FAQs for PAYE Employee

  1. What is PAYE?
  2. Who is an employee?
  3. Are all employees subject to PAYE?
  4. What are emoluments?
  5. What are fringe benefits?
  6. Are all emoluments taxable?
  7. How does PAYE operate?
  8. What happens if I receive payment of an arrears of salary?
  9. How does my employer know the deductions to which I am entitled?
  10. What happens if I do not furnish an EDF?
  11. What should I do if there is a change in my deductions during the year?
  12. What if I am employed for the first time?
  13. What if I take up a new employment?
  14. What if I have more than one employer at any one time?
  15. Should I submit an income tax return at the end of the income year?
  16. How will I know my emoluments and PAYE deductions for the year?
  17. How to obtain additional information on PAYE?

  1. What is PAYE?

    PAYE is a system whereby employers are required to deduct tax from the emoluments of their employees and to pay over the tax withheld to the Mauritius Revenue Authority every month.

  2. Who is an employee?

    A person who receives or is entitled to receive emoluments is an employee. Since emoluments include pension in relation to past employment, a person in receipt of such pension is treated as an employee.

  3. Are all employees subject to PAYE?

    No. An exempt person is not subject to PAYE. An exempt person means an employee whose emoluments do not exceed Rs 30,000 per month.

  4. What are emoluments?

    Emoluments mean any advantage in money or in money's worth which is salary, wages, leave pay, fee, overtime pay, perquisite, allowance, bonus, gratuity, commission or other reward or remuneration in respect of or in relation to the office or employment of an individual and includes fringe benefits.

    Emoluments also include superannuation, pension, retiring allowance, compensation for loss of office or other reward in respect of or in relation to a past employment or loss or reduction of future income.

  5. What are fringe benefits?

    A fringe benefit is any advantage in money's worth provided by an employer to an employee. It forms part of emoluments and is subject to PAYE.

    Fringe benefits include housing benefit, car benefit, tax benefit, interest free loan benefits, free meals to employees, full board and lodging to expatriates, personal expenses of the employee which are borne by his employer and any other advantage in money's worth.
    The tax on the emoluments of an employee which is borne by his employer constitutes an advantage to the employee and is referred to as tax benefit.

  6. Are all emoluments taxable?

    All emoluments are taxable except the following:

    1. Emoluments derived from the office of the President or Vice-President.

    2. Any rent allowance payable to a person appointed to an office in :

      • the Police Force;

      • the Fire Services;

      • the Forests Division of the Ministry of Agriculture and Natural Resources;

      • the Prisons and Industrial School Service; the Ministry of Fisheries;

      • the Department of Civil Aviation;

      • the Fire Unit of the Mauritius Marine Authority.

    3. Any housing allowance not exceeding Rs 100 per month payable by an employer to an employee under any enactment or by virtue of an award made under an enactment.

    4. Any transport allowance payable by an employer to an employee by virtue of the terms and conditions of service equivalent to :

      • the return bus fare between residence and place of work;

      • petrol allowance, commuted travelling allowance and travel grant payable by the Government of Mauritius and the local authority to their employees; or

      • the actual petrol or travelling allowance paid or 25% of the monthly basic salary up to a maximum of Rs 20,000, whichever is the lesser, provided that the employee makes use of a private car registered in his own name for attending duty and for the performance of the duties of his office or employment.

    5. Passage benefits provided under a contract of employment not exceeding 6% of the basic salary.

    6. The first Rs 2.5 million of the aggregate amount received:

      1. as lump sum by way of commutation of pension or by way of death gratuity or as consolidated compensation for death or injury, and paid :

        • by virtue of any enactment;

        • from a superannuation fund;

        • under a personal pension scheme approved by the Director-General;

      2. as lump sum under the National Savings Fund Act;

      3. by way of retiring allowance;

      4. by way of severance allowance determined in accordance with the Labour Act, on such conditions as may be prescribed.

      5. as compensation negotiated under section 70 (1)(i) and (ii) of Workers Rights Act.

    7. Any payment of foreign service allowance, reimbursement of the cost or payment of personal and private expenses including medical expenses, to homebased staff of overseas mission.

    8. Any advantage in money or in money's worth received as lump sum by an employee voluntarily terminating his contract of employment in the context of a factory closure pursuant to the Cane Planters and Millers Arbitration and Control Board Act or under the Voluntary Retirement Scheme under the Sugar Industry Efficiency Act  2001.

    9. Any benefit to an employee for a payment by his employer to provide a pension or retiring allowance for the employee or his dependents and which is an allowable deduction under Section 22 or 61, as the case may be.

    10. Any benefit to an employee for a payment by his employer to a scheme approved by the Director-General to provide against medical expenses for the employee or his dependents and which is an allowable deduction under Section 22 or 61, as the case may be.

