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Table of Contents
Foreword By The Commissioner General ............................................................................................. 3
What Is The Final Deduction System?................................................................................................... 4
What Is The Difference Between P.A.Y.E System And F.D.S.? .............................................................. 4
When Should Employer Implement F.D.S.? .......................................................................................... 4
Does The Employer Need To Know Other Sources Of Employees` Income? ........................................ 4
Employer/Employee Training.................................................................................................................4
Assistance To Employers And Employees ............................................................................................. 5
Employers ‘Records ...............................................................................................................................5
Extra P.A.Y.E. Payments ........................................................................................................................ 5
Remuneration Liable To P.A.Y.E. ........................................................................................................... 5
Benefits ................................................................................................................................................. 5
Treatment of Certain Types of Remuneration ......................................................................................6
Treatment of Certain Classes of Employees.......................................................................................... 7
F.D.S. Audits .......................................................................................................................................... 7
Exemptions from Income Tax ............................................................................................................... 8
Allowable Deductions ........................................................................................................................... 8
Credits ................................................................................................................................................... 8
Excess Credits.......................................................................................................................................11
Aids Levy ............................................................................................................................................. 11
End of Year Adjustment ...................................................................................................................... 11
Submission of Returns (Form ITF 16……….............................................................................................11
Issue of Tax Certificates…………………….. .............................................................................................. 12
Forms................................................................................................................................................... 12
Obligations and Rights of Employees ................................................................................................. .12
Employees with PAYE Queries........................................................................................................... . 13
Obligations and Rights of Employers................................................................................................... 13
Obligation of Zimra.............................................................................................................................. 13
Tax Bands and Rates Of tax ................................................................................................................. 13
Worked Examples ............................................................................................................................... 14
List of Some of The Registered Professional Associations................................................................. ..22
List of Some of The Registered Charitable Organisations .................................................................. .22
FDS Forms .......................................................................................................................................... .27

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FOREWORD BY THE COMMISSIONER GENERAL

The Pay as You Earn (P.A.Y.E) system was introduced in 1966.Its aim was to benefit the country by
ensuring a steady and constant flow of revenue to the Government. It also enabled the employee to
spread the payment of tax over a period of 12 months rather than to issue an annual assessment
whose tax is payable within 30 days from the date of issue of the assessment. All employers
administered the P.A.Y.E. system, but at the end of the tax year, the Zimbabwe Revenue Authority
would assess the same P.A.Y.E. This was clearly a duplication of similar functions. Quite a lot of
resources were tied up in assessing the final tax liabilities.

The introduction of the Final Deduction System (F.D.S.) was one of the recommendations made by
the Commission of Enquiry into Taxation in 1986.Over the years ,ZIMRA has been working on
simplifying the P.A.Y.E. system by abolishing certain credits pending the introduction of F.D.S.

F.D.S. was finally introduced with effect from 1 January 2000 through the Finance Act No.21 of
1999.The burden of rendering tax returns is eliminated for the majority of employees. This system
was implemented on a phased basis, starting with a few large employers.

The aim of this system is to ensure that the P.A.Y.E. to be withheld in any year of assessment is the
same as the final income tax liability for the employee concerned. The employee whose income
consists solely of employment income will not submit returns after the end of the year if employed
by one employer throughout the year. The system works better under a computerised payroll
system. It is recommended that employers using manual systems change to computerised systems.

This guide is a reviewed version of the first issue published in the year 2002.

Reviewed February 2014

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WHAT IS THE FINAL DEDUCTION SYSTEM?

This is the system whereby the employer is directed to withhold P.A.Y.E. from the employee`s
remuneration in such a way as to ensure that the amount so withheld in any year of assessment is as
nearly the same as the income tax liability for the employee concerned.

WHAT IS THE DIFFERENCE BETWEEN P.A.Y.E SYSTEM AND F.D.S.?

Under the P.A.Y.E. system, the employer is required only to deduct P.A.Y.E according to the
P.A.Y.E. tables. The employees are obliged by law to submit income tax returns after the end
of the year.
P.A.Y.E is a non-cumulative method whereas F.D.S.is cumulative. This means that the
F.D.S.system continually calculates the cumulative tax liability on the total emoluments as
these are paid ,thus the correct tax liability is deducted by the employer at any given time
during the year.
The employer under the P.A.Y.E. system was not authorized to take into account credits in
calculating P.A.Y.E, under F.D.S. the employer is directed to take into account credits due to
an employee.
If for any reason there is an over or under-deduction of tax the employer can make an
adjustment under the F.D.S. which he could not do with the P.A.Y.E. system.

ADVANTAGES OF F.D.S.
Accuracy is achieved, as the system calculates the correct amount of tax at any given
time.
Tax refunds are done promptly, within the payroll.
Deductions and credits are allowed as they are claimed.
Reduction in tax returns submitted by employees and the need for assessments.
Reduced employee visits to the Revenue Office, a saving in terms of man-hours.

WHEN SHOULD EMPLOYER IMPLEMENT F.D.S.?

