Income is the money an individual receives in compensation for their work, services, or investments. For businesses, Income means revenue that a business generates by selling its goods and services. Revenue is the money earned by a company from selling goods or services throughout its operations.
The Pay As You Earn (PAYE) system is a method of paying Income Tax on remuneration. The employer is mandated to deduct tax from salary or pension earnings before paying out the net salary or pension.
This article is intended to provide you with a simple and logical introduction to some basic principles of Income Tax as it applies to employees.
The Income Tax Act [Chapter 23:06] specifies what elements of an employee’s remuneration or earnings are subject to tax and at what rate of tax. It also deals with what income is exempt from tax and what deductions are allowed from these earnings, prior to tax being calculated.
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.
The official tax table operates on an escalating scale basis, (i.e. the higher your earnings, the greater percentage tax you pay on each bracket of earnings). When your earnings reach a certain amount, the percentage stops increasing and a flat rate of tax becomes applicable for any earnings above this level – that is Marginal Tax Rate (MTR).
The Table below shows tax tables for the period 1 January 2022 to 31 December 2022 for both USD and RTGS.
| Currency Earned by Employee | Tax-Free Threshold (for the Month) | Highest Rate of PAYE | Highest Bracket of Earnings for the year |
| RTGS$ | 25,000.00 | 40% | 6 000 001.00 and above |
| USD | 100.00 | 40% | 36 001.00 and above |
The due date for the submission of PAYE returns and payment is the 10th of the following month.
PAYE is calculated as follows:
- Determine gross income for the day/week/month/year.
- Deduct exempt income, for instance, bonus: You get => Income
- Deduct allowable deductions, e.g. pension: You get => Taxable Income.
- Please refer to https://www.zimra.co.zw/domestic-taxes/tax-tables for tax tables. You get => Tax on Taxable Income. NB for salaries with both local and USD currency components use the USD tax tables.
- Deduct tax credits e.g. elderly, blind or disabled persons (ZWL117 000.00 p.a or US$900.00 p.a effective 1 January 2022) and medical credit of $1.00 of every $2.00 paid: You get => Tax after credits.
- Calculate a 3% Aids Levy and add to tax after credits: You get the actual tax payable.
What is the formula to calculate taxable income?
Now, one pays tax on his/her net taxable income.
- For the first Rs. 2.5 lakh of your taxable income you pay zero tax.
- For the next Rs. 2.5 lakhs you pay 5% i.e. Rs 12,500.
- For the next 5 lakhs, you pay 20% i.e. Rs 1,00,000.
- For your taxable income part which exceeds Rs. 10 lakhs you pay 30% on the entire amount.
What is the current income tax rate in Zimbabwe?
In the long-term, the Zimbabwe Personal Income Tax Rate is projected to trend around 50.00 per cent in 2023, according to our econometric models.
What is the income tax in Zimbabwe?
ZWD 715,001 to 1,300,000 – 25% ZWD 1,300,001 to 2,400,000 – 30% ZWD 2,400,001 to 5,000,000 – 35% ZWD 5,000,001 and more – 40%
How much tax will I pay if my salary is 50000?
If you make ₹ 50,000 a year living in India, you will be taxed ₹ 6,000. That means that your net pay will be ₹ 44,000 per year or ₹ 3,667 per month. Your average tax rate is 12.0% and your marginal tax rate is 12.0%.
Which tax system is used in Zimbabwe?
Zimbabwe presently operates on a source-based tax system. This means that income from a source within, or deemed to be within, Zimbabwe will be subject to tax in Zimbabwe unless a specific exemption is available.