subject to income tax?
Article 22 of the Tax Code lists six categories: professional income, income from agricultural operations, salary and similar income, property income and gains, income and gains from movable capital, and other income and gains. Total taxable income is the sum of the net income of each category, excluding income already taxed at a final rate (Art. 25).
| Category (Art. 22 of the Tax Code) | Taxation in 2026 | Who files / withholds |
|---|---|---|
| Salary and similar income (Art. 56) | Progressive scale after the deductions of Art. 59 | Withholding by the employer (Art. 156) |
| Professional income | Progressive scale (actual or simplified net income); single professional contribution or auto-entrepreneur regime depending on the option | Annual return by the taxpayer (Art. 82) |
| Property income | 10% or 15% depending on whether gross income is below MAD 120,000 (Art. 73-II) | Return by the taxpayer or withholding depending on the payer |
| Dividends and shares in profits | 11.25% final withholding (Art. 73-II-B-7°) | Withheld by the distributing company (Art. 158) |
| Fixed-income investment products | 30% for individuals, 20% creditable for others (Art. 73-II-F and G) | Withheld by the paying institution (Art. 159) |
For a company based in Tangier, the day-to-day issue is the salary category: it drives payroll, monthly withholding and the annual return. The other categories mainly concern directors and individual shareholders, notably for dividends received from their company.
How is payroll withholding calculated on a salary?
The calculation follows an order set by Articles 56 to 59 and 73 to 75 of the Tax Code. Following it in that order avoids most payroll errors.
Step 1 — Gross taxable salary. It comprises wages, salaries, allowances, emoluments and benefits in cash or in kind (Art. 56), valued at their real value. The items exempted by Article 57 are removed: justified expense allowances, family allowances, the employer’s share of pension and social security contributions, meal vouchers up to MAD 40 per employee per working day (without exceeding 20% of gross taxable salary), severance and voluntary departure indemnities up to one million dirhams, internship allowances capped at MAD 6,000 per month for twelve months (interns registered with ANAPEC), or, for companies created between 1 January 2015 and 31 December 2026, the gross monthly salary capped at MAD 10,000 paid for twenty-four months to an employee hired on a permanent contract within the first two years of operation, up to ten employees (Art. 57-20°).
Step 2 — Deductible social contributions. Article 59 allows the deduction of withholdings for pension and retirement schemes, including those of the social security regime governed by Dahir No. 1-72-184 (CNSS, the National Social Security Fund), contributions to Moroccan social welfare bodies and employee social security contributions for short-term benefits, as well as the employee’s share of group insurance premiums covering illness, maternity, disability and death. The rates and ceilings of these contributions fall under CNSS and AMO regulations and are covered in a dedicated article on this blog.
Step 3 — Professional expenses. Article 59-I-A sets a flat-rate deduction of 35% for employees whose gross annual taxable income does not exceed MAD 78,000, and 25% above that, without the deduction exceeding MAD 35,000 per year. The percentage is calculated on gross taxable income excluding benefits in cash or in kind. Special rates (25%, 35%, 40%, 45%) apply to a few professions listed in the text (flight crew, journalists, sales representatives, etc.).
Step 4 — Net taxable income. Gross taxable salary less exemptions, less deductible contributions, less professional expenses: this is net taxable income (Art. 58-I). Where applicable, repayments of loans taken out to acquire social housing used as the main residence are also deducted (Art. 59-V), provided the instalments are withheld and paid monthly by the employer.
Step 5 — The scale. The brackets of Article 73-I are applied to annual net taxable income, or their monthly equivalent to the month’s payroll.
Step 6 — Family allowances. Article 74 deducts from the annual amount of tax MAD 600 per dependant, up to MAD 3,600. Dependants are the spouse and children (own or legally taken in) who do not have annual total income above the exempt bracket and are no older than 27, with no age condition for children with a disability. A female taxpayer benefits from the same allowances for her husband and children legally dependent on her. A change in family situation is taken into account from the first month following the change. For an employee, these allowances are set off directly against the withholding (Art. 75).
Worked example on the scale alone. A married employee with one dependent child whose annual net taxable income, after contributions and professional expenses, comes to MAD 120,000: 0% on 40,000 = 0; 10% on 20,000 = 2,000; 20% on 20,000 = 4,000; 30% on 20,000 = 6,000; 34% on 20,000 = 6,800. Gross tax: MAD 18,800. Allowances for two dependants: MAD 1,200. Net annual tax: MAD 17,600, i.e. a monthly withholding of around MAD 1,467. The step from gross salary to net taxable income, however, depends on the contributions actually borne, which only the payslip can determine.
What are the employer’s income tax obligations?
