Payroll Year End
Every company registered in Zimbabwe has to complete a statutory return to the Zimbabwe Revenue Authority (Zimra). This return includes the full details on each of your employees remuneration and the relevant amounts that were withheld. The return is called the Income Tax Form – 16 (ITF-16) and must be completed for each employee that a company employs. The due date for this return this year is 30 January, 2021. There are several things that be done before a return can be completed and we have listed them below. The simplest way to complete your year-end is to do your monthly payroll through Adaski and contact one of our support staff for any assistance.
What is your Year-End?
The year-end we are referring to is a statutory return to Zimra, the ITF-16 that is due 30 days after the end of every year. At the end of each year employers should reconcile their PAYE, NSSA, NEC and any other payroll obligations. They should ensure the correct figures were deducted in preparation for submission of the return. The employer should make final adjustments to all calculations taking into account the total income, deductions and credits to which the employer is entitled.
- Correct Employee Figures
The first requirement is to make sure that all your employee figures are correct and each tax obligation has been met over the past year. This is automatically stored within Adaski for those that have been using it for their monthly Pay-Run.
The ITF16 must have all the types of remuneration, deductions, and credits for the year for the employee. It is a return for employment income which is based on remuneration received and accrued in 2020. There is no standard layout for this return, but Zimra requires at least the following information: Employee number, National Registration number of employees, First name, Surname, Salary, Bonus, Gratuity, Other income earned, Pension deductions, Membership Subscriptions paid to business, trade, technical or professional association, Medical aid contributions, Medical expenses, PAYE paid.
For those using Adaski for their payroll, we generate a return with all this relevant information on it.
3. Two Tax Semesters
The 2020 year of assessment has two tax periods; January-July and August- December. Thus, separate ITF16 returns must be submitted for the two periods.
4. Two Currencies
The returns for the two periods are submitted in:
- Zimbabwe Dollars for remuneration received and accrued in Zimbabwe Dollars; and
- Foreign currency for remuneration received or accrued or deemed received or accrued in foreign currency for the purposes of determination of PAYE.
For those employees that have received their remuneration in a mixture of local and foreign currencies, the calculation is quite simple, but highly dependent on several details. Please contact our support staff for personalized assistance if this is the case.
5. Sending your return to Zimra
Zimra provides several email addresses in their blog post here which allow you to submit your year end returns.
Completing your Year-End routine in Adaski
Whilst these steps may sound complicated, Adaski makes it easy for you to complete your tax return quickly and simply. For steps on how to do your Year End within Adaski, open the tab “Year End” and click “year end procedure”. This will walk you through each step that is required for you to complete your year-end.
Following on from my earlier email about the Year End returns expected in to tomorrow by the end of business tomorrow, Saturday 30th January, 2021 I would like to list some of the procedures that you should follow for Year End
- Backup. This should be done to both your own computer as well as to an external hard drive or flash drive- ideally this should be done to a different flash drive to those used at the end of your normal pay periods
- Download the latest Version of our Adaski Payroll Software. If you have updated your software in the last 6 weeks you should be able to click on the Download button displayed at the top of your initial Adaski Menu. This normally takes about 20 seconds to complete
- Run the Check Semester Option in the Year End Drop down screen. This is particularly important if you did not update your software over the August time of the year when there were changes to the Financial system countrywide
- Compare Year to Date (YTD) Balances. This should be run for both semesters. The Figures displayed in the middle of the 3 columns shown on this screen are the ones that are used to produce your ITF 16 return and they should balance with those on the right which are the control totals from the range of pay periods. A few clients will, unfortunately, have imbalances with their Sundry Deductions in the Transaction Table column. These are not important for the Year End and can be ignored for the purposes of this exercise. If you have imbalances then please send me a backup to check out
- Call up Set Up Files / Company Setup / Company Parameter and change the setting on the bottom left of the screen labelled “Save PDF Files by Month” to Yes. This will then store any PDFs created according to the Pay Date set at the time
- Print a YTD Payroll Summary for each semester
- Create a PDF of the Complete Year to Date Totals. If you have paid in both currencies there are several different options and each outputs a files with a different, appropriate name. You can choose to print just the employees RTGS months; Just U$ and RTGS months; or “As Paid” months. If you choose the second you can ask for the amounts converted to US$ as would have been used in calculating PAYE for the semester. You can also choose a range of applicable months if you had split payments
- There are other reports that under the same Year End drop down menu that are useful to print like the Leave, Loans or Pension Reports.
- NSSA YTD P4 – you should create both a PDF and an Excel file for this layout and submit the latter to your Local NSSA office.
- Zimra ITF16. Make sure you have entered your Zimra Business Partner Number and Address in the Company Details Screen. Then, assuming the other details are correct on the ITF16 screen you can go ahead. If you are using different pay points for separate companies you will have to change the BP Number and range of Pay points before creating the files for each of them
- Print P6s. You should first create this PDF file and then print it off in triplicate – one for your records; one for the employee; and, a spare one for when they complain that they have misplaced the first one!
- Backup to a different place.
- Call us for any assistance you might need or if you want one of our staff to run the Year End for you
Remember that we are open for business Saturday 30th January, 2021.
Contact our support team today on 0242 782 720 to assist you if you have any difficulties.