Pay As You Earn (PAYE)
-
Pay As You Earn (PAYE) is a system whereby employers are required to withhold tax from the emoluments of employees chargeable to tax at the time the emoluments are received by or made available to the employees. The tax withheld is then remitted to the Mauritius Revenue Authority (MRA) every month.
-
-
The PAYE system operates on the pay for the current period at the time the emoluments are received or made available to the employee. Employers are thus required to withhold tax at the appropriate rates applicable on the income brackets; as shown in the table below, from the monthly emoluments of employees and remit same to the MRA either electronically or through a computer system approved by the Director General.
Annual Chargeable Income
Rate of Income tax
Annual Chargeable Income
Rate of Income tax
First Rs 390,000
0%
Next Rs 300,000
12%
Next Rs 40,000
2%
Next Rs 300,000
14%
Next Rs 40,000
4%
Next Rs 400,000
16%
Next Rs 60,000
6%
Next Rs 500,000
18%
Next Rs 60,000
8%
On the remainder
20%
Next Rs 300,000
10%
-
Employees have to furnish every year to their employer an Employee Declaration Form (EDF) claiming the reliefs, deductions and allowances to which they are entitled in an income year. An employee receiving emoluments from more than one employer can submit an EDF to only one employer.
-
The amount of tax to be withheld from the emoluments of each pay period is calculated on a cumulative basis by cumulating both the emoluments and total reliefs, deductions and allowances pertaining to the current and previous pay periods in the income year concerned.
-
Solidarity Levy has been abolished as from July 2023.
-
Workers receiving their pay daily after each day`s work are excluded from the operation of the PAYE system.
-
Employees drawing monthly emoluments not exceeding Rs 30,000 are not subject to PAYE except for the fees payable by a company to any of its directors; or by a statutory body to any member of its Board, Council, Commission or Committee. In such case PAYE is required to be withheld at the rate of 15%.unless the the director or board member makes a request to the company or the person responsible for the payment of the emoluments for PAYE to be withheld at the rate of 20%
-
A person deriving pension, annuity or similar payments below the IET threshold may request his employer / payer to withhold PAYE from such payments by completing the authorisation to deduct PAYE form available on MRA website on following link : https://www.mra.mu/download/PAYEAuthorisationForm.pdf
-
A non- citizen who is resident in Mauritius for Income Tax Purposes is required to submit an EDF to his employer in Mauritius.
-
A non-resident in receipt of emoluments, including pension, irrespective of the amount, is not entitled to any reliefs, deductions and allowances. His/her gross emoluments for any pay period shall represent his chargeable income for that pay period.
-
A non-resident citizen of Mauritius in receipt of any retirement pension is subject to PAYE at the applicable rate on the income bracket in which the chargeable income of that person falls.
"Dependent" means either:
-
a spouse,
-
a child under the age of 18; or
-
a child over the age of 18 and who is pursuing full-time education or training or who cannot earn a living because of a physical or mental disability; and
-
a bedridden next of kin under his care.
“Child” means:
-
an unmarried child, stepchild or adopted child of a person;
-
an unmarried child whose guardianship or custody is entrusted to the person by virtue of any other enactment or of an order of a court of competent jurisdiction;
-
an unmarried child placed in foster care of the person by virtue of an order of a court of competent jurisdiction.
"Bedridden next of kin", in respect of a person, means the bedridden father, mother, grandfather, grandmother, brother or sister of that person or of his spouse, provided the bedridden next of kin is:
-
eligible to the carer’s allowance payable under the National Pensions Act; and
-
under the care of that person
-
-
- Personal Reliefs & Deductions
Employees have to furnish every year to their employer an Employee Declaration Form (EDF) claiming the reliefs, deductions and allowances to which they are entitled in an income year.
Kindly click here for questions on EDF.
An employee may submit an EDF electronically to his employer through the MRA website.
An employer may download the EDF of his employees through the MRA website. -
Calculation and withholding of tax
Every employer should, at the time emoluments are received by or made available to his employees, withhold PAYE on emoluments provided that the emoluments exceed the total , reliefs, deductions and allowances. A tax rate of 0 percent is applicable on the first Rs 390,000 of chargeable income. The amount of tax to be withheld should be rounded down to nearest rupees.
-
Under the cumulative PAYE system, the employer is required to follow the following steps to calculate the PAYE to be withheld in a month:
-
Calculate the chargeable income from the month of July of the current income year up to the current month.
-
Calculate 1/13 of the total reliefs, deductions and allowancesclaimed by the employee in his EDF to determine the monthly , reliefs, deductions and allowances to which the employee is entitled.
-
Calculate the cumulative reliefs, deductions and allowances by multiplying the item at (II) above by the number of months considered at item (I) above. The month in which the statutory end of year bonus is paid is considered as the 13th month.
-
Apply tax as specified in the table under point 2 on the chargeable income which is arrived at by deducting the amount arrived at in item (III) above, from the amount arrived at in item (I) above. Any negative value is taken as zero.
