On Thursday 30 November 2023, the National Budget of Zimbabwe was presented by the Minister of Finance, Economic Development and Investment Promotion at the Parliament.
The Minister proposed to review the local currency bonus tax free threshold from ZWL500,000 to ZWL7,500,000, with effect from 1 November 2023.
Click here to view the 2024 National Budget Speech
Bonus Tax Free Threshold Increase
The bonus tax free threshold values:
|Bonus Tax Free Limit ZWL 2022
|Bonus Tax Free Limit ZWL 2023
Impact of the Zimbabwe Increase in Bonus Tax Free Threshold on PaySpace
• Even though these changes have not been promulgated into law, the in-country advisors have recommended to deploy the increase in the bonus tax free threshold anounced by the Minister.
• Open runs will NOT be recalculated. If customers would like to apply the proposed updated bonus tax free threshold, navigate to Config>Force Company Recalculation.
• If the December run is already closed, an interim run can be created for the changes to take effect.
• Currently, all customers are on the non-cumulative tax method, based on the tax tables that were released from 1 August 2023.
• The system will take the year-to-date bonus into account and automatically recalculate the ‘Excess Taxable Bonus’ note component by applying the increased bonus tax free threshold.
• The tax calculation has been updated to take any change in taxable income into account based on the increased bonus tax free threshold.
• Important to note, if an amount has been processed on the tax code, BONP, in the current open run, it will also be added to the ‘Excess Taxable Bonus’ note component after the taxable bonus portion has been calculated.
• Therefore, to establish the taxable bonus portion that is applied in the tax calculation, deduct the amount on the tax code, BONP, from the ‘Excess Taxable Bonus’ note component.
• No changes were applied to the bonus tax threshold of the Zimbabwe USD entity.
Should you have any questions regarding the Zimbabwe Increase in Bonus Tax Free Threshold, please feel free to visit our Support page for more ways to get in touch, or email us at [email protected]
The PaySpace Team