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Employee Tax

Article:

Employees Tax

19 April 2016

Tax year runs from 1 March – 28/29 February.

Employers report payroll information upon submission of the Annual Pay As You Earn (PAYE) Reconciliation which is due on 30 March (30 days after year end). There are no penalties or interest levied for the late submission of the PAYE reconciliation; however, this will need to be accounted for to remain in good standing with Inland Revenue.

Employers withhold employees’ tax and pay the amount withheld to Inland Revenue on a monthly basis. Employee Remittances forms (PAYE returns) and relevant payments should be submitted on the 20th of each month following the month in which the PAYE was withheld. Failure of payment will lead to penalties of 10% per month and interest of 20% per annum, compounded daily.

Workplace or group pension schemes are generally compulsory as a condition of employment. Contribution rates will be stipulated in the Fund rules.

The Maternity Sick and Death (MSD) benefits Fund is compulsory for all employees earning a basic wage in Namibia. Contributions are calculated as 1.8% of the employee’s basic wage shared on a 50/50 basis by the employee and employer (0.9% each). The minimum monthly contribution at 0.9% by members is N$2.70 and the maximum contribution by members is N$81.00.

All employers who employ one or more employees are required to complete a form of registration and to pay annual assessments (which are determined by the Social Security Commission) to the Accident Fund in terms of the Employee Compensation Act. Specifically excluded, are employees earning more than N$81,300 per annum.

Benefits and Expenses are reported on submission of the annual income tax remittance form per employee, together with the relevant supporting documentation. This is due by 30th June annually.

The onus is on the employee to remain responsible for accounting for business-related expenditure, which may be claimed from certain allowances granted. It is best practice for employers to also have relevant records of such expenses for their ease of reference.

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