When the employer is directed by the Commissioner General to implement F.D.S. in terms of
paragraph 20A of the Thirteenth Schedule to the Income Tax Act(Chapter 23:06).

DOES THE EMPLOYER NEED TO KNOW OTHER SOURCES OF EMPLOYEES` INCOME?

The employer is not obliged to know the employees ‘other source of income. However, the
employees can voluntarily declare other employment income including pension if they wish to have
it taken into account when calculating the tax liability.

EMPLOYER/EMPLOYEE TRAINING
Once the employer has been directed to implement F.D.S., both the employer and employees will
receive training on the implementation of the system. Training can also be provided on request.

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ASSISTANCE TO EMPLOYERS AND EMPLOYEES
From the information given in this guide, employers will be able to answer many queries raised by
employees. Supplies of the guide will be available from ZIMRA offices and employers are asked to
ensure that the booklet is circulated amongst their staff.
If the query cannot be answered from information contained in this guide, the matter should be
referred to the ZIMRA office.

EMPLOYERS`RECORDS
Employers are required to maintain records showing all remuneration paid or payable, including
benefits and all deductions, in respect of each employee. These records will be inspected from time
to time by Revenue Officers and should be retained for a period of not less than six years from the
end of the tax year which the records relate. The records shall be kept in English language in terms
of Section 37B of the Income Tax Act.

EXTRA P.A.Y.E. PAYMENTS

An employee can make a written request to his employer for an additional amount of P.A.Y.E. to be
deducted from his salary, over and above the statutory amount e.g. to take into account other
employment income earned elsewhere including pension. Such request must be complied with.

REMUNERATION LIABLE TO P.A.Y.E.

The definition of remuneration liable to P.A.Y.E. includes any amount of income paid or payable by
way of salary, leave pay, allowance, wage, pay, bonus ,gratuity, commission, fees, emoluments,
pension, superannuation allowance , exercising of the share option scheme, retirement allowance or
stipend, whether in cash or otherwise, including the value of fringe benefits and fees payable to
working directors.
BENEFITS
All benefits which accrue to the employee as a result of services rendered to the employer are
taxable.
These include:-
-free use of employer`s motor vehicles for private purpose
-housing
-soft loan interest
-education
-passage
-telephone
-furniture
-entertainment allowance
-electricity and water
-domestic servant
-security services
-holiday allowances
-cost of groceries

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-cost of clothing (excluding protective clothing)
-transport allowances
-any other payments over and above basic pay.
Regular benefits enjoyed should be taxed as and when they accrue.
Irregular benefits such as school fees for the employee`s children are taxed in the month in which
they are paid.

TREATMENT OF CERTAIN TYPES OF REMUNERATION

Advances
Advances against salary, bonus or commission constitute remuneration and P.A.Y.E. must be
deducted in the month in which the advance is paid. An employer is responsible for the
deduction of correct P.A.Y.E. from any payment he makes and is personally responsible for
any under-deductions.

Allowances
Allowances such as representation, travelling, entertainment and subsistence are taxable to
the extent that they are not expended on the employer`s business. They should be added to
other income when calculating P.A.Y.E. This excludes allowances paid to civil servants.

Arrear salary
Arrear salary refers to salary which accrues when there is a legal dispute. Arrear of salary,
wages, etc. become taxable on the date on which the decision to pay the arrear salary is
made.
N.B Delay in salary payment due to defaults does not constitute arrear salary.

Bonuses and commissions

A bonus or commission is subject to P.A.Y.E. on the date the amount is declared or paid
whichever is the earlier except where the amount is in the form of a percentage of the
profits, in which event the accounting date becomes the accrual date.

Commutation of amounts due under a contract of employment

Where an employer terminates the service of an employee before the expiry of the contract
and pays him the amount due per the contract for the remaining period, that amount is
subject to P.A.Y.E.

Director`s fees

Director`s fees are subject to P.A.Y.E if the director performs services as an employee, or
receives other remuneration subject to PAYE( e.g director’s fees and salary or director’s fees
and holiday allowance)
Director`s fees paid to a non-executive director who does not receive any other
remuneration subject to P.A.Y.E will be subject to withholding tax in terms of the Thirty
Third Schedule of the Income Tax Act Chapter 23:06 .

Refund of pension contributions

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 When the employee withdraws from an approved pension fund, the employer is required to
apply for a tax directive from the nearest ZIMRA office P.A.Y.E. should be deducted in
accordance with that directive.

TREATMENT OF CERTAIN CLASSES OF EMPLOYEES

Deceased employees
Following the death of an employee, the employer is required to issue a form P6 within 30
days from the date of payment of any funds. A tax return needs to be submitted for
assessment to the nearest ZIMRA office.

Employees who change employment

When an employee leaves the service of an employer, the latter is obliged to furnish the
employee with a form P6 within 30 days of the employee leaving his employ. The employee
is required to submit a return at the end of the year for assessment by the nearest ZIMRA
office.

Casual temporary employees

Where a casual labour is employed P.A.Y.E. must be deducted in accordance with the tax
tables.

