Payroll Module > Payroll - Further Topics

See section 'Payrolls in Zimbabwe', above for comments on registering with ZIMRA, remittance of PAYE.

See 'Setup' section, above on how to set up the tax parameters on Belina PayrollHR.

All employees should have tax (PAYE) deducted from their income in line with gazetted rates.

Pay as you Earn (PAYE)

Taxation is deducted, in the form of PAYE, from every payment that is made to the individual whether paid daily, weekly, fortnightly, monthly or otherwise. This tax should be remitted to ZIMRA by the 15th of the next month.

Taxable Income

All remuneration, or amounts paid in terms of an employee's conditions of service are taxable. There are few, if any, exceptions to this rule. If in doubt speak to a taxation expert to advise you.

Benefits

Some forms of remuneration may not involve cash but rather the use of a company asset. ZIMRA specify the value of the tax benefit of company cars in line with their engine capacity and the value of the interest benefit on loans given. There may be other benefits such as the value of air time on a mobile phone and the use of a house belonging to the organization.

Deductions

The Income Tax Act allows the deduction of pension contributions, up to a specified limit. This amount is deducted from income before computing the tax payable. There are other deductions that are available where an expense in incurred in the production of income including NEC contributions. Clarity on whether an amount can be claimed needs to be obtained before processing the deduction. This would likely come from a taxation expert.

Tax Credits

Having calculated the amount of tax payable certain amounts may be deducted in the form of credits. Credits are given to:

•	Elderly credit to employees (who had already turned 59 at the commencement of the tax year)

•	Disability credit to disabled employees (if certified by ZIMRA)

•	Blind credit to blind employees (if certified by ZIMRA)

•	Medical expense credit for valid medical expenses incurred (based on 50% of the actual expense)

Tax Calculation

There are three (3) methods of calculating the amount of PAYE that should be deducted from an employee.

1.	Final Deduction System (FDS) Method (Forecast)

2.	Final Deduction System (FDS) Method (Average)

3.	PAYE - Non FDS Method

Methods 1 and 2 can only be used if the employee has been engaged since the beginning of the tax year. The FDS methods estimate, from what has been processed to date, the projected income, deductions and credits for the year. Having then calculated the tax payable for the year it deducts the amount paid to date and spreads the estimated tax remaining to be paid over the balance of the year.

Method 3 is used where an employee is engaged during the current tax year. This method projects annual income by assuming that the earnings and deductions in the current period will be earned throughout the year. Credits can be applied to the tax calculated.

In all cases if the employee has a tax query they should obtain a copy of their P6 form and take it to ZIMRA for consultation. To generate P6 forms see the topic 'P6' below.

Aids Levy

An additional 3% tax is payable on the amount of tax calculated in the form of an Aids Levy.

To edit tax parameters

Usually new tax parameters are setup after doing a year end procedure. You can edit existing tax parameters.

Tax credits

Set up the credit amounts for Blind, Disabled, Elderly and the medical credit percentage.