Pay As You Earn (PAYE)

1. What is 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.

2. Main Characteristics

   1. 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%

   2. 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.

   3. 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.

   4. Solidarity Levy has been abolished as from July 2023.

   5. Workers receiving their pay daily after each day`s work are excluded from the operation of the PAYE system.

   6. 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%

   7. 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

   8. A non- citizen who is resident in Mauritius for Income Tax Purposes is required to submit an EDF to his employer in Mauritius.

   9. 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.

   10. 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:

       1. a spouse,

       2. a child under the age of 18; or

       3. 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

       4. a bedridden next of kin under his care.

       “Child” means:

       1. an unmarried child, stepchild or adopted child of a person;

       2. 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;

       3. 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:

       1. eligible to the carer’s allowance payable under the National Pensions Act; and

       2. under the care of that person

3. 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.

4. 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.

5. Cumulative PAYE System

   Under the cumulative PAYE system, the employer is required to follow the following steps to calculate the PAYE to be withheld in a month:

   1. Calculate the chargeable income from the month of July of the current income year up to the current month.

   2. 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.

   3. 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.

   4. 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.

   5. 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.

6. 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;

   1. by direct debit;

   2. 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.