New employees
Remuneration for new employees who start during the year will be subject to P.A.Y.E in the
normal way. No adjustments are done at the end of the year. The employee is required to
submit a tax return at the end of the year.

F.D.S. AUDITS
Revenue officers will carry out periodic audits to check:
(a) accuracy of tax calculations;
(b) Treatment of employees ‘credits ,deductions ,benefits and employment contracts;
(c) Promptness of tax remittances ,and
(d) Tax compliance.

Where it is established that non-compliance and errors were deliberately made, penalties will be
imposed for the audit.
Employers are encouraged to co-operate and ensure that all tax records and other requirements are
available for the audit.

EXEMPTIONS FROM INCOME TAX

Exemptions are provided for in the 3rd Schedule to the Income Tax Act (Chap23:06) and include the
following:-

Benefits and allowances paid to civil servants

Incentives paid to public servants

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 Exempt portion of annual bonus /performance award.
Exempt portion of Retrenchment package
Pension received by an elderly tax payer. An elderly person is someone who is 55 years and
above.

ALLOWABLE DEDUCTIONS

Deductions are provided for in Section 15 of the Income Tax Act (Chap23:06) and include the
following:-
Pension contributions
Pension contributions are tax deductible, subject to statutory restrictions.
The contributions are deducted before applying tax. Where the employee is a member of
several approved funds (including retirement annuity fund and NSSA) all excess
contributions should be recorded on form ITF45 for each year.

Professional ,Trade or Technical Associations

Subscription fees paid to registered bodies by qualified members are tax deductible in full in
the year in which they are paid. To be eligible, employees should provide the employer with
receipts. Subscriptions to sporting or recreation clubs are not tax deductible. See item 31 for
some of the registered associations.

Tradesman`s tools
Costs of tradesman’s tools are allowed in full on purchase and on replacement (if it is in
terms of the employment contract).Receipts should be retained by the employer for a
period of not less than 6 years.
Only qualified journeymen are eligible, trainees and apprentices are not.

Donations
Donations to the following organisations are allowed as deductions:-

National Scholarship Fund or the National Bursary Fund;

A charitable trust administered by the Minister responsible for Social Welfare or Health in
their official capacity or their respective officers in their official capacities, and
To the State for use in-
 Construction, extension or maintenance of hospitals;
 Purchase of medical equipment for hospitals, and
 Procurement of drugs for hospitals.

Provided that the benefiting hospitals are operated by State, local authorities, or religious
organisations.

In such cases, receipts bearing the registration number of the beneficiary organisation should be
furnished to the employer. See page 22 for some of the registered organisations.

CREDITS

(a)Mentally or Physically Disabled Persons `Credit

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 A credit of the specified amount shall be deducted from the income tax with which a taxpayer is
chargeable, where it is proved that the taxpayer is mentally or physically disabled to a
substantial degree, but is not blind.
A credit of the specified amount shall be deducted from the income tax with which a taxpayer
who is proved to be mentally or physically disabled to a substantial degree.

NOTE: The taxpayer should get a letter from a specialist medical doctor, stating the nature and
degree of disability and apply for a written directive from their nearest ZIMRA office.

Any portion of a deductible credit which is not applied in reduction of the income tax with which
a married person is chargeable shall be allowed as a deduction from the income tax which his or
her spouse is chargeable. Both spouses should complete and submit returns for the relevant tax
year so that the transfer can be facilitated.
No credit shall be deductible if the taxpayer is not at any time in the period of assessment
ordinarily resident in Zimbabwe.
A person shall not be regarded as being mentally or physically disabled if his disability is of a
temporary or transitional nature.
Mentally or Physically Disabled Persons `Credit shall not be apportioned. Allow in full monthly
and adjust to ensure full credit at the end of the year.

(b) Elderly Person`s Credit

A credit of the specified amount shall be deducted from the income tax with which a taxpayer is
chargeable, where he has attained the age of fifty-five years prior to the commencement of the year
of assessment. If the period of assessment is less than twelve months, the amount referred to in this
paragraph shall be reduced proportionately.

(c ) Blind Person`s Credit

A credit of the specified amount shall be deducted from the income tax with which a taxpayer who is
a blind person is chargeable.

Provided that any portion of such credit which is not applied in reduction of the income tax with
which a blind person who is married is chargeable shall be allowed as a deduction from the income
tax which his or her spouse is chargeable.

Blind person`s credit shall not be apportioned. Allow the full monthly credit and adjust to allow
full annual credit at the end of the year.

