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- FDS Averaging calculates employee tax (PAYE) by determining the average taxable income earned to date and annualizing it.

- The annual tax is then divided by 12 to get the average monthly tax, which is multiplied by the months worked to get cumulative tax due.

- After accounting for tax credits and the AIDS levy, the current month’s tax payable is the difference between the current cumulative tax payable and the cumulative tax already paid in the previous period. 

- This method ensures consistent tax deductions by smoothing out income fluctuations over the year.