The Final Deduction System forecasting method tips:
Once in a while on your Zimbabwe payroll you will get those payments that you give to your staff. These are obviously payments to you but earnings to your receiving staff member. Using the FDS deduction method we need to treat these irregular earnings in our payroll appropriately as recommended by Zimra.
Examples of Irregular payments include payments such as bonuses which are a once off payments that you do for your employees in appreciation of the work done during the year. Other irregular earnings include as noted by Zimra “, cash in lieu of leave, overtime, fluctuating commission, gratuity, and once-off incentives”
These earnings should not be forecast for the remaining months to the end of the year. They should be added to the taxable earnings for the month in which they are paid. With the Forecasting method we forecast the earnings for the remaining period to reflect what the staff member is expecting to receive added to what they were actually paid. However we cannot then forecast that the employee is going to receive the same amount of overtime every month, when overtime is an irregular occurrence necessitated by work load. The same can be noted for lieu of leave as it is a once off and hence this is an irregular payment.
So for us to get the right forecast PAYE and earnings we add the irregular earnings only for the taxable month and the rest of the forecast months maintain the regular earnings.
In the end think of an irregular earning in the Final Deduction System as a surprise box , naturally you will not receive surprises everyday and every month of the year.