(d)Credit for Cost of Purchasing invalid Appliances ( Allowable to Residents Only)

A credit of the specified limit shall be granted on the following:-

A wheelchair or any mechanically propelled vehicle which is specially designed and

constructed for the carriage of one person, being a person suffering from a physical defect
or disability; or
any artificial limb, leg callipers or crutch ; or

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 any special l fitting for the modification or adaptation of a motor vehicle ,bed, bathroom or
toilet to enable its use by a person suffering from a physical defect or disability; or
spectacles or contact lenses.
The credit is 50% of the total cost of the appliances used by the taxpayer, his spouse or any
child of the taxpayer as a consequence of any mental or physical defect or disability.

e) Medical Expenses (Allowable to Residents Only)

'' medical expenses'' include the sum of any payments made for:-

Services rendered to a taxpayer , his spouse and minor children and one or more of them by
a medical or dental practitioner; and
Drugs and medicines supplied to a taxpayer, his spouse and minor children or one or more
of them on the prescription of a dental or medical practitioner, and
the accommodation, maintenance, nursing and treatment, including blood transfusions and
X-ray and laboratory examinations, tests and the like, of a taxpayer, his spouse and minor
children or one or more of them in or at a hospital, maternity-home, nursing-home,
sanatorium, surgery, clinic or similar institution; and
the conveyance by ambulance, including an air ambulance, of a taxpayer, his spouse and
minor children or one or more of them; and
the amount of any contributions paid to a medical aid society in respect of the taxpayer or
his spouse or any minor children.

The credit is 50% of the total amount paid.

For practical purposes it should be noted that:-

All medical expenses must have been paid by the employee before they can be allowed for
credits
For employees who are members of medical aid societies the date of the shortfall as shown
on the claim settlement advice shall be used to determine when the expense becomes due
for payment.
Employers may accept receipts for full expenses for non-members of Medical Aid Societies.
The employees should claim for the medical expense credit using FDS 1 and furnish it to the
employer.
All original medical receipts should be retained by the employer for a period of not less than
6 years from the date of the claim.
It must be noted that medical expenses are limited to the taxpayer, his spouse, and minor
children.
N.B. Minor children include legally adopted minor children.

Payments to traditional and faith healers do not rank for credits. E.g. Zinatha
practioneers, Vapostori, etc.

NOTE: The following medical expenses are not allowable: -

All expenses of social or cosmetic nature e.g. plastic surgery.

Costs of hiring television sets, radios or other entertainment services at a medical
institution e.g. at a hospital.

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 All medical expenses in respect of dependants who are not minor children of the
taxpayer.
In the case of a polygamous marriage, all expenses relating to the 2nd and subsequent
spouses.
Cost of all drugs purchases without a medical or dental practitioner's prescriptions.
Medical expenses paid to any traditional healer.
All expenses for all medical services not provided for no provided by a medical or dental
practitioner except conveyance by an ambulance.
Cost of drugs purchased over the counter e.g. in supermarkets or pharmacies without a
doctor's prescription.
All medical expenses for non-residents.
All medical expenses which are fully reimbursed from another source.
Cost of any services provided which are not for diagnostic or treatment purposes,
including medical examinations for insurance policies, employment, emigration, or
educational purposes.

EXCESS CREDITS
Credits exceeding monthly P.A.Y.E. should not give rise to negative P.A.Y.E. Any excess credits should
be rolled over into the next pay periods until fully utilized except in December when the unutilized
credit falls away.

AIDS LEVY
The rate is specified in the Finance Act. Currently, the rate for Aids Levy is 3% and is applied on
P.A.Y.E. after allowing credits. It affects all employment income including refunds of pension
contributions.

END OF YEAR ADJUSTMENT

At the end of the year, the employer must make final adjustments to every employee's P.A.Y.E.
taking into account the total income, deductions, and credits to which the employee is entitled.

In the case of shortfalls, the employer is obliged to make good the shortfalls and remit the correct
tax. The employer will recover any shortfalls from the following month's pay for the employees
concerned.

SUBMISSION OF ITF 16 RETURNS BY EMPLOYERS

Every employer should submit to ZIMRA a return (ITF16) in an electronic version on a disc, flash or
through email showing the total income, deductions, PAYE, credits as per the format available from
ZIMRA offices
Employers with non-computerised payrolls should submit their ITF16 in Excel Format.

The ITF16 should be submitted within 30days after the end of the year of assessment (i.e. by 30
January of the following year)

The employer should sign a declaration form on submission of the ITF 16 .The form endorses that
the employer has furnished the ITF 16 to the best of their ability and in full.

Upon receipt, ZIMRA acknowledges receipt of ITF 16 from the Employers. ZIMRA is obliged give the
employer the report on FDS adjustments and assessment for each ITF 16 submitted.

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The employer is required to issue P6 tax certificates to employees after implementing the
adjustments as per FDS adjustment report

Civil Penalties

ITF 16 Returns that are submitted late are subject to Civil Penalties as legislated

ISSSUE OF TAX CERTIFICATES

All employees whose remuneration was subject to P.A.Y.E. are entitled to be issued with tax
certificates (forms P6) for their records. The employer is required to issue forms P6 within 30 days
from the end of the relevant year or within 30 days of terminating employment services as the case
may be. Forms P6 for the employees who are employed by the same employer for the full tax year
should be marked “F.D.S.”on the face. The non FDS cases are to be marked “non FDS” on the face

SUBMISSION OF RETURNS BY EMPLOYEES (FORMS ITF 1)

a) Who should submit returns of income?
All those employees who:-
Terminate employment during the year of assessment;
Change employment during the year;
Work part time at the same time being fully employed by another employer;
Start employment during the course of the year;
Receive pensions;
Are executors/ executrix of deceased estates;
Are in receipt of income which is not subject to P.A.Y.E.
b) Who should not submit returns of income?
All those employees whose income consists of employment income only and whose
employer was directed to administer P.A.Y.E. under the F.D.S. system and did so during
the year concerned, and the employee was in continuous employment with the same
employer for the whole year.
All employees who are required to submit a return will be notified by the
Commissioner General by notice in the press. This notice is usually published in January
or February of each year.

FORMS
ITF 1 – Individuals for employment income only
ITF 1A – Individuals and trusts for business profits and investment income only.
CGT 1 –companies and individuals for capital gains only.

OBLIGATIONS AND RIGHTS OF EMPLOYEES

Employees have rights and obligations to:-

have their credits and deductions taken into account in determining their PAYE
liabilities;
be issued with forms P6 at the end of the year or on leaving employment during the
year;
furnish their employers with information on other income and proof of deductions
and credits;
have their PAYE correctly calculated, and

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 be refunded excess PAYE and pay PAYE shortfalls after final adjustments.

EMPLOYEES WITH PAYE QUERIES

Revenue officers will visit the employer to ensure that PAYE is correctly calculated. Training can be
offered to employees upon request. Employees who are not happy with their PAYE calculations can
approach these officers for assistance or they can refer their queries to the nearest ZIMRA office.

OBLIGATIONS AND RIGHTS OF EMPLOYERS

Calculate and deduct correct PAYE for each employee;
Take into account all income, deductions, and credits in determining PAYE liabilities
Remit the total PAYE to the Commissioner General by the 10th of the month
following the month for which PAYE is withheld;
Make end of year adjustments for PAYE;
Issue tax certificates for all employees;
Maintain and furnish all relevant employee's records to revenue officers;
Make good any shortfalls and refund excess PAYE to employees;
Ensure that the Commissioner General's directive is available for inspection at all
reasonable times by any employee who may be affected by it;
Receive adequate training on FDS from the nearest ZIMRA office;
Facilitate education of employees on FDS, and
Be supplied with all relevant forms on FDS by the nearest ZIMRA office.

OBLIGATION OF ZIMRA
ZIMRA is obliged to:-
Employers and employees on FDS;
Assist employers and employees on FDS;
Provide adequate education on FDS
Assist employers and employees on any queries timeously;
Assist in the smooth implementation of FDS, and
Provide all the necessary forms.

TAX BANDS AND RATES OF TAX

These appear under the Schedule to Chapter 1 of the Finance Act (Chap – 23:04) and are available
on the Zimra Website.

FINAL DEDUCTION SYSTEM METHODS

There are two recommended methods of calculating PAYE under FDS namely the Forecasting and
Averaging Methods. The employer must use one method of PAYE calculation for a particular year. He
can use either method provided it yields the desired results.

FORECASTING AVERAGING
Formula AVERAGING METHOD
Earnings to date (net of deductions) - i.e. 1. Taxable earnings to date.
including current period earnings. 2. Divide by the number of months so far
Add forecasted monthly earnings to the worked to get the average taxable income.

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 end of the year based on taxable earnings. 3. Multiply by 12 to get the annual tax
Calculate the annual tax on annual income chargeable.
by reference to the Annual Tax Tables 4. Calculate the annual tax chargeable.
including Aids levy. 5. Divide the annual tax by 12 to get the
Deduct credits to previous period. average tax chargeable.
Subtotal 6. Multiply the verge tax chargeable by the
Subtract PAYE deducted to date. number of months so far worked to get the
cumulative tax chargeable to date.
Subtotal 7. Reduce the cumulative tax chargeable to
Calculate the average monthly PAYE by date by the cumulative credits claimed to date
dividing the tax balance by the remaining to get the cumulative tax payable to date.
months, including the current month. 8. Add 3% Aids levy to the cumulative tax
Deduct current month's credits including payable to date.
Aids levy. The result would be PAYE for the 9. Subtract the cumulative tax paid to the
month in question. immediate past period from the cumulative tax
payable to date.
10. The difference is the tax payable in the
current month.

WORKED EXAMPLES – USING THE FORECASTING METHOD

EXAMPLE 1

EXAMPLE 1
Below are the earnings of Mr P. Peter for January
2012.He is disabled.
Basic Salary 2,500
Pension Contributions 180
NSSA Contributions 120
Trade Union Subscriptions 50
Old Mutual Retirement Annuity Fund (RAF) 80
Contributions
Medical Aid Contributions 100
Medical Expenses for January 200
Computation
Salary 2,500.00
Less:
Pension contributions 180
NSSA 120
Old Mutual RAF 80
380.00
Trade Union Subscription 50.00

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 430.00
Taxable Income 2,070.00

Forecasted Annual Income [2,070+(2,070*11)] 24,840.00

Annual Tax including levy 5,203.56

Less: PAYE paid to previous period 0.00
Total PAYE for remaining months 5,203.56

Average monthly PAYE [5,203.56 ÷12] 433.63

Less: Credits for the current month

Monthly Disability Credit 75.00
Medical Aid Contributions [100@ 50%] 50.00
Medical Expenses [200@ 50%] 100.00
225.00
Add: 3% Aids Levy [225*1.03] 231.75

PAYE for January 2012 201.88

EXAMPLE 2

Regular Payments

Assume that there are no changes in Mr P. Peter earnings except he did not incur any medical
expenses in February.

