How is Paye worked?

PAYE is calculated NOT on a monthly basis, but on Cumulative Amounts: See the Paye Detailed report on the main Reports page. This report can be exported to excel and it will give a yearly summary showing the accumulated figures that the tax is worked out on. You can always be sure Harvester is correct with tax. One can not simply put the gross for the current month into the ZRA tax calculator on their web site and see what the ZRA calculates unless you give them the whole year history since January. (If it's the first tax month ie January gross wages then the ZRA web site calculator is good to use) Hence it is called PAYE. Pay-As-You-Earn through the tax year. Harvester always works tax out correctly by the law and calculates it as PAYE should work. Harvester does not just look at the current month's gross. This benefits the employee and allows for legitimate tax credits etc to be applied. This following example is with a first tax bracket of K3000. (eg here is for year 2016 TAX BRACKET) Let's suggest an employee earns K2500 (gross taxable) Note that NO Napsa portion is allowed any more to reduce the Gross Taxable. In January he will pay NO tax, but if in February he earns K3500 he will still NOT pay tax because his cumulative-tax-bracket is only K6000.(K2500 + K3500) This is still not above the cumulative-tax-bracket. (2 Months BY K3000) If the employee earned K3500 gross taxable in January(month 1) and K3500 in February, then he will pay tax in both months because his cumulative-tax-bracket is K7000.(K3500 + K3500) So it is possible to pay NO tax even if an employee earns more than K3000 in the current month if the current month is not the first month in the tax year, which is January. eg: If I earn nothing in January, then in February I will need a gross income of above K6000 before I will pay tax. This means that even an amount of K5000 earned in the month of February will not attract tax. NB When an employee who is normally paying tax, starts on the online system, go to edit-employee and on the bottom of the screen look for: Taxable Income: Previous Employment - enter the gross cumulative taxable amount so far in the current tax year. Tax Deducted: Previous Employment - enter the gross cumulative actual tax paid so far in the current tax year. After saving then go and re submit to recalculate the employees payslip and then PAYE TAX will then reflect correctly.