NSSA Registration

Employers are required to register their businesses and employees with the National Social Security
Authority (NSSA). However, there are other requirements in relation to NSSA that some may be less
aware of. For example, employers are required to notify NSSA of changes in their details and their
employees’ employment statuses.

They are also required to keep records with relevant information on each employee that they may have
to produce on demand to NSSA inspectors.

There are also forms to complete and return each year in respect of both the pension scheme and the
Worker’s Compensation Insurance Fund (WCIF). Some employers may be uncertain what obligations
they have, if any, in relation to casual employees and NSSA contributions.

Employers are required to register with NSSA within 30 days of becoming an employer by completing
and submitting to NSSA registration form P2. They are also expected to ensure each employee
completes employee registration form P3. Both forms can be obtained from any NSSA office. We
provide all such assistance at affordable rates.

Statutory Requirements

NSSA - Visit NSSA Website

1. Employers must deduct 3.5% of an Employee's Basic Salary plus any Back Pay for previous Pay
Periods. Companies must also pay the equivalent amount to NSSA

2. Workmen's Compensation Insurance Fund (WCIF). This is calculated using the WCIF percentage
for the Company NEC times the Basic Salary less Short Time.

3. P4A – Monthly Remittance Advice with NSSA deductions for Employees plus Company
contributions. Also prints WCIF amounts. To be submitted by last working weekday before or
including the 10th of the month following the pay day - Due by  the 10th of the Month.

4. P2 – Employer Registration Form. To be completed within 30 days of Company Registration.

5. P3 – Employee Registration (Part 1 / Part 2). For all New employees.

6. P4C – Employee Detail Change. When an employee moves from one employer to another
(sample print out 1 | 2).

7. P9/ P10 – Benefit Claim Form to be printed by Employer and given to Employee when he leaves
the Company. This report gives details of all NSSA Deductions and payments made for a given
employee in the last 12 months of his employment with the Company.

8. P16 – Annual Company Return. Listing all contributions for NSSA for a given Tax Year. To be
submitted by 31st January.

FORMS REQUIRED BY NSSA

 P2 - Employer Registration – to be done within 30 days of becoming an employer.

 P3 - Employee registration.
  P4C - Employee detail change - When a registered employee moves from one employer to
another.

 P9/10 - Benefit claim form- Employee last 12 month NSSA contributions.

Zimra - Visit Zimra Website

1. Payrite automatically calculates PAYE using the forecasting method of the Final Deduction
System (FDS). The system has a screen enquiry, along with a suitable printout, whereby the
operator can see how the PAYE has been worked out by Payrite.

2. PAYE P2 is the monthly Remittance Advice that must be printed off and sent to Zimra together
with the monthly PAYE amount by 10th of each month.

3. Annual FDS Disc must be created and sent to Zimra by 31st January each year. This file gives
totals paid and deducted for each member of staff for a given year in a specific format required
by Zimra. The file can be emailed to the nearest provincial Zimra office.

4. P6. This printout is a summary of each employee's Pay for a given year that must be given to him
or her on completion of your Company's Year End Procedure.

5. Annual Tax Return. It is the responsibility of individuals that have had more than one source of
income in a given year to submit an Annual Tax Return so that Zimra can analyse any shortfalls
or overpayments in PAYE for that person.

Other Important Payment Dates

 Manpower Development Levy - by the 15th of each month

 NEC - by the 10th of the month

 Standard Development Levy - per quarter (15th January, 15th April, 15th July, 15th October)

 ITF263 / ZIMRA FDS Disc - by the 30th day after the end of the tax year

Employers are required to register their businesses and employees with the National Social Security
Authority (NSSA). However, there are other requirements in relation to NSSA that some may be less
aware of. There are also forms to complete and return each year in respect of both the pension scheme
and the Worker's Compensation Insurance Fund (WCIF). Some employers may be uncertain what
obligations they have, if any, in relation to casual employees and NSSA contributions. Employers are
required to register with NSSA within 30 days of becoming an employer by completing and submitting to
NSSA registration form P2. They are also expected to ensure each employee completes employee
registration form P3. - See more at: http://www.esaja.com/business-services/company-
registration/nssa-registration-solutions/p/?id1=980#sthash.Q2braDQB.dpuf

Every employer is obliged by law to register his/her business and employees with the National Social
Security Authority and to remit contributions to the Pension and Other Benefits scheme and premiums
to the Worker’s Compensation Insurance Fund (WCIF) by the 10th of each month.

The only exceptions are informal sector employers and employers of domestic workers, since those
sectors are not as yet covered by the schemes.
Half of the pension scheme contribution is deducted from the employee’s salary each month. The other
half is paid by the employer. The WCIF contribution is paid by the employer alone.

Employers are also required to notify NSSA in writing of changes in their business details and in the
employment status of their employees.

Inspectors are empowered to inspect any premises where there is cause to believe there are employees
who should be covered by the two social security schemes in order to register unregistered employers
and employees and enforce payment of contributions and premiums.

They are entitled to make any enquiry they consider necessary to establish that the regulations
governing the schemes are being complied with.

They may ask employers to produce any books, registers, accounts, monthly returns, receipts, computer
databases and documents relevant to the schemes. They are entitled to copy relevant documents.
Employers should keep records with relevant information about each employee that they may have to
produce on demand to NSSA inspectors.

