Lets talk about PAYE…

Pay As You Earn (PAYE) is a method of paying Income Tax on remuneration. The employer deducts tax from salaries or pension earnings before paying the employee the net salary or pension. The Final Deduction System (FDS) ensures that the amount withheld in any year of assessment is as nearly the same as the Income Tax liability for the employee concerned.

Employer’s Obligations under PAYE:

• Every employer is required to register with ZIMRA within 14 days of becoming an employer;
• Every employer who pays remuneration to any employee shall withhold PAYE according to the tax tables availed by ZIMRA every year. Every employer should calculate and deduct correct PAYE for each employee;
• Take into account all income, deductions and credits in determining PAYE;
• Employers should keep records and furnish returns in respect of their employees;
• Remit the total PAYE to ZIMRA by the 10th day of the month following the month for which the PAYE was withheld;
• Furnish employees who did not work for the whole year with Form P6; and
• Complete and submit an ITF16 return 30 days after the end of the year.

To avoid unnecessary such costs associated with non-compliance, clients are encouraged to:

• Keep proper records;
• Adhere to due dates for payment of taxes or submission of returns; and
• Pay the correct amount of tax.

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