Composition of Remuneration for PAYE

Different types of income/remuneration received or receivable by an employee are taxable?

“Remuneration”  means any amount of income which is paid or payable to any person by way of any salary, leave pay, allowance, wage, overtime pay, bonus, gratuity, commission, fee, emolument, pension, superannuation allowance, retiring allowance, stipend or commutation of a pension or an annuity, whether in cash or otherwise and whether or not in respect of services rendered.

A variety of advantages and benefits granted by an employer or on behalf of an employer to an employee, spouse or child are also taxable.

Advantage or benefit includes board, occupation of quarters or residence, or the use of furniture or motor vehicle. It also includes the use of or enjoyment of any other property whatsoever, corporeal or incorporeal, including a loan, an allowance, passage benefit and any other advantage or benefit whatsoever in lieu of or in the nature of remuneration as stated above.

The value for tax purposes of an advantage or benefit, other than a payment by way of an allowance, is determined as follows:

(i) In the case of the occupation or use of quarters, residence or furniture, by reference to its value to the employee; and

(ii) In the case of any other advantage or benefit, by reference to the cost to the employer

The following are some of the examples of the benefits/advantages normally granted to employees and how they should be taxed:

Data and Airtime for use at the home or outside work premises

With effect from 1 January 2022, the definition of advantage or benefit now includes the provision of data and airtime given by the employer to the employee for use at the home or outside work premises. The deemed benefit is pegged at 30% of the cost to the employer.

Note: There is no deemed benefit if the employer proves to the Commissioner that data and airtime was all used for the purposes of business. Records pertaining to business transactions should be kept by the employer in order for the benefit not to be taxed. The primary record to be maintained shall be the Call Log Statement provided by the telecommunications service provider and such other records as the employer may maintain which show the usage of the data or airtime. The onus of proof will lie with the employer at all times.  

Use of motor vehicle

Engine capacity of motor vehicle

Deemed Cost (2019 Aug-Dec) ZWL

Deemed Cost (2020 Jan-Dec) ZWL

 Deemed Cost (2021) ZWL

Deemed Cost (January-July 2022)

Deemed  Cost (August-December 2022) ZWL

Deemed Cost (2023) ZWL

Up to 1500cc

$28 800

$54 000

$54 000

$81 000

$312 500

$312 500

Over 1500cc -2000cc

$34 400

$72 000

$72 000

$108 000

$415 000

$415 000

Over 2000cc -3000cc

$57 600

$108 000

$108 000

$162 000

$625 000

$625 000

Over 3000cc

$76 400

$144 000

$144 000

$216 000

$830 000

$830 000

Where an employee enjoys the use of a company vehicle or is allocated a company vehicle, the value of the benefit is determined according to the engine capacity of the vehicle. The deemed motor vehicle benefits are as follows

The deemed benefits for 2023 are as shown in table below.

Engine Capacity

Deemed ZWL Value

Deemed (USD) Value

Up to 1500cc

 312 500.00


Over 1500cc -2000cc

 415 000.00


Over 2000cc -3000cc

 625 000.00


Over 3000cc

 830 000.00


The deemed cost should be reduced proportionately where the period of use for the motor vehicle is less than 12 months.

Passage benefit

The benefit covers the cost borne by an employer on travels by an employee, spouse or children, which are not for the purposes of the employer’s business.  This includes the cost on taking up of employment or termination of employment where such costs have been previously offered to the employee.

Occupation of residence

A  benefit arises where the employer  grants the employee free accommodation or pays subsidized rentals or rental charges  which  are below the open market rates  applicable in that area.

Where the employee does not pay anything towards that accommodation , the whole amount - determined on the basis of the open market value -  is a benefit and subject to tax. Where an employee pays rentals less than the open market value of the house/accommodation, the difference between the amount paid and the market value constitutes a benefit. For example, if an employee occupies a house granted by the employer and valued at ZWL$1000 per month for which he/she pays ZWL$300 per month as rent, the benefit to be taxed in the employee’s hands would be ZWL$700 per month.

