End of Year Bonus Mauritius 2026: Calculation & Laws

The legal foundation for the End of Year Bonus in Mauritius is primarily found in Section 54 of the Workers' Rights Act 2019. This legislation stipulates that every person who has been in continuous employment with the same employer for the whole or part of a calendar year is entitled to a bonus.

Specifically, the law requires that if an employee is still in your service on December 31st, they must receive the bonus. However, the payment must be disbursed no later than December 20th. This ensures employees have the liquidity needed for the festive season. At Payroll.mu, we frequently advise clients that 'continuous employment' doesn't just mean a full year; even if an employee joined in June or left in November, pro-rata rules apply provided they meet the minimum service threshold (usually 8 months for those who resigned).

The standard calculation for the End of Year Bonus in Mauritius is the 1/12th rule. This means the bonus is equivalent to one-twelfth of the total sum earned by the employee as basic salary and specific allowances during that calendar year.

For instance, if an employee earns MUR 30,000 per month and received a total of MUR 360,000 in basic salary throughout 2026, their bonus would be MUR 30,000. It is crucial to note that 'earnings' for this calculation typically include overtime and productivity bonuses if they are part of the contractual remuneration, though some employers calculate it based solely on the basic salary depending on the specific Remuneration Order (RO) governing their sector. To ensure accuracy and avoid MRA disputes, using an automated system like Solution.mu or Payroll.mu is highly recommended to track these cumulative figures throughout the year.

A common point of confusion for Mauritius HR managers is the eligibility of employees who did not work the full 12 months. Under the current law:

1. Employees in service at year-end: Entitled to the bonus regardless of when they started (pro-rata).
2. Resigned Employees: If an employee resigns during the year but has completed at least 8 months of continuous service, they are entitled to a pro-rata bonus paid at the time of their departure.
3. Terminated Employees: If an employer terminates a contract for reasons other than gross misconduct, the pro-rata bonus is usually due.

For 2026, ensure your payroll records accurately reflect start and end dates. Failing to pay a pro-rata bonus to a departing eligible employee is a direct violation of the Ministry of Labour regulations and can lead to inspections.

While the bonus is a welcome windfall for employees, it is subject to taxation. For the 2026 tax year, the Mauritius Revenue Authority (MRA) maintains that the End of Year Bonus is taxable under the Pay As You Earn (PAYE) system.

However, historically, there is an exemption threshold—often the first MUR 50,000 of the bonus is exempt from income tax. Any amount exceeding this threshold is added to the employee's chargeable income and taxed at the applicable rate (0%, 2%, or 4% depending on the current progressive tax brackets established in the most recent National Budget). Employers must also ensure that CSG (Contribution Sociale Généralisée) and NSF (National Savings Fund) contributions are correctly calculated on the total monthly remuneration, including the bonus, where applicable. Our team at Anexa.mu can assist in auditing your year-end PAYE filings to ensure perfect compliance.

Managing year-end payroll manually for a growing Mauritian business is a high-risk activity. Between calculating pro-rata bonuses for new hires, adjusting for overtime, and ensuring the MRA's electronic filing (EDF) is updated, the margin for error is slim.

By leveraging Payroll.mu or QuickFocus.biz, businesses can automate the entire 13th-month calculation. Our software is pre-configured with the latest Workers' Rights Act parameters and MRA tax brackets for 2026. This means that with one click, your December payroll is generated, bonuses are allocated, and payslips are distributed via secure portals. This not only saves time but protects your business from the legal repercussions of late or incorrect payments. In the competitive Mauritius market, professional payroll management via Anexa is the benchmark for operational excellence.