An employer domiciled or established in Morocco is the collector of tax on salaries. Its obligations fall into four stages.
Withhold on each payment. Withholding on salary income is carried out by the employer, on behalf of the Treasury, on each payment made (Art. 156-I). It also applies to occasional remuneration paid to persons who are not part of the workforce, at the rate of 30% on the gross amount without deduction (Art. 58-II-C and 73-II-G-1°).
Remit during the following month. Withholdings relating to payments made in a given month must be paid during the following month to the tax collector of the place of domicile or establishment of the person that made them, together with a payment slip (Art. 174-I). In the event of transfer or cessation of business, payment is due within the month following the event.
File before 1 March. Article 79 requires private employers to submit, before 1 March each year, the return of salaries and wages for the previous year, indicating for each beneficiary their identity, national identity card number or residence permit number for foreigners, CNSS number, gross amount of salaries and allowances, pension and social security withholdings, rate of professional expenses, number of family allowances, net taxable income, tax withheld and the period concerned. The return is supplemented by a statement of occasional remuneration and, where applicable, by the list of exempt interns (Art. 57-16°) and of employees benefiting from the exemption of Article 57-20°, with a copy of their permanent employment contract. The return is filed electronically.
Keep and retain the payroll ledger. The employer keeps a special ledger or any equivalent document enabling the returns to be checked, and retains these documents until the end of the fourth year following the year for which the withholding was due (Art. 80).
These obligations come on top of monthly CNSS returns and the Labour Code rules on the minimum wage: the minimum wage in Morocco in 2026 is set at MAD 17.92 per hour, i.e. MAD 3,422.72 for 191 hours. Our guide to payroll management in Morocco’s free zones explains how the minimum wage, CNSS and income tax fit together on the payslip.
Expatriates and non-residents: who pays income tax in Morocco?
The rule is territorial and based on tax domicile (Art. 23 of the Tax Code). An individual has their tax domicile in Morocco when they have their permanent home there, the centre of their economic interests, or when the continuous or discontinuous duration of their stays in Morocco exceeds 183 days in any 365-day period. Persons domiciled in Morocco are taxable on all their Moroccan and foreign-source income; those not domiciled there are taxable only on their Moroccan-source income. A third category covers persons, domiciled or not, for whom the right to tax is allocated to Morocco by a tax treaty.
In practice, a foreign manager seconded to a plant in Tanger Automotive City who spends more than 183 days a year in Morocco becomes a Moroccan tax resident and bears withholding on their salary under the Article 73 scale, in the same way as a Moroccan employee. Two adjustments exist. First, foreign nationals who contribute exclusively to foreign pension bodies may deduct those withholdings, but only up to the rate of withholdings borne by the staff of the Moroccan company they belong to (Art. 59-II-B). Second, where foreign-source income has already been taxed in a country linked to Morocco by a treaty, Article 77 organises the credit for foreign tax. The allocation of taxing rights between the state of residence and the state of activity then depends on each treaty; this point deserves a case-by-case analysis before the secondment, particularly for short assignments and remuneration paid by the parent company.
A non-resident who receives occasional remuneration from a Moroccan company without being its employee is subject to the 30% withholding on the gross amount (Art. 73-II-G-1°), again subject to treaties.
Free zone employees in Tangier: does income tax apply?
Yes, in full. This is one of the most common misunderstandings among investors setting up in Tanger Free Zone, Tanger Automotive City or Tanger Tech. The industrial acceleration zone regime (Law No. 19-94) grants the company a full corporate income tax exemption for its first five financial years, followed by taxation according to its situation (Art. 6-II-B-8° of the Tax Code); businesses subject to income tax enjoy an equivalent exemption on their profits (Art. 31-I-B-3°). But no provision of the Tax Code exempts the salaries paid by these companies: the only employees covered by a derogatory rate are those of companies with Casablanca Finance City status (20% for a maximum of ten years, Art. 73-II-F-9°), a regime unrelated to the Tangier free zones.
The payroll of a TFZ plant or a TAC supplier therefore bears income tax under the standard scale, withheld and remitted each month, with the annual return of Article 79. The specific foreign exchange regime of IAZ companies changes nothing here: salaries are paid in dirhams within the customs territory and the withholding is remitted to the collector responsible for Tangier. What sets a free zone company apart is its often large headcount, a high proportion of workers close to the minimum wage (and therefore in the exempt or 10% bracket), expatriate managers subject to the tax domicile rules above, and heavy exposure to audit where CNSS returns and the salary return diverge. From the firm’s office in Tanger Free Zone (Espace N°27, Lot 43B), our free zone accountant in Tangier handles these payroll files for companies in TFZ, TAC and Tanger Tech, whose tax and social benefits of free zones are detailed on our dedicated page.
