Zimbabwe’s Pay As You Earn (PAYE) Tax Tables explained

Pay As You Earn (PAYE) is a system that is used to calculate how much from your gross earnings your employer is going to deduct to pay the Zimbabwe Revenue Authority (ZIMRA) Income Tax on your behalf.

ZIMRA's Pay As You Earn (PAYE) Tax Tables explained

The Income Tax Act [Chapter 23:06] specifies which parts of your salary as an employee are subject to the tax. An example is from what we saw in the Finance Act of 2021 No.7 which said that anyone who earns part of their salary in United Stated Dollars will have it all regarded as being US$.

The pertinent question is, what exactly makes up an employee’s gross earnings? The answer to this comes by way of ZIMRA which says:

“Assume then for a moment that everything you earn, be it in cash, benefits, or an item of value given instead of cash is subject to some form of tax. However, the determination of the value and its associated tax liability in respect of any of these forms of payments will differ in some cases.”

ZIMRA

So what ZIMRA is saying here is that on top of the money you earn every month, whatever benefits that you might get from your employer are subject to the PAYE calculation. This could be if your company provides lunch, transport allowance, pays for your internet, mobile data, airtime, accommodation etc.

All of these things need to be broken down into monetary terms plus whatever you are paid per month/week to result in your gross earnings. It is from that amount that your employer then calculates using the Pay As You Earn Tax Tables to determine how much the company has to deduct from your gross earnings to remit to ZIMRA as Income Tax. The reminder that an employee walks away with, is classified as your Net Earnings.

Pay As You Earn (PAYE) Income Tax Tables

Let’s use the 2022 ZWL$ tax table as an example with a hypothetical gross salary of ZWL$200,000.00 per month. The fact that our scenario says ZWL$200,000 per month means that we will skip through the table to the Monthly Table.

RTGS (ZWL$) PAYE 2022

			DAILY TABLE
				Rates
from	–	to	821.92	multiply by	0%	Deduct	–
from	821.93	to	1,972.60	multiply by	20%	Deduct	164.38
from	1,972.61	to	3,945.21	multiply by	25%	Deduct	263.01
from	3,945.22	to	7,890.41	multiply by	30%	Deduct	460.27
from	7,890.42	to	16,438.36	multiply by	35%	Deduct	854.79
from	16,438.37	and above		multiply by	40%	Deduct	1,676.71
			WEEKLY TABLE
				Rates
from	–	to	5,769.23	multiply by	0%	Deduct	–
from	5,769.24	to	13,846.15	multiply by	20%	Deduct	1,153.85
from	13,846.16	to	27,692.31	multiply by	25%	Deduct	1,846.15
from	27,692.32	to	55,384.62	multiply by	30%	Deduct	3,230.77
from	55,384.63	to	115,384.62	multiply by	35%	Deduct	6,000.00
from	115,384.63	and above		multiply by	40%	Deduct	11,769.23
			FORTNIGHTLY TABLE
				Rates
from	–	to	11,538.46	multiply by	0%	Deduct	–
from	11,538.47	to	27,692.31	multiply by	20%	Deduct	2,307.69
from	27,692.32	to	55,384.62	multiply by	25%	Deduct	3,692.31
from	55,384.63	to	110,769.23	multiply by	30%	Deduct	6,461.54
from	110,769.24	to	230,769.23	multiply by	35%	Deduct	12,000.00
from	230,769.24	and above		multiply by	40%	Deduct	23,538.46
			MONTHLY TABLE
				Rates
from	–	to	25,000.00	multiply by	0%		–
from	25,000.01	to	60,000.00	multiply by	20%	Deduct	5,000.00
from	60,000.01	to	120,000.00	multiply by	25%	Deduct	8,000.00
from	120,000.01	to	240,000.00	multiply by	30%	Deduct	14,000.00
from	240,000.01	to	500,000.00	multiply by	35%	Deduct	26,000.00
from	500,000.01	and above		multiply by	40%	Deduct	51,000.00
			ANNUAL TABLE
				Rates
from	0	to	300,000.00	multiply by	0%	Deduct	–
from	300,001	to	720,000.00	multiply by	20%	Deduct	60,000
from	720,001	to	1,440,000.00	multiply by	25%	Deduct	96,000
from	1,440,001	to	2,880,000.00	multiply by	30%	Deduct	168,000
from	2,880,001	to	6,000,000.00	multiply by	35%	Deduct	312,000
from	6,000,001 and above		multiply by	40%	Deduct	612,000

According to the Monthly Pay As You Earn Tax Table, that individual makes in the 30% range (ZWL$120,000.01 to ZWL$ 240,000.00). This means to get their Net Salary/Earnings we will need to multiply their gross salary by 30% and subtract ZWL$14,000 from the result

• ZWL$200,000 x 0.3 = ZWL$60,000
• ZWL$60,000 – ZWL$14,000 = ZWL$46,000

The ZWL$46,000 a month is the Income Tax that the employer will deduct from the employees Gross Salary to pay ZIMRA. This means that the employees Net Income is ZWL$154,000.

3% AIDS Levy

Additionally, there is a 3% AIDS Levy that qualifying individuals will need to pay. This was instituted in 1999 and entails a 3% income tax for individuals and a 3% tax on profits of employers and trusts (with the exclusion of the mining industry until 2015).

The AIDS Levy is, in principle, used to acquire medications and means for the prevention of the disease. Over 55% of the amount raised is meant to acquire antiretroviral medication.

The AIDS Levy is calculated after deductions have been made from whatever tax credits the company or individual qualifies for. An example of this is the Youth Employment Tax Incentive which awards up to ZWL$180,000 per year to companies as a tax credit for employing individuals under 30.

You should check out

• Check out ZIMRA’s $180,000 a year tax credit for employing under 30s
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