The Manpower Development Levy (ZIMDEF) is another critical payroll-based compliance requirement in Zimbabwe that businesses need to manage alongside the Standards Development Levy (SDL) and ZIMRA . Understanding its registration and calculation is crucial for complete statutory compliance.
Our article on Manpower Development Levy (ZIMDEF), will cover:
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Who is obligated to pay (the scope of the levy)?
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The current levy rate and how it is calculated.
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The registration and payment process.
Here is an analysis of the requirements for registering and complying with the ZIMDEF Levy, based on current regulations:
ZIMDEF Levy: Registration and Compliance
1. Obligation to Pay: Who is Required to Register?
The ZIMDEF Levy is a statutory requirement for all companies and organizations operating in Zimbabwe that employ staff.
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Levy Payer: Every employer (private companies, parastatals, and state-owned enterprises) that pays remuneration to employees is legally obligated to register with ZIMDEF and remit the levy.
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Mandate: Failure to register and pay the levy is considered a criminal offense and can lead to penalties and litigation proceedings.
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Purpose: The funds collected are used to finance:
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Apprenticeship training costs (including wages and tuition).
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Equipping and developing infrastructure at tertiary and training institutions.
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Industrial Attachment Allowances for students.
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Rebates for compliant employers who invest in approved in-house training programs (making it a “pay-and-claim-back” system).
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2. Levy Rate and Calculation
The ZIMDEF Levy is calculated as a percentage of the total gross wage bill.
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Current Levy Rate: The rate is fixed at 1.0% (One Percent) of the total gross remuneration.
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Basis of Calculation (Gross Wage Bill): The term “remuneration” is broadly defined and includes:
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Salaries, wages, and commissions.
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Any bonuses paid.
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Cash in lieu of rations or leave.
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The employer’s contributions to pension and medical aid schemes.
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The value of allowances (cost of living, housing, education, etc.).
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The value of benefits in kind (e.g., free food, quarters, rent paid on behalf of the employee).
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Directors’ fees and emoluments.
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Note: The levy is an employer expense and is not deducted from the employee’s salary.
3. Registration and Payment Process
A. Registration Requirements
To formally register with ZIMDEF, an employer is generally required to complete the ZIMDEF Employer Registration Form and submit it to their regional ZIMDEF office along with supporting documentation:
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Completed Application Form: Obtainable from ZIMDEF offices or their official website (usually under the ‘Resources’ section).
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Certified Copy of the Certificate of Incorporation (or other proof of business registration).
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Valid Tax Clearance Certificate (ITF 263) from ZIMRA.
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Business Details: Name, legal form, physical and postal address, industry, and initial wage bill information.
B. Payment Frequency and Currency
Compliance requires timely submission of monthly declarations and payments:
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Payment Frequency: The levy is payable on a monthly basis.
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Due Date: Payment must be made on or before the 15th of the following month (based on the preceding month’s wage bill).
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Example: The levy for remuneration paid in December is due by January 15th.
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Declaration: Employers must submit a monthly Declaration Form detailing the gross wage bill and the calculated levy amount.
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Currency: If the wage bill is paid in foreign currency (e.g., USD), the 1% levy must be remitted in the same foreign currency to ZIMDEF. If the wage bill is mixed, payment must be pro-rata in both currencies.
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Penalties: Late payment attracts a surcharge (penalty) as specified in the Act, typically accruing interest and surcharges on the unpaid amount, and may lead to legal action.
The key takeaway is that ZIMDEF is a mandatory, monthly obligation that requires careful management within the payroll process to ensure full compliance and eligibility for potential training rebates.
