<< Click to Display Table of Contents >> Navigation:  Payroll Module > Payroll - Further Topics > Taxation > Tax Methods Explained > Non-Final Deduction System (Non-FDS) Tax Calculation

The Non-FDS tax method is a non-cumulative P.A.Y.E. system deployed on November 1, 2025. It is specifically used for employees who do not meet the criteria for the Final Deduction System (FDS), such as those who do not work a full tax year.

Key Features of Non-FDS

•Non-Cumulative: Each month is calculated independently. Unlike FDS, there is no "forecasted" annual tax or month-to-month balancing.

•No Credits: Employers must not apply tax credits (e.g., medical credits or elderly credits) when computing P.A.Y.E. for Non-FDS employees.

•Applicability: Applies to employees who:

oChange jobs during the year.

oTerminate employment or start mid-year.

oHold multiple jobs or receive a pension.

Reporting

Employers must submit a separate TaRMS export file for Non-FDS employees under the Employee Management Module. See TARMS for detailed steps on exporting the TaRMS export file.

Annual Tax Return Requirements

Employees classified under Non-FDS are legally required to submit an annual income tax return (ITF1) if they:

•Worked less than 12 months.

•Changed employers or had multiple employers in 2025.

•Received a pension.

Submission Details:

•Method: Filed online via the ZIMRA Self-Service Portal (SSP).

•Deadline: The deadline for submitting 2025 returns is April 30, 2026.

 

Steps to Calculate Non-FDS Tax in Belina

1.Determine Gross Taxable Income: Calculate total earnings for the specific period, excluding non-taxable items.

2.Deduct Allowable Deductions: Subtract authorized deductions (e.g., NEC levy, trade union, NSSA, professional subscriptions and pension contributions) to arrive at the Taxable Income.

3.Apply P.A.Y.E. Tables: Use the current ZIMRA tax tables to calculate tax on that month's income only.

4.Zero Tax Credits: The employee will claim these credits directly from ZIMRA during their annual assessment.