Lezé Felton
WHATS New in Paymaster
Please read more on the new features and enhancements to the system for the week of 7 October 2022.
Click on the link for more information regarding:
Example
- Screen Conversion | Employee Qualifications
- South Africa Tax certificate enhancements
- South Africa UIF Declaration File | Display of transferred employees
- Zimbabwe Mid Year Finance Bill Amendment
Zimbabwe - Interest Rate on Company level
From the Team
October 2022
With the rapid changes in a complex economic climate, Paymaster has identified the necessity of flexibility when setting economic indicators on the payroll. Enhancements have been made which allow customers to maintain the interest rates used in the Loan Fringe Benefit calculation on low/no-interest loans. Paymaster will no longer maintain these rates.
Legislation
As per the Finance (No. 2) Act, 2020 (No. 10 of 2020), with effect from 01 January 2021 and if the loan is granted in Zimbabwean dollar, a benefit will arise if the amount of the loan exceeds ZWL 8 000.00 and the interest rate is less than 15%.
Paymaster Impact
Steps to follow when adding a fringe benefit loan for the first time:
- Step 1: Process the official interest rate (Config > Basic Settings > General Company > Custom Forms)
- Step 2: Add the Loan Deduction component to the payroll if not added already (Config > Payroll > Payroll Components)
- Step 3: Process the Loan Deduction details (Employee > Payroll Processing > Recurring Payroll Components)
- Step 4: Check the Loan Fringe Benefit calculation (Other Actions > Calculation Breakdown)
- Note: If the Loan Fringe Benefit should not calculate, activate the “Is this a non-fringe benefit loan?” field. Refer to the guidelines in the Legislation section to determine if a loan should result in a fringe benefit.
Steps to follow for employees with an existing FBLOAN component on the live payslip:
- Step 1: Process the official interest rate (Config > Basic Settings > General Company > Custom Forms)
- Step 2: Recalculate the live payslip.
- If no official interest rate is processed, existing FBLOAN components on the live payslip will result in a negative value.
Zimbabwe - Mid Year Finance Bill Amendment
Finance Bill (No. 9A) 2022 reflects the Finance Bill as finally passed by the National Assembly on Thursday 1st September, sent to the Senate on the same date and considered by the Senate on 6th and 7th September. The Senate passed the Bill but, at the request of the Minister of Finance and Economic Development, sent it back to the National Assembly with recommendations that Clauses 2 and 3 be brought into line with the changes to those clauses actually agreed to by the National Assembly.
Clauses 2 and 3 (Income and threshold and bands) proposed to increase both the threshold and the tax bands specifying the rates of income tax, with effect from 1st August 2022. MP’s rejected the Minister’s proposals as utterly inadequate to cope with inflation, and insisted that the amounts be increased. They suggested the threshold be raised from the Minister’s proposed threshold [a monthly income of ZWD 50 000] to ZWD 100 000 per month or even higher; the Minister eventually compromised on increasing the threshold to ZWD 75 000 per month. Proportional changes to the tax bands were agreed.
On 27th September, when the Senate resumed sitting, it duly considered the now twice-amended Bill, was satisfied that its recommended amendments had included and passed the Bill. The Bill is still with the Government Printer for reprinting prior to being submitted to the President for his assent and publication as an Act in the Government Gazette.
No changes were made to the USD Tax tables.
Click here to access the Consolidated Amendment Bill.
Summary of Amendment
Individual Taxation:
Effective from 1 August 2022, the monthly tax free threshold for employees has increased to ZWD 75 000.00.
The 40% marginal rate will be applicable to income above ZWD 1 000 000.00 per month.
The new thresholds and rates, as set out below, are applicable from 1 August to 31 December 2022.
Annual Tax Tables in ZWD:
No changes were made to the USD Tax Tables.
Paymaster Impact
- Paymaster has implemented the proposed changes in October 2022 and all Zimbabwe local payrolls were recalculated.
- Please note that these proposed changes are effective for the period 1 August 2022 to 31 December 2022.
- Manual Tax adjustments are required for the August and September periods.
- If no adjustment measures are taken for the period of August and September, the employees would need to file a tax return at the end of the tax year in order to rectify their taxes.
- Please note that the non-cumulative tax method will automatically be applied to all local payrolls to circumvent two tax tables in one tax year.
- From 1 January 2023, the tax method will automatically switch back to the tax method as selected on the Basic Company Information screen (Customer action: None).
- In the event where users prefer to remain on the previous rates, manual adjustments should be processed for October.
Paymaster Notice
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