Business Mauritius Warns Rs635 Salary Compensation Hike Poses Major Financial Strain

The Mauritian private sector lobby, Business Mauritius, has issued a strong warning, stating that the government’s newly announced salary compensation of Rs 635 from January 2026 will present “major financial constraints” for several key industries, including SMEs, manufacturing, BPO, retail, and construction.

The employers’ federation delivered its first official reaction today, Friday, December 12, following the government’s decision to grant the Rs 635 compensation to employees earning up to Rs 50,000.

While the group recognise the government’s efforts to support household purchasing power” amidst rising consumer costs, it stressed that “not all sectors have the same absorption capacity.”

Uneven Impact

Business Mauritius pointed out that while large companies would “relatively well adapt” to the increase, the smaller operators and specific industries face significant challenges. The federation has formally requested clarification on “eventual specific measures for exposed sectors.”

The adjustment represents a “notable effort for several businesses, with differentiated impacts according to sectors and the size of the operators,” the body stated.

Total Cost and Reach

The compensation will reach a total of 409,400 employees, representing 88% of the total workforce in Mauritius. This figure is broken down as follows:

• Private Sector: 320,300 employees
• Public Sector: 89,100 employees

The total annual cost of the compensation is estimated at Rs 3.38 billion. The burden will be shared between the private sector and the State:

• Private Sector Cost: Rs 2.64 billion
• State Cost: Rs 740 million

Source: Defi Media