The minister of finance of Zimbabwe has delivered the 2023/2024 budget speech on 30 November 2023.
The following changes have been proposed during the budget speech:
Bonus exemption:
- The tax-free ZWL bonus threshold is increased from ZWL500 000 to ZWL7 500 000.
This is effective from 1 November 2023.
Other proposed changes:
- The monthly tax-free threshold is increased to ZWL750 000 (ZWL9 000 000 per annum).
- The highest tax bracket will be applicable to annual income exceeding ZWL270 000 000 (ZWL22 500 000 per month).
The proposed effective date for these measures is 1 January 2024.
System changes on Sage Business Cloud Payroll Professional:
- A new tax file for Zimbabwe will be deployed during the evening of 11 December 2023, for the bonus exemption changes. All Zimbabwe tax country users have been emailed with steps to complete, prior to the deployment .
- For the proposed tax changes effective January 2024, we await the new tales to be published, and the updated tax file for these changes is scheduled mid-January 2024 (subject to publication).
Contents of email sent to users:
Dear Sage Business Cloud Payroll Professional user,
Please take note of the Important information below
New tax tables will be deployed on 11/12/2023 at 20:00 for Zimbabwe
The changes is affecting the tax free bonus portion.
(Note that the US Dollar tax tables remain unchanged)
All changes will be applied in the current pay period and will affect Net Salaries.
- The Bonus exemption is applicable from 1 November 2023
Make a backup of the company before the deployment on Monday evening
Options on how to handle the Bonus Exemption limit and actions that must be taken before the deployment:
Option 1
(Assuming that employees were terminated in July and reinstated in August with initial new Tax Tables)
The bonus exemption of 7 500 000.00 applies for the entire period August to December on the bonus amount. No actions are required as this is the default system calculation. Also note that the PAYE for bonuses exceeding the previous limit of 5 00 000.00 paid before 1 November 2023 will now recalculate.
Option 2
For an annual bonus amount paid to an employee before 1 November 2023, the previous limit of 500 000.00 applies. Any annual bonus amount paid to an employee in November or December 2023, the full 7 500 000 exemption applies, the exemption for the period August to December 2023 is then 8 000 000.
To apply this option on the system, you must terminate the current record of the employee with a termination date of 31 October 2023 and then load the employee again as a new employee with a Tax Year start date of 1 November 20233. If the company is already in November, we would suggest that you restore a backup of October to correct the Year-to-date values of the employee.
This will ensure that the employee receives the full 7 500 000 exemption on the November and December bonus in addition to the 500 000.00 exemption limit on the previous bonus amounts.