Pay As You Earn (PAYE) is a method of collecting Income Tax in advance from employees on their earnings. Deduction is done by the employer when the payments are made. It could be weekly, fortnightly or monthly hence the name Pay As You Earn.
Who is eligible to operate PAYE?
Any employer who pays an employee in excess of K20, 000.00 per month or K240, 000.00 per year is liable to deduct PAYE and remit to MRA.
PAYE rates
With effect from 1st July 2013, the applicable rates for PAYE on a monthly basis are as follows:
• The first K20, 000. 00 at 0%
• The next K5, 000. 00 at 15%
The excess of K25, 000. 00 at 30%.
When should an employer register for operation of PAYE?
An employer who employs people whose earnings exceed K20, 000 per month or K240, 000 in a year is required to register for operation of PAYE.
Upon registration, MRA will supply the employer with registration forms (Form P1) where all the details concerning the employer and the appropriate number of employees who are eligible for PAYE are filled. An employer is required to register for PAYE within a period of 21 days after becoming an employer.
In case of changes, for example, an employee has resigned, such employer is required to communicate to MRA within 14 days upon making those changes.
Fixed Paye Calculator :Malawi Revenue Authority
No comments:
Post a Comment