Annual total income return: who has to file it?
An employee whose only income is a salary withheld at source by a single employer is in principle exempt from the annual return (Art. 86). The total income return of Article 82 is, however, required from anyone with several sources of income (two employers, salary and rent, salary and professional activity) or with foreign-source income: before 1 March for income other than professional income, before 1 May for professional income under the actual or simplified net income regime. For directors, management or office-holder remuneration is taxed like a salary through withholding; dividends bear the 11.25% final withholding in 2026, dealt with from the company’s side in our article on corporate income tax in Morocco in 2026.
Common mistakes on income tax
Applying an outdated scale. Many online simulators and tables still reproduce the former scale (exempt bracket of MAD 30,000, top rate of 38%, allowance of MAD 360 per dependant). The scale in force in 2026 is that of Article 73-I as published by the DGI: MAD 40,000 exempt, 37% above MAD 180,000, allowance of MAD 600 per dependant up to MAD 3,600.
Confusing marginal and average rates. An employee whose net taxable income exceeds MAD 180,000 is not “taxed at 37%”: only the portion above that threshold is.
Forgetting the professional expenses cap. Above MAD 78,000 of gross annual taxable income, the rate drops to 25% and the deduction is capped at MAD 35,000. Applying 35% without a cap on high salaries understates the withholding and exposes the employer to reassessment.
Believing the free zone exempts salaries. The corporate tax exemption of Law 19-94 does not extend to employees’ income tax.
Declaring interns and “Article 57-20°” employees without the annexes. The exemption is subject to the conditions of the text (ANAPEC registration, internship contract, permanent contract, hiring within the first two years of operation) and to filing the lists provided for in Article 79-II and 79-V. Likewise, Article 79 requires the residence permit number of foreign employees: an expatriate without a valid permit is first and foremost a filing anomaly.
Need advice on this topic? Cabinet Dami & Associés, chartered accountants with offices in Tangier and Casablanca, will reply within 24 hours.
How Cabinet Dami supports employers
Cabinet Dami & Associés, a chartered accountant registered with the Moroccan Order, prepares payslips, calculates withholding under the 2026 scale, prepares the monthly remittances and the salary return before 1 March, and secures special situations: expatriates, interns, employees eligible under Article 57-20°, occasional remuneration. Our payroll and HR management service operates from Tanger Free Zone for industrial and service companies in the region; the tax and social advisory team handles tax residence and treaty questions for foreign executives.
FAQ — Income tax Morocco 2026
From what salary do you pay income tax in Morocco in 2026?
As soon as annual net taxable income exceeds MAD 40,000 (Art. 73-I of the Tax Code), i.e. after deduction of social contributions and professional expenses. An employee on the minimum wage, whose annual gross pay remains below that threshold, bears no income tax.
What is the top income tax rate in 2026?
37% on the portion of net taxable income exceeding MAD 180,000 per year. This rate replaces the 38% rate of the previous scale.
How much is the family allowance?
MAD 600 per year per dependant (spouse, children under 27 without income above the exempt bracket), up to MAD 3,600 (Art. 74). It is set off against the employee’s withholding.
When must the employer file the salary return?
Before 1 March each year, for salaries paid during the previous year (Art. 79). Monthly withholdings, for their part, are remitted during the month following each payroll (Art. 174).
Are Tanger Free Zone employees exempt from income tax?
No. The exemption under Law 19-94 concerns the company’s corporate income tax for five financial years; the salaries it pays are subject to income tax under the standard scale, withheld and declared as anywhere else in Morocco.
Conclusion
Income tax in Morocco in 2026 rests on a clear scale published by the DGI, and the only thing to make sure of is that you are using the version in force: MAD 40,000 exempt, six brackets up to 37%, allowance of MAD 600 per dependant. The difficulty lies not in the scale but in the tax base: Article 57 exemptions, deductible contributions, the professional expenses cap, family situation and the tax residence of foreign executives. In Tangier, where free zone headcounts are large and management is often expatriate, an accurate payroll is first of all a documented payroll, reconciled between CNSS and the salary return.
Official sources: General Tax Code, 2026 edition (Art. 22, 23, 25, 31, 56 to 60, 73 to 77, 79, 80, 82, 86, 156, 174) — Directorate General of Taxes; Law No. 19-94 on industrial acceleration zones; Dahir No. 1-72-184 on the social security regime — CNSS.
For all of this year’s tax measures, see our summary Finance Law 2026 Morocco for companies.
The information in this article is provided for guidance only and may change as laws and regulations evolve. For an analysis tailored to your situation, contact Cabinet Dami & Associés — Tanger Free Zone: +212 539-39-81-18.