Forecasted Annual Taxable Income

Jan Feb
[2,070.00) + (2,070.00) + (2,070 x 10 24,840.00
months) ]

Annual Tax Including Aids Levy 5,203.56

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Less: Credits to previous month 231.75
PAYE to previous month 201.88
Total Deductions 433.63

PAYE for outstanding months 4,769.93

Average Monthly tax chargeable [4,769.93 ÷ 11 ] 433.63

Less: Credits

Monthly Disability Credit 75.00

Medical Aid Contributions [100@ 50%] 50.00
Total Credits including 3% Aids Levy [125*1.03] 128.75

PAYE for February 2012 304.88

Irregular Payments
Assume that there are no changes in Mr P. Peter earning except that he received cash in lieu of
leave in March of $ 2 000.

Jan Feb Mar

(2,070) + (2,070) + (2,070 + 2 000) + (2,070 x 9 months) 26,840.00

Annual Tax including levy 5,821.56

Less: Accumulated credits to last month[ 231. 75+128.75] 360.50

PAYE Paid to date [201.88+304.88 ] 506.76

Total Deductions 867.26

Net PAYE for outstanding months 4,954.30

Average monthly PAYE [4,951.21 ÷ 10 ] 495.43

Less: Current Credits

Monthly Disability Credit 75.00

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 Medical Aid Contributions [100@ 50%] 50.00
Total Credits including 3% Aids Levy [125*1.03] 128.75

PAYE for March 2012 366.68

SALARY INCREMENTS

Assume a salary increment in April to the effect that Mr P. Peter taxable income increases to

$3 000.He incurs $260 on purchasing drugs and $50 is refunded by the Medical Aid Society

Forecasted Annual Taxable Income

Jan Feb Mar Apr May-Dec

2 070 + 2 070 + 4 070 + 3 000+ (3 000*8months) 35,210.0
0

Annual PAYE including Aids Levy 8,407.89

Less: Accumulated Credits to previous month 489.25

PAYE paid to previous month 873.13

Total deductions 1,362.38

Net PAYE for outstanding months 7,045.51

Average monthly PAYE [7,045.51 ÷ 9 ] 782.83

Less: Current Credits

Monthly Disability Credit 75.00
Medical Aid Contributions [100@ 50%] 50.00
Medical shortfalls [(260-50)*50%] 105.00
Total Credits including 3% Aids Levy [230*1.03] 236.90

PAYE for April 2012 545.93

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CREDITS EXCEEDING MONTHLY TAX

Assume there are no changes in the earnings detail except that Mr. P. Peter incurs a medical
shortfall of $2 500 in May.

Forecasted Annual Taxable Income

Forecasted Annual Taxable Income

Jan Feb Mar Apr May June- Dec
2070 + 2070 + 4070 + 3000 + 3000 + (3 000*7months) 35,210.00

Annual PAYE including Aids Levy 8,407.89

Less: Accumulated Credits to previous month [489.25+236.90] 726.15

PAYE paid to previous month [873.13+545.93] 1,419.06

Total deductions 2,145.21

Net PAYE for outstanding months 6,262.68

Average monthly PAYE [6,262.68 ÷ 8 ] 782.84

Less: Current Credits

Monthly Disability Credit 75.00
Medical Aid Contributions [100@ 50%] 50.00
Medical shortfalls [2,500*50%] 1,250.00
Total Credits including 3% Aids Levy [1,375*1.03] 1,416.25

PAYE for May 2012 NIL

FORECASTED METHOD

Irregular payments like bonus, cash in lieu of leave, overtime, fluctuating commission, gratuity,
once-off incentives etc. should not be forecasted for the remaining months to the end of the year.

They should be added to the taxable earnings for the month in which they are paid. (See March
example with cash in lieu of leave).

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Regular payments like basic salary, salary increment, fixed commission, fixed benefits and
allowances should be forecasted for the remaining months to the end of the year. (See the April
example with salary increment).

