Pay As You Earn (PAYE) is the system used in Zimbabwe for collecting income tax from employees’ salaries and wages. Under the PAYE system, employers are required to deduct income tax directly from employees’ earnings each month and remit it to the Zimbabwe Revenue Authority (ZIMRA).

This system ensures that income tax is collected in smaller, manageable amounts throughout the year, rather than in one lump sum at the end of the tax period. PAYE is a legal requirement for all employers in Zimbabwe who have employees on their payroll.

How PAYE Works

Each month, when an employer pays salaries or wages, they calculate the amount of tax due based on the PAYE tax bands and rates set by ZIMRA. The amount deducted depends on how much an employee earns, with higher earners paying a higher percentage of their income as tax.

Once the tax is deducted, the employer must remit it to ZIMRA by the 10th day of the following month using the prescribed forms or through the ZIMRA e-Services portal.

Components of PAYE Deductions

PAYE deductions typically include:

  1. Basic Income Tax: The main tax charged on earnings based on income brackets.
  2. AIDS Levy: A 3% levy calculated on the amount of income tax payable, used to fund national HIV/AIDS programs.
  3. Other Statutory Contributions: In some cases, additional deductions such as pension or social security contributions may also apply.

The combination of these deductions forms the total amount remitted to ZIMRA each month.

PAYE Responsibilities for Employers

Employers play a crucial role in ensuring PAYE compliance. Their main responsibilities include:

  • Registering for PAYE with ZIMRA before paying any salaries.
  • Calculating and deducting the correct PAYE amount from employees’ earnings.
  • Remitting the tax to ZIMRA on time every month.
  • Maintaining accurate payroll records for each employee.
  • Issuing payslips showing gross pay, deductions, and net pay.
  • Submitting annual returns (P6 and P12 forms) to ZIMRA, summarizing the year’s payroll details.

Failure to fulfill these responsibilities can lead to penalties, interest charges, or even prosecution for tax evasion.

PAYE Responsibilities for Employees

For employees, PAYE simplifies the tax process. Instead of filing large tax payments annually, tax is deducted automatically before they receive their salary. However, employees should still:

  • Check their payslips to confirm that correct deductions are made.
  • Understand their tax bracket and how it affects their net salary.
  • Keep records of their income and deductions, especially if applying for loans, mortgages, or tax refunds.

Employees earning additional income outside formal employment (such as freelance work or business activities) may still need to submit separate income tax returns.

How PAYE Is Calculated

ZIMRA uses a progressive tax system, meaning that tax rates increase with income. As of the latest rates, lower earners pay little or no tax, while higher earners are taxed at higher percentages.

For example:

  • The first portion of income (within the tax-free threshold) is not taxed.
  • Income above the threshold is taxed at increasing rates according to income brackets.
  • The AIDS levy (3%) is then added on top of the total income tax due.

Employers usually use ZIMRA’s official tax tables to calculate PAYE accurately each month.

Benefits of the PAYE System

The PAYE system provides advantages for both the government and workers:

For Employees:

  • Tax is deducted automatically, reducing the risk of large year-end tax bills.
  • Simplifies compliance—no need to make separate tax payments monthly.
  • Helps build accurate earnings records useful for credit or visa applications.

For Employers:

  • Ensures compliance with tax laws and prevents future penalties.
  • Builds trust with employees through transparent payroll management.
  • Strengthens credibility when applying for tax clearance certificates or tenders.

Consequences of Non-Compliance

Employers who fail to deduct or remit PAYE on time face serious consequences, including:

  • Penalties and interest for late payment or non-remittance.
  • Disqualification from ZIMRA Tax Clearance Certificates (ITF263).
  • Legal action or reputational damage to the business.

ZIMRA conducts regular audits to ensure that PAYE deductions and remittances are accurate and up to date.

How to Register for PAYE with ZIMRA

To comply with PAYE requirements, employers must register their business with ZIMRA. The registration process generally includes:

  1. Obtaining a Business Partner Number (BPN) from ZIMRA.
  2. Submitting company documents, such as the Certificate of Incorporation and CR14.
  3. Completing the PAYE registration form available on the ZIMRA e-Services portal.
  4. Receiving confirmation of registration and instructions for monthly submissions.

Once registered, employers must keep up with monthly remittances and annual returns.

Conclusion

PAYE (Pay As You Earn) is Zimbabwe’s system for collecting income tax directly from employees’ salaries. It ensures that taxes are paid regularly and fairly based on income levels. Employers are responsible for deducting and remitting the correct amounts to ZIMRA each month, while employees should understand how their income tax is calculated.

Staying compliant with PAYE regulations not only avoids penalties but also builds credibility for both individuals and businesses. In a professional, transparent economy like Zimbabwe’s, understanding and managing PAYE is an essential part of responsible employment and financial management.