-
Deduct the amount of PAYE already withheld for the previous months starting with the month of July of the current income year from the tax amount arrived at item (IV) above to obtain the amount of PAYE withheld for the current month. Any negative value is taken as zero.
-
- Remittance of PAYE withheld
The tax required to be withheld under PAYE should be remitted electronically through such computer system as the Director-General may approve;
-
by direct debit;
-
through such other means as the Director-General may approve;
and at the same time, submit a monthly PAYE return, electronically in respect of ALL employees whether PAYE has been withheld or not, , giving:
-
the full name;
-
the NIC number where the employee is a citizen of Mauritius or the identification number issued by the Passport and Immigration Office, where the employee is not a citizen of Mauritius;
-
Where a non-citizen is not entitled to a NCID, the Tax Account Number (TAN) should be inserted;
-
the salary, wages, overtime pay, leave pay and other allowances excluding travelling and end of year bonus; and
-
the amount of tax withheld.
Tax withheld by an employer under PAYE should be paid to the Director-General within 20 days from the end of the month in which the tax was withheld in such manner as may be prescribed. In case tax withheld is remitted electronically, it should be paid on or before the end of the month immediately following the month in which the tax is withheld.
Since the tax withheld from the emoluments of employees is held on behalf of the Government and is not subject to attachment in respect of a debt or liability of the employer, remittance of tax to the MRA should not be delayed for any reason whatsoever and should always be remitted by the due date.
-
NPF / NSF Contributions and Training Levy
-
Guide to Employers on Pension Contributions (NPF / NSF and Training Levy)
-
Contributions payable in respect of employees having attained retirement age
-
Obligation to pay contributions
Every month, every employer is required to submit to the Director-General of the Mauritius Revenue Authority (MRA) a statement giving the details of every employee who was employed during the preceding month and pay the amount of contributions in accordance with the National Pensions Act, National Savings Fund Act and Human Resource Development Act.
Contributions are payable as from the month in which an employee takes up employment whether on a part-time or full time basis and whether on probation or not.
No contribution is payable in respect of:
-
An employee who has not attained the age of 18;
-
An employee who has attained the final retirement age (70 years); and
-
A non-Mauritian citizen employee of an export manufacturing enterprise in respect of his first 2 years of employment.
-
-
-
NPF Contribution
Insured Person Employee share Employer share Government share Every prescribed employee in the Sugar Industry 3% 10.5% - Every other prescribed employee (higher rate) 5% 8.5% - An employee in domestic service or an agricultural worker whose remuneration from all his employers does not exceed Rs 3,000, is not required to pay the employee share of contribution which will be paid by the government. - 6% 3% Every other employee other than a public officer or an employee entitled to pension under pension law 3% 6% - Every self-employed or non-employed or prescribed person approved by Minister may contribute in multiples of Rs 5 not below Rs 200 and not exceeding Rs 1,135 for a month - - - -
NSF Contribution
Employee & Employer share of contributions are 1 % and 2.5% respectively
-
HRDC Training Levy
Every employer is required to pay levy at the rate of 1.5 % of the total basic wage or salary of its employees other than a household worker. For period from July 2019 to June 2020, an employer is required to pay levy at the rate of 1% for employees whose total basic wage or salary does not exceed Rs 10,000.
For periods from 1 July 2020 to 30 June 2021, every employer shall, in respect of every employee, pay a training levy of 1%.
-
-
Wages or salaries on which contributions & levy are payable
NPF and NSF are payable at the prescribed rate on an employee’s basic wage/salary. Basic wage/salary includes yearly salary compensation but excludes bonus and any other allowance paid in cash or given to the employee in kind.
The minimum and maximum basic wage or salary on which Contributions to the National Savings Fund (NSF) are payable as from 01 July 2024 are given in the table below:
MINIMUM WAGE
MAXIMUM WAGE
Pay Period
For Private Household employees
For other employees
For all employees
Daily
96
151
980
Weekly
575
905
5,879
Fortnightly
1,149
1,809
11,758
Half Monthly
1,245
1,960
12,738
Monthly
2,490
3,920
25,475
Levy is also applicable on the basic wage / salary of an employee. However, the above ceilings do not apply and the employer is required to calculate the levy payable on the full basic wage / salary payable.
-
Contributions payable in respect of employees having attained retirement age
For pay periods August 2018 onwards, an employee’s retirement age is 65 years and his final retirement age is 70 years.
For pay periods July 2018 and prior periods, the retirement age and final retirement age are based on the month in which the employee was born. (Click here for details)
-
NPF
Details Contribution Payable a.
Employee has reached retirement age and is not in receipt of Contributory Retirement Pension (CRP).
NPF contributions ( both employer & employee shares) are payable in respect of that employee until he/she elects to receive his Contributory Retirement Pension (CRP) or reaches final retirement age, whichever is the earlier.
b.
Employee has reached retirement age and receives Contributory Retirement Pension
NPF Contribution (employer share only) is payable in respect of that employee until he ceases to be employed or he reaches final retirement age, whichever is the earlier.
c.
Employee has reached Final Retirement Age
No NPF contribution is payable in respect of an employee who has attained final retirement age.