WORKED EXAMPLES USING THE AVERAGING METHOD

Normal Salary

Mr Aston had the following earnings and deductions for the period from January to March 2011

Monthly Salary 600.00

Nssa per Month 6.00
Pension per month 10.00
Medical Aid Contributions 20.00

Gross Salary January to March 1,800.00

Cumulative Tax paid to February 137.60

Allowable deductions January to March

NSSA 18.00
Pension 30.00
Cumulative Medical Aid [20*3*0.50] 30.00

Gross Salary : January- March 1,800.00

Less: Deductions:
NSSA (Jan- March) [6*3] 18.00
Pension (Jan-March) [10*3] 30.00
48.00
Taxable income 1,752.00

Average taxable income [1,752/3] 584.00

Projected Annual Income [584*12 ] 7,008.00

Annual Tax as per tables 801.60

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Average monthly tax [801.60/12] 66.80

cumulative tax to March 2012 [66.80*3] 200.40

Less: cumulative credits 30.00

Net PAYE before levy 170.40

Add: 3% Aids Levy 5.11

Total PAYE Chargeable [January- March] 175.51

Less: PAYE Paid up to February 2012 137.60

PAYE Payable in March 2012 37.91

Assuming that Mr Ashton received a bonus of $1,200.00 and CILOL of $200.00 in March:

Gross Salary : January- March 1,800.00

Less: Deductions:
NSSA (Jan- March) [6*3] 18.00
Pension (Jan-March) [10*3] 30.00
48.00
Taxable income 1,752.00

Average taxable income [1,752/3] 584.00

Projected Annual Income [584*12 ] 7,008.00

Add: Bonus [1,200-1,000] 200.00

CILOL 200.00

Total Taxable Income 7,408.00 A

Annual Tax as per tables (A) 881.60 B

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Tax on taxable income without Bonus & CILOL[7,008] 801.60 C

Tax on income without Bonus & CILOL [B-C][881.60- 80.00

801.60]

Average monthly tax Without Bonus & CILOL[801.60/12] 66.80

cumulative tax to March 2012 [66.80*3] 200.40

Add: Tax on Bonus & CILOL 80.00

Total Tax Chargeable before allowing Credits 280.40

Less: cumulative credits [60.00*0.50] 30.00

Net PAYE before levy 250.40

Add: 3% Aids Levy 7.51

Total PAYE Chargeable [January- March] 257.91

Less: PAYE Paid up to February 2012 137.60

PAYE Payable in March 2012 120.31

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LIST OF SOME OF THE REGISTERED PROFESSIONAL ASSOCIATIONS

The Dental Association of Zimbabwe

The Zimbabwe Medical Association
The council of Veterinary Surgeons
The Architects Council of Zimbabwe
The Zimbabwe Teachers Association
The Zimbabwe Institute of Engineers
The Institute of Chartered Secretaries and Administrators
The Institute of Chartered Accountants of Zimbabwe
Institute of Bankers Association(IOBZ)
Institute of Marketing Management
Zimbabwe Association of Accounting (ZAAT)
Chartered Institute of Management Accountants(CIMA)
Institute of Accounting and Commerce (IAC)
Law Society of Zimbabwe
Zimbabwe Nurses Association(ZINA)
National Employment Council(NEC)
Zimbabwe Congress of Trade Unions(ZCTU)

LIST OF SOME OF THE REGISTERED CHARITABLE ORGANISATIONS

(a) HARARE

Children's Homes

SOS Children's Home

Chinyaradzo Children's Home
Upenyu Hutsva Children's Home
Matthew Rusike Children's Home
Harare Children's Home (Eastlea)
Emerald Hill Children's Home
Northcot Children's Home

Old People's Homes

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 Society for the Destitute Aged
Waterfalls
Bumhudzo Old People's Home
Salvation Army Old People's Home (Braeside)
Athol Evans
Dorothy Duncan
Nazareth Home for the Aged

b) MASHONALND WEST PROVINCE

Children's Homes

Vimbainesu Children’s Home

Old People's Homes

Kadoma Old People's Home

Chengetanai Old People's Home

c) MANICALAND PROVINCE

Children's Homes

Chirinda Orphanage
Chitenderano Orphanage
Bonda Orphanage
R G Mhlanga Orphanage
Fairfield Orphanage
Forward In Faith
Sacred Heart
Mt Mellay
Hot Bag

Old People's Homes

Chitenderano Old People's Home

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 Zororai Old People's Home
Zimbabwe New Hope Home
Chengetanai Old People's Home

d) MASVINGO PROVINCE

Children's Home

Alpha Cottages Children’s Home

Old People's Homes

Mucheke Old People's Home

John Mutikizizi Old People's Home
Ngomahuru Resettlement

e) MASHONALAND EAST PROVINCE

Children's Homes

Marondera Child Care Society

Shirley Cripps Children’s Home
Borrowdale Trust
Marondera Children’s Home
Kukura Neshungu Home for the Handicapped and Mentally Retarded Children
Mother of Peace

Old People's Home

Ida Wokwako Old Peoples Home

f) MATEBELELAND SOUTH PROVINCE

Children's Home

White Water Children’s Home

Old People's Homes

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 Indlu Yokukhanya
Esigodini Old People’s Home
Umzingwane Old Age Association

g) MASHONALAND CENTRAL PROVINCE

Children's Homes

SOS Children’s Village

Montogomery Heights
Ponesai Vanhu
Mazoe River Bridge Centre

Old People's Homes

NONE

h) MATEBELELAND NORTH PROVINCE

Children's Homes

Thembiso Children’s Home

Queen Elizabeth Children’s Home
Emthunzini Children’s Home
K.G. VI Children’s Home
Sir Humphrey Gibbs
SIbantu Banye Children’s Home
Simanyane Children’s Home
St Francis
Khaya Elihle Children’s Home
SOS Children’s Home

