As of 2025, the Zimbabwe Revenue Authority (ZIMRA) has implemented significant updates to the country’s tax regulations, impacting both employers and employees. These changes encompass income tax brackets, statutory deductions, and compliance requirements. Below is a comprehensive guide to navigating these updates of the income tax and statutory deductions.
ZIMRA: Role and Responsibilities
ZIMRA is the national body responsible for assessing, collecting, and accounting for revenue on behalf of the state. Its functions include administering taxes such as Income Tax, VAT, Customs Duties, and PAYE, as well as enforcing trade regulations and advising the government on fiscal matters.
2025 Income Tax Brackets (Local Currency – ZiG)
Effective January 1, 2025, the Finance (No. 2) Act of 2024 introduced revised income tax thresholds and rates in Zimbabwean dollars (ZiG):
| Annual Income (ZiG) | Tax Rate | Cumulative Tax on Threshold |
| 0 – 33,600 | 0% | 0 |
| 33,600.01 – 100,800 | 20% | 0 |
| 100,800.01 – 336,000 | 25% | 13,440 |
| 336,000.01 – 672,000 | 30% | 72,240 |
| 672,000.01 – 1,008,000 | 35% | 173,040 |
| 1,008,000.01 and above | 40% | 290,640 |
The monthly tax-free threshold is now ZiG 2,800, aligning with the exemption of the first US$100 of employee earnings under current legislation.
USD Income Tax Brackets
For employees earning in U.S. dollars, the tax brackets remain unchanged in 2025. Employers should refer to the existing USD tax tables provided by ZIMRA for accurate calculations.
PAYE and AIDS Levy
Employers are mandated to deduct Pay As You Earn (PAYE) tax from employees’ remuneration and remit it to ZIMRA by the 10th of the following month. Additionally, a 3% AIDS Levy is applied to the PAYE amount.
Tax Credits and Allowable Deductions
Employees may be eligible for various tax credits and deductions, including:
- Elderly Persons’ Credit: Available to individuals aged 55 and above.
- Blind Persons’ Credit: Applicable to visually impaired individuals.
- Disabled Persons’ Credit: For individuals with physical or mental disabilities.
- Medical Expenses Credit: Covers 50% of medical aid contributions and medical expense shortfalls for the taxpayer, spouse, and minor children.
The total amount of credits is limited to the total income tax chargeable to a taxpayer; no refunds are provided when credits exceed the tax due.
National Social Security Authority (NSSA) Contributions
As of June 1, 2024, the maximum monthly earnings subject to NSSA contributions are USD 700. Both employers and employees contribute 4.5% each, totaling 9%. Contributions can also be made in ZiG at the prevailing official exchange rate.
Taxable Benefits and Allowances
Certain non-cash benefits provided by employers are considered taxable:
- Company Vehicles: The taxable benefit is determined based on the engine capacity of the vehicle.
- Housing: If an employer provides accommodation at below-market rates, the difference is taxable.
- School Fees: Employer-paid school fees for employees’ children are taxable.
- Data and Airtime: Provision of data and airtime for personal use is deemed a taxable benefit, valued at 30% of the cost to the employer.
New Taxes Introduced in 2025
The 2025 national budget introduced several new taxes:
- Fast Food Tax: 0.5% tax on the sales value of fast food items.
- Betting Tax: 10% withholding tax on gross winnings from sports betting.
- Plastic Bag Tax: 20% tax on the sale value of plastic carrier bags.
- Rental Income Tax: 25% tax on rental income from properties converted from residential to business use.
Compliance and Filing
- PAYE Returns: Employers must submit PAYE returns through ZIMRA’s Self-Service Portal by the 10th of each month.
- Record-Keeping: Employers should maintain accurate records of all employee remuneration and benefits to ensure compliance.
Final Thoughts
Staying informed about the latest tax regulations is crucial for both employers and employees in Zimbabwe. Compliance ensures the smooth operation of businesses and contributes to the nation’s economic stability.
