PAY AS YOU EARN

Income Tax Act (Chapter 23:06) Thirteenth Schedule requires an employer to withhold and remit employees tax (PAYE) in accordance with the tax deduction tables as prescribed. The current tax tables are published by ZIMRA annually as well as periodically when  necessary and are attached within this article.

The tax tables make it easier for taxpayers to compute PAYE with examples indicated on each and every tax table.  The following are important guidelines to select specific rates and to withhold the correct amounts of PAYE:

• • Currency
• • Tax period
• • Frequency
• • Taxable income

CURRENCY

For the year 2022, there are separate PAYE Tax Tables for Foreign (USD) and Local Currency (ZWL$).  The currency of remuneration determines the Tax Table to be used by the taxpayer. Highlighted below are brief insights of the US$ and ZWL$ tax tables:

• Foreign Currency (US$) Tax Tables for 2022.
• Tax Free Threshold remains at US$1200 per annum or USD100 per month
• Exempt Bonus USD700 per annum
• Zimbabwean Dollar (ZWL$) Tax Tables for 2022.
• Tax Free Threshold is now ZWL$ 1,100,000.00 per annum or ZWL$ 91,666.67 per month
• Exempt Bonus is now ZWL$500,000 per annum(• Bonus Tax Free Threshold: I also propose to review the local currency taxfree bonus threshold from ZW$100,000 to ZW$500,000 with effect from 1 November 2022.

TAX PERIOD

The 2023 Tax tables were implemented with effect from 1^st of January 2023.

FREQUENCY

The tax tables have daily, weekly, fortnightly, monthly and annual categories. The specific category to be used depends on the frequency of remuneration.

TAXABLE INCOME

The specific tax bracket should be used under the selected category depending on the employee’s taxable income. It is thus important to accurately compute the taxable income from employment as guided by the relevant legislative provisions. 

Once the aforementioned indicators are applied correctly, one can go ahead and follow the examples shown on the right side of each tax table. For more information and illustrations,  click and download respective tax tables on the following links: