Employment Cost Calculator for Zimbabwe
Calculate the total cost of employing someone in Zimbabwe, including taxes, benefits, and our management fee.
Employer Tax Contributions
| Tax Type | Rate | Base |
|---|---|---|
| PAYE (Pay As You Earn) | Progressive (0% to 40%) | Employee's taxable income |
| NSSA (Pension & Other Benefits Scheme) | 4.5% (employer) | Employee's monthly insurable earnings (subject to ceiling) |
| AIDS Levy | 3% | Employee's PAYE amount |
Filing & Compliance
- PAYE payments and returns are due by the 10th day of the following month.
- Employers must deduct and remit PAYE, NSSA contributions, and the AIDS Levy.
- Annual PAYE returns (ITF16) are generally replaced by the new monthly PAYE return.
In Zimbabwe, employers are legally obligated to deduct Pay As You Earn (PAYE) taxes from employee salaries and remit them to the Zimbabwe Revenue Authority (ZIMRA).
PAYE Calculation
The PAYE system is progressive, meaning higher earners pay a larger percentage of their income in tax. The tax-free threshold for 2025 is ZWL 2,800.00 or USD 100.00 monthly. The highest tax rate is 40% for earnings above ZWL 84,000.01 or USD 36,001.00 annually. For salaries paid in both ZWL and USD, the USD tax tables are used, and the tax due is apportioned accordingly. A 3% AIDS levy is added to the tax after credits.
The general process for calculating PAYE is:
- Calculate gross income (including benefits and allowances).
- Deduct exempt income (e.g., certain bonuses, reimbursements).
- Deduct allowable deductions (e.g., pension contributions).
- Apply relevant tax rates to the taxable income.
- Deduct applicable tax credits.
- Add the 3% AIDS levy.
Deductions and Exemptions
Several deductions and exemptions can reduce an employee's taxable income. These include contributions to approved pension funds (up to ZWL 852,000 or USD 3,000 annually), certain business expenses (travel, entertainment, motor vehicle), and charitable donations. Employer contributions to retirement funds and medical aid schemes are not taxable for employees.
Tax Credits
Tax credits reduce the final tax liability after the tax calculation. These include credits for the elderly, blind or disabled persons (USD 900 or ZWL equivalent annually), and a medical credit (USD 1 for every USD 2 spent).
Additional Considerations
- Employers must register with ZIMRA if they have employees earning above USD 300 monthly (or equivalent).
- PAYE returns and payments are due to ZIMRA by the 10th of the following month.
- Late payments incur a 100% penalty and 10% annual interest.
- Employers must maintain detailed records of employee compensation and tax deductions.
General Tax Information for Employees in Zimbabwe
Beyond the employer's obligations regarding PAYE, employees should be aware of other aspects of the tax system in Zimbabwe.
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Tax Residency: Individuals are considered tax residents if they are ordinarily resident and reside in Zimbabwe for at least 183 days in a tax year. Residents are taxed on their Zimbabwe-sourced income. Non-residents are taxed on income from services rendered in Zimbabwe, unless an applicable Double Taxation Agreement (DTA) exists and the employment lasted less than 183 days.
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Capital Gains Tax: Capital gains are taxed, although rollover relief is available for certain situations like the sale of a primary residence.
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Other Taxes: Employees also contribute to the National Social Security Authority (NSSA).
Note: This information is current as of February 5, 2025, and is subject to change. Always consult with ZIMRA or a tax professional for the most up-to-date information.
