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What is the PAYE?

A pay-as-you-earn tax (PAYE) is a withholding tax on income payments to employees. Amounts withheld are treated as advance payments of income tax due. They are refundable to the extent they exceed tax as determined on tax returns.

Under the PAYE system, the employer calculates the tax burden by the employee and deducts the PAYE on a monthly basis.

How does it work in practice?

1. Every employee at the beginning of each year must complete the employees income declaration (IR59 form) which details all his emoluments and his personal allowances and provide it to his employer.

2. The employer calculates the tax obligation for each employee based on his IR59 declaration.

3. The employer withholds on a monthly basis the relevant tax from the salaries of the employee and pays it to the tax authorities.

Who is responsible?

It is the employer’s responsibility to make the proper PAYE deductions and make the payment to the tax authorities.


Must be paid by the end of the following month.

Penalties on late payment

If PAYE is not paid in time, the following interests will be charges:

5% per annum plus an additional 1% per month.

This publication has been prepared as a general guide and for information purposes only. It is not a substitution for professional advice. Authors or the publishers accepts no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication.

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