Lezé Felton
WHATS New in Paymaster
From the Team
December 2022
Zimbabwe - Finance Act 2022 Update
Following the 2022 Mid-Term Budget and Economic Review & Supplementary Budget Speech, after much delay, the Finance Act, 2022 Act No. 8 of 2022 brings the following amendments into effect for the 2022 tax year:
- These changes are applicable to the ZWL currency only.
- Update in the tax tables for ZWL (for the period 1 August to 31 December 2022)
- Change in bonus exemption threshold to ZWL 500 000.00 effective 01 November 2022
- Change in elderly, blind person’s and mentally or physically disabled persons credit to ZWL 450 000.00
- Change in ZWL determination table for motor vehicle fringe benefit
- Change in retrenchment exemption threshold: where the package is in ZWL, the exempt portion is the greater of ZWL 5 000 000.00 or one third of the package up to a maximum of ZWL 18 750 000.00
- Change in pension allowable limit to ZWL 1 500 000.00
Due to multiple interpretations on the effective dates on rates, thresholds, credits and the allowable deduction limit, customers will have the option to backdate these items manually.
Click here for the Finance Act 2022.
Summary of Changes
Personal Income Tax Tables:
The ZWL Personal Income Tax Tables have already been updated effective 01 August 2022:
Bonus Tax Free Threshold
The tax free exemption threshold effective for the tax year starting 01 January 2022:
Tax Credits
The ZWL Tax credit amounts are as follows:
Motor Vehicle Fringe Benefit
The ZWL Motor Vehicle fringe benefit values have been updated as follows:
Taxation of Retrenchment Package
The ZWL Severance pay component values has been updated as follows:
Pension Allowable
The ZWL Pension allowable used to determine the NSSA and Retirement allowable has been updated as follows:
Paymaster Impact
- The ZWL updated rates have been implemented on the system.
- All Zimbabwean customers are on a MTD Tax calculation method, based on the Mid tax year changes and the split tax year for 2022.
- Please note that there are multiple interpretations of the effective dates on the new limits, customer may wish to back date the new limits on the new note components provided for the tax credits and retirement allowable relief. The adjustment component will add and not override the existing note component for the relevant reliefs:
1. Disability Relief Disabled Adjustment
2. Mentally / Physically Child Disabled Relief Adjustment
3. Old Age Relief Adjustment
4. NSSA and RETIRE Retirement Allowable Adjustment
- A new note component called Mentally / Physically Disabled Child Relief has been created to reflect the Tax credit on the payslip which was previously only included in the Total Relief Note component.
- The Bonus tax free limit will automatically be backdated and recalculated based on the new exemption threshold. If there is no Bonus paid in December, the Excess Taxable Bonus note component will automatically recalculate and update the taxable income.
- The customer may also manually calculate PAYE refunds on the PAYE Adjustment component for Severance pay if the employee has no payslip for the December payroll.
- The deploy is scheduled for this weekend, please view the Release Notes on Monday 19 December 2022 for confirmation on task 49671. The December payrolls will not be automatically recalculated. Customers must navigate to the Config > Force Company Recalculation button to affect the changes for December payroll.
- If the December payroll is already closed, a post run may be set up after the December mainrun for a recalculation to happen. Please note that depending on the employee’s scenario, the tax credit adjustment components must be captured, but the Bonus tax free exemption will automatically recalculate.
- No other statutory changes have been announced.
From the Team
December 2022
Ivory Coast - IGR Tax Table Enhancement
The following enhancement has been made to the IGR (Impôt général sur le revenu) tax tables. This change is required due to the monthly tax tables which were previously adopted on the system.
Click here for Art 243-4° of the General Tax Code.
IGR Tax Table
Amended tables:
Previous tables:
Paymaster Impact
- The IGR tables have been amended on the system for December 2022.
- Kindly note a minimal increase or decrease in the IGR tax calculated depending on the taxable income brackets of the upper and lower income that has been updated.
- Customers should be on the YTD Averaging tax method to ensure the correct regularisation calculation is applied in December.
- The payrolls have not been automatically recalculated. Navigate to the Config > Force Company Recalculation button to effect these changes.
From the Team
December 2022
Burkina Faso - CNSS Ceiling Increase
Order No. 2022-067/MFPTPS/SG/DGPS has increased the Social Security (CNSS) contribution base ceiling to 800 000.00 francs per month or 9 600 000.00 francs per year effective 30 August 2022. This Order has only been made public in November. This ceiling was previously set at 600 000.00 francs per month or 7 200 000.00 francs per year (set by Order No 2003-012 of June 20, 2003).
The CNSS has confirmed that the contributions will have to be backdated to the effective date and supplementary declarations will most likely have to be submitted, however the details regarding this process must still be made available by the Social Security Fund (CNSS).
Click here for the official document.
Paymaster Impact
- The new ceiling has been implemented on the system effective 01 September 2022.
- Once the backdating procedure for the closed months payrolls and legislative reporting thereof is finalised, another Tax Alert will be issued.
- Burkina Faso is on a MTD Tax method. Customers may in the meantime utilise the CNSS Employé Adjustment (Tax code CNSSEEAR) component if they wish to backdate the new ceiling.
- All Burkina Faso payrolls have been recalculated.
- No other statutory changes have been announced.
From the Team
December 2022
Rwanda - Tax Tables update
The Rwanda Revenue Authority (RRA) has announced a new law establishing taxes on income no. 027/2022 of 20/10/2022 published in the official gazette no special of 28/10/2022.
Considering that the tax administration system has to be adapted to the changes provided for by the law regarding the new brackets on which tax computation will be based, RRA announced to all taxpayers that the provisions of this new law in article 56 related to the withholding tax on employment income will be applied from the month of November 2022, which tax period will be declared and paid not later than 15th December 2022.
Article 56 (Withholding tax on employment income) of the new law provides the rates that will be applied to employment income as per below:
- Table 1: First year following the date of commencement of this law
The above tax table is applicable from 1 November 2022 to 31 October 2023. Please note the tax table above is a monthly tax table.
- Table 2: From the second year after the commencement of this law
The above tax table is applicable from 1 November 2023. Please note the tax table above is a monthly tax table.
In Rwanda, a month-to-date tax method is utilised for withholding taxes on employment income.
Income from a casual laborer is subject to tax at the special rate of fifteen percent (15%).
However, in computing casual laborer’s tax, an income not exceeding sixty thousand Rwandan francs (60 000.00 FRW) per month is rated at zero percent (0%).
Article 57 of the new law states that an employer who is not the first employer shall withhold tax on employment income at the rate of thirty percent (30%).
Click here for the official document.
Tax Tables
The new thresholds and rates, as set out below, are applicable from 1 November 2022 to 31 October 2023.
Annual Tax
Paymaster Impact
- This change is effective for the period 1 November 2022 to 31 October 2023.
- All Rwanda payrolls have been recalculated.
- All customers must switch to the Non-cumulative tax method on the Basic Company Information screen from November 2022 going forward, to circumvent two tax tables in one tax year.
- Please note that the Average tax method will be removed in the new tax year (January 2023).
From the Team
December 2022
Ghana - SSNIT contribution calculations
As per the changes in the DT0107a report, there was a requirement on pension to carry the excess contributions calculated on Tier 1 and Tier 2, to Tier 3.
Enhancements have been made to cater for this. Please refer to the sections below for more information.
Enhancements
The following enhancements have been made to the SSNIT contribution calculations:
- The monthly limit of 35 000.00 will be applied to the SSNIT Tier 2 contributions (tax codes SSNITT2EE and SSNITT2ER). Previously the maximum limit was only applied to the SSNIT Tier 1 contributions (tax codes SSNITT1EE and SSNITT1ER) and the excess on SSNIT Tier 2 contributions was automatically allocated to SSNIT Tier 2.
- All employee contributions to Tier 1, Tier 2, and Tier 3 will be taken into account when calculating the allowable deduction (up to the limit). Customers have the choice to include the Tier 3 company contributions (tax code 9999) as well, as allowable deductions. In order to do so, they need to override tax code 9999 to tax code PROV. All Tier 3 contributions processed against tax code PROV will be taken into account when calculating the allowable deduction for Tier 3, up to a maximum of 16.5% of Basic Salary. This amount will display as a note component: SSNIT Tier 3 Allowable (tax code PROVALL).
- A combined allowable limit of 18.5% of the Basic Salary has been implemented for the SSNIT Tier 1 and Tier 2 employee contributions (tax codes SSNITT1EE, SSNITT2EE, SSNITEE, SSNITT1EEA, and SSNITT2EEA). This amount will display as a note component: SSNIT Tier 1 and 2 Allowable (tax code SSNITALL).
- If the Basic Salary (tax code SALARY) is greater than the cap of 35 000.00 per month, customers can allocate the SSNIT Tier 1 and Tier 2 excess by selecting one of the relevant excess options from the SSNIT Excess dropdown list on the Basic Profile screen (this can be done via Bulk Actions):
- If Tier 1 excess to Tier 2 is selected, the excess contributions of SSNIT Tier 1 will be remitted to SSNIT Tier 2.
- If Tier 1 excess to Tier 3 is selected, the excess contributions of SSNIT Tier 1 will be remitted to SSNIT Tier 3.
- If Tier 2 excess to Tier 2 is selected, the excess contributions of SSNIT Tier 2 will be remitted to SSNIT Tier 2.
- If Tier 2 excess to Tier 3 is selected, the excess contributions of SSNIT Tier 2 will be remitted to SSNIT Tier 3.
- If Tier 1 and Tier 2 excess to Tier 2 is selected, the excess contributions of SSNIT Tier 1 and Tier 2 will be remitted to SSNIT Tier 2.
- If Tier 1 and Tier 2 excess to Tier 3 is selected, the excess contributions of SSNIT Tier 1 and Tier 2 will be remitted to SSNIT Tier 3.
- If Tier 1 to Tier 2 and Tier 2 to Tier 3 is selected, the excess contributions of SSNIT Tier 1 will be remitted to Tier 2, and the excess contributions of SSNIT Tier 2 will be remitted to Tier 3.
- If Tier 1 to Tier 3 and Tier 2 to Tier 2 is selected, the excess contributions of SSNIT Tier 1 will be remitted to Tier 3, and the excess contributions of SSNIT Tier 2 will be remitted to Tier 2.
- If No excess is selected, no excess will be carried over for SSNIT Tier 1 and Tier 2. These contributions will be capped at the maximum pensionable salary of 35 000.00.
- If no option is selected, no excess will be carried over for SSNIT Tier 1 and Tier 2. These contributions will be capped at the maximum of pensionable salary of 35 000.00.
Paymaster Impact
- All Ghana payrolls will be recalculated.
- The following default options will be applied for minimal disruption:
• For all Ghana employees without the SSNIT Excess Income Indicator note component, the default SSNIT Excess option will be Tier 2 excess to Tier 2. As before, the excess of SSNIT Tier 2 will be remitted to SSNIT Tier 2.
• For all Ghana employees with the SSNIT Excess Income Indicator note component, the default SSNIT Excess option will be Tier 1 and Tier 2 excess to Tier 2. As before, the excess of SSNIT Tier 1, as well as the excess of Tier 2, will be allocated to SSNIT Tier 2. - It will be the customer’s responsibility to validate all SSNIT calculations and to change the default option if necessary. This can be done via Bulk Actions.
- Customers who are manually calculating the excess remitted to Tier 3, can now select the relevant option on the employee’s Basic Profile. This can be done via Bulk Actions. Take note that SSNIT Tier 1 and Tier 2 excess can only be remitted to SSNIT Tier 3 if tax code PROV already exists on the payslip. If not, an error message will display: “To remit excess to Tier 3, please advise Tier 3 contributions”.
- Excess remitted to Tier 3 will always display on the Excess to Tier 3 Employee (tax code PROV) and Excess to Tier 3 Employer (tax code 9999) components.
- The following note components will be inactive from 1 November 2022: SSNIT Excess Income Indicator, Tier 1 Excess Employee Amount and Tier 1 Excess Employer Amount.
- Customers can access the Calculation Breakdown to view a month-to-date breakdown of remitted Tier 1 and Tier 2 excess (under Additional Information):
Add comment