What Is PAYE?
PAYE (Pay As You Earn) is the system by which employers deduct income tax directly from employees’ salaries and wages before payment and remit the collected tax to ZIMRA. The employer acts as a withholding agent for the government.
PAYE applies to all forms of employment income including:
- Basic salary and wages
- Bonuses and performance incentives
- Commissions
- Housing and transport allowances
- Leave pay and overtime
- Directors’ fees
- Benefits in kind (company car, free housing, etc.)
PAYE Tax Table 2026 (Monthly)
| Monthly Salary (USD) | Tax Rate | Tax on Band |
|---|---|---|
| $0 – $1,000 | 0% | $0 |
| $1,001 – $2,000 | 20% | Up to $200 |
| $2,001 – $3,000 | 25% | Up to $250 |
| $3,001 – $10,000 | 30% | Up to $2,100 |
| $10,001 – $20,000 | 35% | Up to $3,500 |
| $20,001+ | 40% | Varies |
Plus 3% AIDS levy on the total PAYE calculated.
Quick calculator: Use our Income Tax Calculator to instantly calculate PAYE for any salary amount.
PAYE Calculation Example
Employee earning $3,500/month:
| Band | Amount | Rate | Tax |
|---|---|---|---|
| $0 – $1,000 | $1,000 | 0% | $0 |
| $1,001 – $2,000 | $1,000 | 20% | $200 |
| $2,001 – $3,000 | $1,000 | 25% | $250 |
| $3,001 – $3,500 | $500 | 30% | $150 |
| Subtotal | $600 | ||
| AIDS Levy (3%) | $18 | ||
| Monthly PAYE | $618 | ||
Employee take-home: $3,500 − $618 = $2,882
Employer PAYE Obligations
- Register for PAYE with ZIMRA as soon as you hire your first employee
- Calculate PAYE on every payroll using the current tax tables
- Deduct PAYE from gross salary before paying the employee
- File the P2 return monthly on the TARMS portal
- Remit PAYE to ZIMRA by the 10th of the following month
- Issue ITC3 certificates to employees at year-end (showing total earnings and PAYE deducted)
- File the annual P16 reconciliation by 31 January of the following year
PAYE Filing Deadlines
| Obligation | Deadline | Form |
|---|---|---|
| Monthly PAYE return | 10th of following month | P2 |
| Monthly PAYE payment | 10th of following month | Electronic payment |
| Annual reconciliation | 31 January | P16 |
| Employee tax certificates | 31 January | ITC3 |
Penalty for late payment: Failure to remit PAYE by the 10th attracts a penalty of 100% of the tax due plus interest at LIBOR + 5%. Directors can face criminal prosecution for persistent non-compliance.
Employee Deductions That Reduce PAYE
- Pension fund contributions — Deducted before calculating PAYE
- NSSA contributions — National Social Security Authority payments
- Medical aid contributions — To registered medical aid societies
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Start Registration WhatsApp UsFrequently Asked Questions
What is PAYE in Zimbabwe?
PAYE (Pay As You Earn) is a system where employers deduct income tax from employee salaries and wages each month and remit it to ZIMRA. The employer acts as a tax collection agent on behalf of ZIMRA.
When is PAYE due to ZIMRA?
PAYE must be remitted to ZIMRA by the 10th of the month following the payroll period. For example, PAYE deducted in January must be paid by 10 February.
Do I need to register for PAYE?
Yes, every employer in Zimbabwe must register for PAYE with ZIMRA as soon as they hire their first employee. Registration is done through the TARMS portal or at any ZIMRA office.
What is the PAYE threshold in Zimbabwe?
The PAYE threshold matches the income tax-free amount: $1,000 per month ($12,000 per year). Employees earning below this amount have no PAYE deducted from their salary.
What happens if an employer fails to remit PAYE?
Failure to remit PAYE on time attracts a penalty of 100% of the tax due plus interest at LIBOR + 5%. The employer is personally liable. Directors can face criminal prosecution for persistent non-compliance.