What Counts as Taxable Income?
Taxable income in Zimbabwe is the total income a person or company earns from all sources, minus allowable deductions and exemptions, on which income tax is calculated. Understanding what is taxable helps you comply with ZIMRA requirements and plan your finances effectively.
Tax-Free Threshold 2026
The annual tax-free threshold for individuals in Zimbabwe is:
| Period | USD Amount | Notes |
|---|---|---|
| Annual | USD 1,200 | First USD 1,200 of annual income is tax-free |
| Monthly (PAYE) | USD 100 | First USD 100 per month is not taxed |
Income below this threshold is not subject to income tax, PAYE, or AIDS levy.
Types of Taxable Income
Employment Income
- Salary and wages — Basic pay in USD or ZiG
- Bonuses and commissions — Performance bonuses, sales commissions, 13th cheque
- Benefits in kind — Company car, housing, medical aid contributions by employer
- Allowances — Transport, housing, entertainment allowances
- Leave pay — Payment for accumulated leave
- Severance/retrenchment packages — Subject to special rules
Business Income
- Trading profits — Revenue minus allowable business expenses
- Professional fees — Income from professional services
- Farming income — Agricultural revenue (special rules apply)
- Rental income — Income from letting property
Investment Income
- Interest — Bank interest, loan interest received
- Dividends — Subject to withholding tax (usually final tax)
- Royalties — Intellectual property income
- Capital gains — Profit from sale of property or shares
Exempt Income (Not Taxed)
The following income is exempt from income tax in Zimbabwe:
| Exempt Income | Details |
|---|---|
| Tax-free threshold | First USD 1,200/year (USD 100/month) |
| Pension contributions | Contributions to ZIMRA-approved pension funds (deductible, not exempt) |
| Funeral assurance | Premiums up to prescribed limit |
| Disability pension | Certain disability pensions under Workers Compensation Act |
| Charity income | Income of registered charitable organisations |
| Educational institutions | Income of approved educational institutions |
| Diplomatic income | Income of accredited diplomats |
| NSSA benefits | National Social Security Authority benefits |
Allowable Deductions
You can reduce your taxable income by claiming these deductions:
- Pension fund contributions — To ZIMRA-approved funds
- NSSA contributions — Employee’s share
- Medical aid contributions — Employee’s share (capped)
- Funeral assurance premiums — Up to prescribed annual limit
- Approved donations — To registered charities (limited)
How to Calculate Your Taxable Income
| Step | Description | Example (USD) |
|---|---|---|
| 1 | Gross income (all sources) | $36,000 |
| 2 | Less: Exempt income | -$0 |
| 3 | Less: Pension contributions | -$1,800 |
| 4 | Less: NSSA contributions | -$420 |
| 5 | Less: Tax-free threshold | -$1,200 |
| 6 | Taxable income | $32,580 |
Apply the income tax tables to the taxable income to calculate the tax payable, then add 3% AIDS levy.
Use our calculator: Try the ZIMRA Income Tax Calculator to see your exact tax liability based on your salary.
Taxable Income for Companies
For companies, taxable income is calculated as:
- Gross revenue from trading activities
- Less: Allowable business expenses (salaries, rent, utilities, materials, etc.)
- Less: Capital allowances (depreciation on qualifying assets)
- Less: Losses carried forward from previous years
- = Taxable profit (taxed at 24% corporate tax rate + 3% AIDS levy = 24.72%)
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What is the tax-free threshold in Zimbabwe 2026?
The annual tax-free threshold is USD 1,200 (USD 100 per month). Income below this amount is not subject to income tax or PAYE.
What income is taxable in Zimbabwe?
Taxable income includes employment income, business profits, rental income, investment income, capital gains, and pension income above the tax-free threshold.
What income is exempt from tax?
Exempt income includes the first USD 1,200/year, certain disability pensions, NSSA benefits, income of registered charities, and diplomatic income.
How do I calculate my taxable income?
Start with gross income, subtract exempt income, pension contributions, NSSA contributions, and the tax-free threshold. The result is your taxable income.