Old People's Homes

Dete Old People’s Home

Chinotimba Old People’s Home

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 Entembeni Old People’s Home
Ekuphumuleni Old People’s Home
Bottle Block

I) MIDLANDS PROVINCE

Children's Homes

Maryward Children’s Home

Midlands Children’s Home
St Agnes Children’s Home
Driefontein Children’s Home

Old People's Homes

Batanai Old People’s Home

Rugare Old People’s Home
Boogie Trust
Huis Vergesig

N.B. To be eligible for deductions, the donor must prove that the organization holds a
registration certificate issued by the Ministry of Public Service, Labour and Social Welfare.
Employers should confirm with the provincial offices of the Social Welfare Department if in
doubt.

FDS FORMS

The forms listed below are available for use(The samples of the forms are attached)

F.D.S. 1 – To be completed by employees who would have incurred medical

expenses on Medical Aid or not and forwarded to staffing office
F.D.S. 2 – To be completed by staffing officers in respect of medical aid shortfalls and
forwarded to the Salary Service Bureau (for civil servants only) or Salaries Sections
F.D.S. 3 - – To be completed by staffing officers in respect of private medical aid
contributions and forwarded to the Salary Service Bureau (for civil servants only) or
Salaries Sections

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F.D.S. 4 – To be completed by employees in respect of the employees’ allowable
deductions and forwarded to the Employer
F.D.S. 5 – For summary of allowable deductions claims for all employees .To be
completed by the Personnel or Staffing Officer
F.D.S. 6 – This form is a tax deduction directive and is issued by ZIMRA only on
application.
REV 1--- Used by new employer to complete information used for registration

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REGIONAL OFFICES

REGION 1 REGION 2 REGION 3

Regional Manager Regional Manager Regional Manager

Harare Bulawayo Masvingo

3rd Floor, Kurima House Block C ZIMRE Centre

89 Nelson Mandela Ave. Mhlahlandlela Building Cnr. Hughes Street/Simon Mazorodze

Road
Between 3rd and 4th Street Bulawayo
P.O. Box 828
P.O. Box 4630 P.O. Box 601, Bulawayo
Masvingo
Harare Tel: 09883748
Tel:039 262 598
Tel.: 795720-49 Fax: 0968854
Fax 039 262 064
Fax: 791412

Harare Port Bulawayo Port Gweru

7rd Floor, Kurima House Customs House Government Composite Office

89 Nelson Mandela Ave. Cnr.Fort Street/8th Avenue 10th street

Between 3rd and 4th Street P.O. Box 599 P.O.Box 350

P.O. Box CY 78, Causeway Bulawayo Gweru

Harare Tel;0970211-5 Tel:054 222821

Tel.: 798880/6 Fax: 0970699 Fax: 054 223989

Fax: 798598

Harare Airport Bulawayo Operations Mutare

P.O.Box AP 60, Harare Mhlahlandlela Building ZIMRE Centre

Tel:575395 P.O. Box 601 109, Herbert Chitepo Street

Fax:575020 Bulawayo P.O.Box 890, Mutare

Tel: 0970161-2 Tel: 020 64332

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 Fax: 0969492 Fax: 020 64371

Chirundu Border Post Beitbridge Border Post Kwekwe

P.Bag 6, Chirundu P. Bag 5746 35-cnr 4th Street/3rd Avenue

Tel: 0637-616 Beitbridge P.Bag 8146, Kwekwe

Fax: 0637-646 Tel: 08622529 Tel; 055 24288

Fax 0862258 Fax: 055 24289

Kariba Border Post Plumtree Border Post Forbes Border Post

P.O Box 97, Kariba P.O.Box 7, Plumtree P.O.Box 90, Mutare

Tel: 0612355 Tel 019 2561-4 Tel: 020 63003/67532

Fax: 0612355 Fax: 019 2565 Fax: 020 66196

Nyamapanda Border Post Victoria Falls Border Post Mt. Selinda Border Post

P. Bag 510 P. Bag 5917, Victoria Falls P. Bag 2062, Chipinge

Mutoko Tel: 013 44322 Tel: 027 4511-2

Tel: 072 2504 Fax: 013 44321 Fax: 0274513

Fax: 072 2569

Kanyemba Border Post Kazungula Border Post Chiredzi

(Please contact Nyamapanda Office) c/o P.Bag 5917 609, Baobab Road

Victoria Falls P.O. Box 208, Chiredzi

Tel: 013 4776/01342330 Tel; 013 2505

Fax: 013 44321 Fax: 013 5144

To contact ZIMRA:
Visit our website : www. zimra.co.zw
Follow us on Twitter : @Zimra_11
Like us on Facebook : www.facebook.com/ZIMRA.11
Send us an e-mail : pr@zimra.co.zw
Call us (Head Office) : 04 –758891/5; 790813; 790814; 781345; 751624;
752731;

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