    11. Emoluments of a non-citizen who holds office in Mauritius as an official of a Government other than the Government of Mauritius and is posted to Mauritius for that purpose.

    12. Any foreign service allowance payable under a contract of employment to staff of statutory bodies posted abroad, as may be approved by the Director-General.

    13. Any car allowance payable in lieu of duty exemption on a car, to a public officer, an officer of a local authority, or officer of a statutory body, whose terms and conditions of service are governed by the 2013 Report of the Pay Research Bureau

    14. Salaries and emoluments derived by an employee who is a citizen of Mauritius or who holds a permanent residence permit under the Immigration Act from his employment with the Liaison Office located in Mauritius, of the Bank referred to in the International Financial Organisations Act.

    15. Emoluments derived by a seafarer from his employment on a vessel registered in Mauritius or on a foreign vessel.

    16. Emoluments derived by an employee from his employment with a corporation licensed by the Financial Services Commission established under the Financial Services Act, provided that the employee manages an asset base of not less than USD 50 million and is issued with:

      (a) an Asset Manager Certificate;

      (b) a Fund Manager Certificate; or

      (c) an Asset and Fund Manager Certificate,

      on or after 1 September 2016, by the Financial Services Commission established under the Financial Services Act.

    17. The exemption shall be for a period of 10 income years as from the income year in which the employee was granted the certificate referred to in paragraph (1).

    18. An allowance not exceeding 15,000 rupees payable to an officer or employee who has been required to work on the frontline during the COVID-19 period where such allowance

      1. is payable by the Government; or

      2. is financed by the COVID-19 Solidarity Fund.

    19. Any monthly allowance paid by an employer to an employee equivalent to the amount payable by the employee as social contribution under section 3 of the Social Contribution and Social Benefits Act 2021.

  7. How does PAYE operate?

    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%

    		    

  8. What happens if I receive payment of an arrears of salary?

    Where arrears of emoluments earned in an income year are received by a person in the following or any subsequent income year, those emoluments are deemed to have been earned in the income year in which they are received and are subject to PAYE in the pay period in which they are paid.

  9. How does my employer know the deductions to which I am entitled?

    An employee who is affected by PAYE and wish to entitle for reliefs, deductions and allowances for an income year (1st July to 30th June) to be taken into account for the purpose of calculating the amount of tax, if any, to be withheld from his emoluments. should submit an Employee Declaration Form (EDF) to his employer. The EDF can be either downloaded or submitted electronically from the MRA website.

    An EDF should be submitted at the beginning of every income year so as to avoid unnecessary withholding of tax.

  10. What happens if I do not furnish an EDF?

    If you are not an exempt employee, tax will be withheld at the rate of 15% or at the option of the employee, withhold tax at the rate of 20% of those emoluments where emoluments for the month exceed Rs 30,000. Please note that an EDF may be filled at any time during an income year. Your employer will take into account your reliefs, deductions and allowances in calculating the amount of tax to be withheld in the future pay periods in that income year.

  11. What should I do if there is a change in my deductions during the year?

    As an employee you should ensure that the amount claimed as total reliefs, deductions and allowances in your EDF is correct. Where during an income year, there is a change in the total reliefs, deductions and allowances to which you are entitled, you may at any time in that income year furnish a fresh E-EDF or alternatively print a downloadable EDF and submit same to your employer claiming the revised amount of the reliefs, deductions and allowances. Your tax liability for the remaining pay periods will be adjusted accordingly.

  12. What if I am employed for the first time?

    Where you take up employment for the first time, you should, unless you are an exempt person, furnish to your employer an EDF duly filled in.

  13. What if I take up a new employment?

    You should, unless you are an exempt person, furnish a declaration to your new employer.

  14. What if I have more than one employer at any one time?

    You should furnish an EDF to ONLY one of your employers. Except if you are an exempt employee, the other employers will withhold tax from your emoluments at the rate of 15% or 20% as may be stated by the employee in his request.

  15. Should I submit an income tax return at the end of the income year?

    Tax deductions under PAYE are provisional payments of tax. A return should be filled in after the end of an income year to ascertain the final tax liability for that year. A return should be submitted to the MRA in case you:

    (a) have an additional tax liability for the year,

    (b) are entitled to a refund of the tax paid in excess.

  16. How will I know my emoluments and PAYE deductions for the year?

    Every employer is required by law to give not later than 15th August following an income year, to each employee employed by him during that income year, a Statement of Emoluments and Tax Deduction.

    You should insert details of the Statement of Emoluments and Tax Deduction while filling your return.

  17. How to obtain additional information on PAYE?

    Contact MRA Help Desk on 207 6000 or email us on This email address is being protected from spambots. You need JavaScript enabled to view it. .

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