-
NSF
No NSF contributions are payable in respect of an employee who has reached retirement age whether or not the employee receives Contributory Retirement Pension (CRP).
-
LEVY
No Training Levy is payable in respect of an employee after he has attained final retirement age. Where an employee has not reached final retirement age, training Levy is payable whether or not the employee receives Contributory Retirement Pension (CRP).
-
-
Submission of Returns & Payment of contributions
-
Monthly return
Every employer is required to submit a monthly return electronically giving the details of each employee, whether or not contributions are payable. Both the return and payment should be made electronically and the due date is one month after the end of the month for which the contribution is payable.
The returns and payments for the months of May and November should be effected 2 days, excluding Saturdays and public holidays, before the end June and December each year, respectively.
-
Annual return
An individual employing a person in domestic service who has not submitted any monthly return in a financial year may submit an annual return and pay contribution on an annual basis. The last date for the submission of the return and payment of contributions is 31 July following the end of the financial year.
However, the employer is required to submit a quarterly statement for all their household employees in respect of each quarter of the financial year, at latest one month after the end of the quarter.
-
Contributions in respect of seamen
Where an employer employs a person who is a seaman and whose remuneration is not paid on a monthly basis, the due date for submission of return and payment of contribution is one month and 20 days after the end of the pay period for which the contribution is payable.
-
-
Direct Debit
Employers are required to use the Direct Debit facility put in place by the MRA in collaboration with the Bank of Mauritius for payment of contributions directly from their bank account when they are submitting their return electronically through MRA website. Employers should fill-in a PLACH Direct Debit Mandate Form downloadable from MRA website to avail themselves of such facility. The form duly filled-in, and signed by authorised signatories, should reach the MRA at least 15 days before the due date for payment.
-
-
Surcharge on late payment of contributions
Where an employer fails, within the prescribed time, to pay to the Director-General the whole or part of any contributions payable, he shall pay a surcharge at the rate of 5 % for each month or part of the month during which any contributions remained unpaid up to a maximum of 100%. No surcharge on NPF and NSF is applicable where it is less than Rs 50.
Where the unpaid contribution for NPF is less than Rs 120, no surcharge is applicable unless the percentage of the unpaid contribution to total contribution payable is greater than 10%.
-
Surcharge on late submission of returns
Where an employer other than a person who employs an employee in domestic service fails to submit return within the due date, he shall be liable:
-
in the case of a monthly return:
to a surcharge of 1 % of the total contributions payable for NPF up to a maximum of Rs 200, per day. The maximum surcharge applicable for a return is Rs 20,000 or the amount of contribution payable (i.e. 100%), whichever is the lesser. The minimum surcharge applicable is Rs 500 (i.e even for 1 day).
-
in the case of an annual return:
to a surcharge of Rs 500 per day. The minimum surcharge applicable is Rs 5,000 (i.e even for 1 day). The maximum surcharge applicable for a return is Rs 50,000.
-
-
New Employer
-
-
An employer means a person who employs one or more employees who work under a contract of service or apprenticeship whether written or oral. An employer includes a person employing part-time employees but excludes a self-employed person providing services.
-
For PAYE purposes, a person responsible for payment of emoluments is an employer and includes any person who acts as an agent of an employer and is responsible for the payment of emoluments to an employee or to a former employee on behalf of that employer e.g. an insurance company that pays pension on behalf of an employer under a superannuation fund.
-
-
Employer Registration Number (ERN)
-
Where a person applies to the Registrar of Businesses for the registration of a business and he indicates in the application form that he will have employee/s in the business, the MRA will automatically register that person as an employer for payment of social contributions / NSF contributions and PAYE, if any. The MRA will communicate to that person, his:
-
Employer Registration Number (ERN); and
-
password for filing of the monthly return;
-
-
An existing business which was not issued an ERN previously and which starts to employ workers; it will be automatically registered as an employer when it submits a social contributions, NSF contributions / PAYE return to remit the social contributions, NSF contributions / PAYE contributions. To file the social contributions, NSF contributions / PAYE return, it will have to use its ERN as user ID and the password issued to it by MRA for filing of contributions / tax returns.
-
An individual who employs workers in domestic service will be issued an ERN on submission of a social contributions / NSF contributions return. He will have to use his ERN as user ID and the password issued to it by MRA for filing of contributions/tax returns.
-
-
-
Every Employer is required to file a joint monthly social contributions, NSF contributions / PAYE return declaring the contributions payable in respect of its employees under the Social Contributions and Social Benefits Act 2021, National Savings Fund Act (NSF contributions), Training Levy under the Human Resource Development Act and PAYE tax deducted under Income Tax Act.
-
Following the enactment of the Workers’ Rights (Portable Retirement Gratuity Fund) (Amendment) Regulations 2020, employers are required to submit, as from the month of January 2022, a monthly PRGF return and effect payment in respect of PRGF contributions to the Director-General of the MRA. Both the return and the payment are required to be made electronically on or before the end of the month following that in respect of which the PRGF is payable.
-