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REVIEW OF NSSA CONTRIBUTIONS

The National Social Security Authority (NSSA) has through Public Notice advised stakeholders and employers of the revision of the current insurable earnings.  The authority cited statutory instrument 169 of 2021 namely National Social Security Authority (Pensions and Other benefit schemes) (Rates of Benefits) Amendment Notice 2021 (No 28) as the major reason for review.

Section 8 of the statutory instrument set out that the maximum amount of monthly earnings in respect of which contributions are payable shall be seventy-five (75) per centum of the prevailing previous month Total Consumption Poverty Line for an average of five persons per household with effect from 1st June, 2021. Where the Total Consumption Poverty Line figure is not available or published, the last published figure is applicable.

The NSSA explained that it will publish online the monthly maximum threshold of insurable earnings. This amount is $21,641.25 for the month of June 2021. The national Total Consumption Poverty Line (TCPL) will also be published from time to time by the national statistical office (ZIMSTAT). TCPL for one person for May 2021 was $5,771 and therefore $28,855 for five persons.

The statutory instrument further provides that contributions shall be paid in United States dollars where the employee’s salary or wages is in foreign currency. To determine the contribution rates, remuneration in United States dollars shall be converted to Zimbabwe dollars at the prevailing inter bank rate when the remuneration was paid.

Where the basic salary is below the maximum prescribed insurable earnings with allowances and other benefits exceeding basic salary by 100% (one hundred percent), then allowances and benefits shall be grossed up and deemed to be the basic salary for purposes of calculating insurable earnings.

In conclusion, the statutory instrument also prescribes heavy surcharges to be paid by employers for failure to submit contributions and returns on the due dates. The surcharges are set out at $1,000 per day for each day beyond 90 days that the return was due, up to a maximum penalty of $200,000.

Richard Dimingo
Richard Dimingo
Practice Manager Next Investments

Richard Dimingo is a multi-disciplined practitioner with more than twenty five years experience in the accounting, tax and management consulting field. He is also a blogger, consultant, coach, trainer and practitioner in the fields of software development, technology consulting, tax and estate planning, life transformation and META-Health.

 

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Richard Dimingo
Richard Dimingo
Practice Manager Next Investments

Richard Dimingo is a multi-disciplined practitioner with more than twenty five years experience in the accounting, tax and management consulting field. He is also a blogger, consultant, coach, trainer and practitioner in the fields of software development, technology consulting, tax and estate planning, life transformation and META-Health.

 

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