Mauritius Fair Share Contribution & Company Car Benefit Updates

The Mauritius Revenue Authority (MRA) has issued a Circular to Employers (6 October 2025) setting out changes that affect payroll. The Circular (i) amends the valuation of the company car benefit with effect from 1 October 2025, and (ii) confirms the collection of the Fair Share Contribution (FSC) via PAYE for income earned from 1 July 2025.

Legislative summary of changes 

Revised company car benefit valuation

• The taxable benefit value for company cars provided to employees is amended from 1 October 2025.
• The valuation now depends on both the car’s cost and its engine capacity (or type, in the case of electric vehicles).

Fair Share Contribution (FSC) via PAYE

• The FSC is a new tax measure introduced by the Finance Act 2025, requiring high-income earners to contribute an additional 15% tax on the portion of leviable income above Rs 12,000,000 per income year.
• Notably, the MRA Circular instructs employers to withhold FSC through PAYE, i.e., monthly payroll deduction on a cumulative basis.
• The FSC applies to income earned from 1 July 2025 and is a temporary measure for income years 2025/2026, 2026/2027, and 2027/2028.
• Clarifications on FSC collection (legal context)   
  • The Finance Act 2025 introduced FSC for individuals (ss. 16B-16C) and amended s.93(1) (PAYE).
  • However, s.93(1) refers to FSC ‘under section 16E’, a section that does not exist. Meanwhile, s.16C(2) says FSC is payable on filing the individual’s return.
  • Until now, the law prevailed, pending any official communication or publication from the MRA, meaning the FSC is payable on assessment and not via payroll.
  • The MRA Circular is an official guidance document, but not legislation and cannot amend the law on its own.
  • Implementing FSC withholding via payroll aligns with the MRA’s stated position and day-to-day administration, which is generally prudent for compliance and helps avoid large year-end liabilities for affected employees.
  • Monthly collection smooths cash flow for high earners and keeps employers aligned with the authority’s expectations.
  • The Circular provides a monthly cumulative FSC threshold table and instructs employers to apply PAYE at 15% on the portion of cumulative chargeable income above the threshold.

Given Mauritius’s strict approach to taxing statutes, we recommend collection via PAYE as set out in the Circular, whilst remaining alert to any further official publications or legislative amendments. Employers may exercise flexibility in implementation, taking into account risk appetite and legal advice.

Additional information and resources 

• Click here to access the official publication.
• Please refer to release note 96839, titled New Fair Share Contribution component, and update to the company car benefit for more information.

Should you have any questions regarding the Mauritius – Fair Share Contribution and company car benefit, please feel free to visit our Support page for more ways to get in touch, or email us at [email protected]

The Deel Local Payroll Team