For valuation of quarters or residences other than those mentioned above, the respective employers may engage and agree with ZIMRA before determining the benefit.


School fees benefit

Where the employer pays school fees for the employee’s children, the cost of the fees payable becomes taxable in the hands of the employee. In cases where the employer is a school and the employee’s child is admitted/enrolled at the school without paying school fees or pays fees that are less than those paid by other students attending the same school, the foregone fees become  a taxable benefit  in the hands of the employee. In addition, any school fees discounts or reductions granted because of the employer-employee relationship become taxable benefits in the hands of the employee.

In the case of an employee who is a member of the teaching or non-teaching staff of a school, only half the amount or value of a school benefit shall be brought into his/her gross income and shall apply to only three of the children of the employee concerned.

Loan benefit

Where the employer gives a loan to the employee amounting to ZWL$8000 or more, a benefit will only arise where the interest rate charged on the loan is less than 15%. The prescribed interest rates for US$1000 or more loans are based on the London Inter–Bank Offered Rates (LIBOR) plus five percent 5%.  The LIBOR rates can be obtained here:

Allowances/ incentives

Allowances/incentives granted by the employer or on behalf of the employer to an employee, spouse or child form part of gross income and are liable to tax.

Performance Award

The tax-free threshold amount for employees bonus and performance awards was increased to ZWL$500,000 with effect from 1 November 2022 from ZWL$100,000. The tax-free threshold for those paid in USD remains at US$700.

Other benefits

There are a number of benefits that can be granted to employees. Clients are, therefore, advised to contact their nearest office for guidance on tax treatment if needed.


Calculation of Employees Tax : Pay As You Earn (PAYE)

The PAYE system is a method of paying Income Tax on remuneration. The employer is responsible for the calculation of the PAYE due from all forms of remuneration granted to the employees in terms of the 13th schedule of the Income Tax Act. The employee, on the other hand, is expected to furnish the employer with full information on other sources of income and proof of the allowable deductions and credits to be taken into account in determining PAYE liability.

The allowable deductions include pension contributions, subscriptions to professional, trade or technical associations and cost of tradesman’s tools, among others. Credits include mentally or physically disabled person’s credit, elderly person’s credit, blind person’s credit, medical expenses and cost of purchasing invalid appliances.

The rates of tax applicable each year are provided for in the Finance Act and the tax deduction tables can be obtained from the ZIMRA website. The tax table operates on an escalating scale basis (i.e. the higher the earnings, the greater the percentage of tax that should be paid by the employee). It should, however, be noted that when the earnings reach a certain amount, a flat rate of tax becomes applicable for any earnings above this level. Take all forms of remuneration should into account before subjecting the income to tax.

PAYE is calculated as follows:

  • Determine gross income for the day/week/month/year.
  • Deduct exempt income, for instance bonus as per limit in the Act, you get => Income
  • Deduct allowable deductions, e.g. pensions,  you get => Taxable Income
  • Apply the rate of tax applicable using RTGS or USD tax tables get => PAYE due before Aids Levy 

NB for salaries with both local and USD currency components use the USD tax tables.

  • Deduct tax credits e.g. medical, blind persons, disabled persons and elderly person’s credits (ZWL450,000.00 p.a or US$900.00 p.a effective 1 September 2022).
  • Apply the 3% Aids Levy on PAYE, you get => Total tax  to be remitted to ZIMRA
  • Complete PAYE returns (P2 forms) in full and submit through the ZIMRA e-services platform or e-taxes platform


Remission of PAYE to ZIMRA

Any employer who deducts PAYE from the employee’s remuneration is expected to remit the amount to ZIMRA on or before the 10th of the following month. All payments should be done on time through banks in the currency in which remuneration was earned, received or accrued.

Refer to the following link on ZIMRA website for ZIMRA Bank Accounts details: