The Training Levy Paid to the HRDC

The HRDC levy in Mauritius is a contribution that employers make to the Human Resource Development Council, the public body that promotes skills and training in the workforce. Many new employers learn about it only when their first payroll return is due. This guide explains how the human resource development levy works for an employer, what it is calculated on and how the money can come back to the company as a refund for approved training.

Please note that this page deliberately gives no rate and no refund percentage. Both are set by law and by HRDC rules that can change, and they must be confirmed on the day you act. The aim here is to show you the mechanism, the questions to ask and the paperwork to keep.

What the HRDC levy is and why it exists

The levy comes from the Human Resource Development Act. The idea is simple: employers contribute to a national training fund, and in return they can recover part of what they spend on training their own staff. A company that never trains anyone still pays; a company that trains regularly and documents it properly can get a share of the cost back.

It is a payroll-linked charge, but it is separate from tax and social contributions. If you are looking for the deductions that sit on a payslip, see PAYE in Mauritius for employers, CSG contributions and NSF contributions and payroll returns. This guide covers only the training levy.

Why it matters for a company

• It is a recurring employer cost, so it belongs in the payroll budget from the first hire.
• It has its own filing and payment routine, which is easy to overlook.
• Training spend that is planned and documented can reduce its net cost.

Who pays the training levy in Mauritius

The levy is an employer obligation. In practice, any company that has employees on its payroll should check whether it is liable, and it should do so before the first salary is paid. A company with no employees, such as a dormant or purely passive holding structure, usually has nothing to pay, although the answer depends on the facts. For the wider picture of such structures, see keeping a dormant company compliant.

Directors raise a common question. Whether a director's remuneration forms part of the base depends on how the director is engaged and paid, and on the wording of the rules in force. Do not assume either way. This is a point to settle with an adviser, together with the way you pay a director properly.

Employer registration comes first

Before you can report and pay the levy, the company must exist as an employer in the tax system. The practical steps are covered in registering as an employer before hiring. Once that is done, the levy is added to the monthly routine described in running monthly payroll step by step.

What the levy is based on

The levy is calculated on a base linked to the remuneration paid to employees, and it is expressed as a percentage set by the regulations. Three points deserve attention:

1. Which payments count. Basic salary is the starting point. Allowances, bonuses and benefits may or may not be included, depending on how the rules define remuneration. A 13th month bonus is a typical example of a payment to check.
2. Which employees count. The classification of staff (permanent, fixed-term, part-time, foreign nationals) can affect the base. Foreign staff hired under a work permit are discussed in hiring foreign staff.
3. Which period applies. The levy follows the payroll period, so the base is built month by month rather than once a year.

Because the base mirrors the payroll, the cleanest way to get it right is to keep payroll records consistent. A payslip that follows the payslip requirements already shows most of what you need.

How the levy compares with other payroll charges

For a side-by-side view of all payroll charges, see payroll taxes in Mauritius compared.

Refunds for training: how the mechanism works

The main practical interest of the levy is that part of the training cost can be recovered. The principle is the same in most years, even if the detailed percentages and ceilings change:

• The employer pays for training of its own employees.
• The training must fall within what the HRDC accepts, for example a recognised programme or provider.
• The employer applies for a refund and supplies proof of the spend and of the attendance.
• The HRDC examines the claim and pays a share of the eligible cost, not necessarily the whole amount.

What usually decides eligibility

Each year's rules should be checked, but the following questions come up repeatedly:

• Was the training approved, or does it qualify under the scheme, before it started?
• Does it relate to the employees' work, rather than to a purely personal interest?
• Is the provider recognised for this purpose?
• Is the invoice in the company's name, and was it paid?
• Is there a record of who attended and when?

Treat the refund as a reimbursement of part of the cost after the event, not as a discount at the time of purchase. The company advances the money and recovers a share later, so cash flow should allow for the delay.

A decision aid for a training plan

Filing and paying the levy

The levy is reported and paid through the employer's regular payroll returns. The exact form, channel and due date should be taken from the current HRDC and MRA instructions. If your company files online, the general walkthrough in filing with the MRA online will help you find your way around the portal.

Late or missing payment can attract penalties and interest. The wider picture is described in penalties for non-compliance in Mauritius. In a small company, the safest approach is to put the levy in the same monthly calendar as the other payroll deadlines, as shown in the compliance calendar.

Monthly checklist for the levy

• Confirm that the company is registered as an employer and that the HRDC reference is on file
• Check the list of employees and their pay for the month
• Decide which payments are part of the levy base and note the reasoning
• Calculate the levy with the rate currently published
• Pay and file by the due date, and keep the confirmation
• Update the training log with any course booked or completed this month
• Keep invoices, proof of payment and attendance records for any refund claim

Accounting and tax treatment

The levy is an employment cost. It is normally recorded as a payroll expense, and whether and how it is deductible for corporate income tax is a matter for the tax computation. The general approach is set out in which business expenses a company can deduct and in corporate income tax return filing. A refund received from the HRDC should be accounted for consistently, so that the net cost of training is visible in the accounts.

Keep the supporting documents with the rest of your files, as explained in company records: what to keep.

Common mistakes to avoid

1. Forgetting the levy because no one is paid much. The obligation follows the employer relationship, not the size of the salary bill.
2. Booking training first and asking later. Where prior approval or recognition is required, a course already paid for may not qualify.
3. Losing the attendance record. An invoice alone is rarely enough to support a claim.
4. Using last year's rate or ceilings. Rates and refund conditions can change; check them each time.
5. Mixing the levy with social contributions. They have different bases, different recipients and different filing routines.

When to ask for advice

The facts that drive the answer, such as the status of directors, the mix of local and foreign staff and the type of training, vary from one company to another. If your payroll is more than a handful of employees, or if you plan a significant training programme, ask a corporate services provider or an adviser to check the base and the refund conditions. To discuss your situation, you can use the contact form.