Employer Tax Contributions

Tax Type	Rate	Base
Social Security (CNSS)	16.4% - 19.4%	Gross Salary (Employer portion)
Payroll Tax (VPS)	4%	Gross Salaries, wages, allowances, in-kind benefits
Professional Tax (IRPP withholding)	Progressive (0% to 30% or 40%)	Taxable Income

Filing & Compliance

• Monthly declarations and payments for IRPP and CNSS are generally due around the 15th of the following month.
• Annual summary declarations are required for total salaries, withheld taxes, and contributions.
• Maintain payroll records for a minimum of five years.

Employee tax deductions in Benin are calculated based on a progressive system, where higher earners pay a larger percentage of their income in taxes. Several deductions and credits can reduce the taxable income, impacting the final tax liability.

Tax Rates and Income Thresholds

• Taxable Income: Includes salaries, allowances, bonuses, gratuities, and benefits in kind.
• Tax-Exempt Income: The first XOF 60,000 of employment income is exempt from taxation.
• Progressive Tax System: Currently (as of February 2025), Benin's tax rates operate on a progressive scale. However, according to the draft 2025 Finance Bill, Benin plans to reduce its standard corporate tax rate to a flat rate of 20%, potentially influencing the individual income tax structure in the future. This proposed change awaits official enactment.

Deductions and Credits

• Dependent Children: Deductions are available for dependent children, reducing the overall tax burden. Further specifics on the amount of these deductions need clarification through official government resources.
• Tax Credits for Disabled Employees (2022): As of 2022, a tax credit was introduced for employers hiring physically disabled individuals. This credit amounted to USD 50 per month, up to a maximum of USD 2,250 annually. Its continuation into 2025 should be verified with official sources.
• Other Potential Deductions: There might be further deductions for specific expenses, such as social security contributions, professional dues, and certain insurance premiums. Confirming these with official resources is recommended.

Social Security Contributions

• Employee Contribution: Employees contribute 3.6% of their gross monthly salary for Social Security.
• Employer Contribution: Employers contribute 6.4% of the gross monthly salary for pensions, 9% for family allowance, and 1% to 4% for industrial injury insurance, varying based on the job's risk level.

Tax Administration and Compliance

• Tax Withholding: Employers are responsible for withholding taxes from employee salaries and remitting them to the tax authorities by the 10th of the following month.
• Tax Returns: Information on the specific deadlines and methods for filing annual tax returns for employees needs confirmation via official Benin government resources.
• Tax Amnesty Scheme (2025): The 2025 Finance Act introduces a temporary tax amnesty from January 1st to December 31st, 2025. Taxpayers who voluntarily submit past-due tax returns and pay in full will have penalties waived, provided they are not currently under audit.
• Electronic Payment Requirement (2025): For customs duties and taxes exceeding XOF 500,000, electronic payment is required within three days, with a 3% daily late payment interest.

Additional Considerations

• Double Taxation Treaties: Benin has double taxation treaties with several countries, potentially exempting foreign-source income from taxation or allowing tax credits. Verification of specific treaty provisions is crucial.
• Investment Code Incentives: Benin’s 2020 investment code offers various tax exemptions and incentives, particularly for significant investments. Clarification of eligibility and benefits is essential through official documentation.

This information is current as of February 5, 2025, and subject to change. Consulting official government resources or a tax advisor in Benin for the most up-to-date details is highly recommended.