Following the Budget Speech, the Zimbabwe Finance Bill contained the proposed tax changes as presented to Parliament by the Minister of Finance. With effect from 1 August 2022, the tax-free threshold on local currency remuneration has been adjusted from ZWD 300 000.00 to ZWD 600 000.00 per annum. The tax bands have also been adjusted to end at ZWD 12 000 000.00 per annum, above which tax will be levied at a rate of 40%. Customers should take note that these changes have not yet been enacted and should be deployed in the month of August at their own discretion.
No changes were made to the USD Tax tables.
Click here to access the new tables on the Zimbabwe Revenue Authority website.
Budget Highlights
Individual Taxation:
Effective from 1 August 2022, the monthly tax free threshold for employees has increased to ZWD 50 000.00.
The 40% marginal rate will be applicable to income above ZWD 1 000 000.00 per month.
The new thresholds and rates, as set out below, are applicable from 1 August to 31 December 2022.
No changes were made to the USD Tax Tables.
Monthly tax tables for August to December 2022 in ZWD:
| MONTHLY TABLE | |||||
| – | 50,000.00 | Multiply by | 0% | Deduct | – |
| 50,000.01 | 120,000.00 | Multiply by | 20% | Deduct | 10,000.00 |
| 120,000.01 | 240,000.00 | Multiply by | 25% | Deduct | 16,000.00 |
| 240,000.01 | 480,000.00 | Multiply by | 30% | Deduct | 28,000.00 |
| 480,000.01 | 1,000,000.00 | Multiply by | 35% | Deduct | 52,000.00 |
| 1,000,000.01 | and above | Multiply by | 40% | Deduct | 102,000.00 |
Impact of the Zimbabwe Finance Bill Update on PaySpace
- This change is effective for the period 1 August 2022 to 31 December 2022.
- Zimbabwe payrolls were NOT automatically recalculated. Customers must decide on a discretionary course of action based on the scenarios below.
- If no recalculation measures are taken for the period of August, either in August or September, the employee would need to file a tax return in order to rectify his taxes.
- Please note that as from recalculation or new run creation after release, the non-cumulative tax method will automatically be applied to all local payrolls to circumvent two tax tables in one tax year.
- From 1 January 2023, the tax method will automatically switch back to the tax method as selected on the Basic Company Information screen (Customer action: None).
Scenarios:
To apply the new rates in August 2022
Scenario 1: If the August run is still open and employees have not been paid, customers need to recalculate to apply the new tax rates and non-cumulative tax method. No manual adjustments will be necessary.
Scenario 2: If the August run is closed, add a post-run linked to August. Tax codes PAYE and AIDSLEVY will recalculate on the interim payslip and the non-cumulative tax method will be applied. No manual tax adjustments will be necessary. If applicable, adjust the ZMDL components (this depends on the income base which can be overridden at company level).
To apply the new rates in September 2022
Scenario 3: Instead of creating a post-run linked to August, customers can also recalculate the September open run to apply the new tax rates and non-cumulative tax method, and add manual Tax adjustments for the August period on the September payslip.
Should you have any questions regarding the Zimbabwe Finance Bill, please feel free to visit our Support page for more ways to get in touch, or email us at [email protected].
The PaySpace Team