There are forms to complete and return each year in respect of both the pension scheme and the
Worker’s Compensation Insurance Fund.

The end of year return form for the pension fund is the P16 form. Its purpose is to reconcile payments
made during the year to facilitate the crediting of individual accounts. The WCIF return is form WC50.

The P4A monthly remittance form stipulates the monthly wage bill, insurable earnings, number of
employees, pension contribution and WCIF premium, but does not include the names of employees. The
names of employees are provided when they register.

If they cease to be employed by the employer, then the employer is expected to notify NSSA of this by
completing form P4c.

The form P16 provides details of each employee’s employment period and the contribution made.

New employers are required to register within 30 days of becoming an employer by completing and
submitting to NSSA form P2 and to ensure that each employee completes a form P3 employee
registration form.

NSSA notifies the employer of his/her social security registration number (SSR number) and employer
industry code (EC). The employee is allocated a social security number, which remains the same for life.

Employees who have not been advised of their social security number can, if their employer does not
have it, obtain it from their nearest NSSA office. They will need to provide their national identity card to
enable NSSA to obtain their social security number for them.

All forms can be obtained from NSSA offices or be downloaded from the NSSA web-site
(www.nssa.org.zw)

What the inspectors visiting businesses over February and March are chiefly checking on is whether
contributions and premiums are up-to-date. Employers should have their NSSA payments receipts and
wages records readily available to facilitate the exercise.
Those who are behind with their payments would be well advised to bring their payments up-to-date
before an inspector arrives at their premises, even if they have not met the February 15 deadline.
Employers who have not registered their business or employees would likewise be well advised to do so
as soon as possible.

Failure to comply with regulations set out in statutory instruments governing the two social security
schemes is a criminal offence, which means prosecution, in addition to financial penalties and
surcharges, could ensue. Conviction could result in a fine or imprisonment or both, a situation no
employer would want to find himself in.

Talking Social Security is published weekly by the National Social Security Authority as a public service.
There is also a weekly radio programme, PaMhepo neNssa/Emoyeni le NSSA, discussing social security
issues at 6.50 pm every Thursday on Radio Zimbabwe.

Readers can e-mail issues they would like dealt with in this column to mail@mhpr.co.zw or text them to
0735 041 278. Those with individual queries should contact their local NSSA office or telephone NSSA on
(04) 706517-8 or
706523 5.

CONTRIBUTIONS

The pension and Other Benefits Scheme is financed from equal monthly contributions by both
employers and employees. It is the employer’s obligation to ensure that contributions are deducted and
paid to NSSA.  The contribution rate is as follows:

3% of basic wage/ salary by employee

3% of basic wage/ salary by employer

The total of 6% basic wage / salary should be paid to the nearest NSSA office on or before the 10 th of
each month. The insurable earning ceiling from which deductions are made has been set at $200 per
month.

REGISTRATION

When an employer commences business, he/she is required to go to his/her nearest NSSA office to
complete registration forms indicating the estimated earnings of his/her employees. The minimum
insurance premium the employer is required to pay will calculated using a risk factor depending on the
type of industry the company is involved in. The insurance year runs from January 1 – December 31 st.

CHANGE OF BUSINESS

Employers have the responsibility of keeping NSSA informed of any changes or developments in their
businesses. This will allow NSSA to keep accurate records and to adjust their insurance premiums and
records in line with any changes as and when they occur.

NATIONAL PENSION SCHEME (NPS)

What is National Pension Scheme? (NPS)

The Scheme was established, and is administered, in terms statutory Instrument 393 of 1993.

Introduced in 1994, the Pension and Other Benefits Scheme is based on a 50/50 contribution from the
employers and employees. The workers are entitled to a number of benefits after contributions for a
minimum set period and having met the qualifying condition of each of the benefits. It provides an
important cushion for Zimbabwean citizens during invalidity, retirement or death of a breadwinner who
was a member of the scheme. It is the noble duty of the employers and employees to ensure that
contributions are paid to NSSA.

Membership

The Pension and Other Benefits Scheme is for every working Zimbabwean above the age of 16 years and
under the age of 65 years who is in permanent employment, seasonal, contract or temporary
employment. This does not include domestic workers and the informal sector who are expected to join
at a later stage. And because it is a national scheme it is a compulsory requirement by law for all
Zimbabwean workers who meet these criteria to become members and contribute towards it. Upon
joining, every registered employer is issued with a social security registration number and every
registered employee is issued with a social security number for life.

What If I Change My Business ?

Employers have a responsibility to keep NSSA informed of any changes or developments in their
business. This will allow the Authority to keep constant accurate records and also make it possible for
the Authority to adjust their insurance premiums and records accordingly, in line with any changes as
and when they occur.

CONTRIBUTIONS
The Pension and Other Benefits Scheme is financed through a defined
Benefits – scaled premium method, where equal monthly contributions are made by both employers
and employees as follows:

1. 3.5% of $700 by employee

2. 3.5% of $700 by employer

The total of 7% of $700 is paid to the nearest NSSA office on or before the 10th of each month.
Employers are obliged to ensure that contributions are deducted and paid to NSSA. The Insurable
Earnings Ceiling from which deductions are made has been set at Seven Hundred Dollars (US$700) per
month.

Benefits Payable By the Scheme

The Pension and Other Benefits Scheme offers four main types of benefits and they are as follows:

 Retirement pension and grants

 Invalidity pension and grants

 Survivors' pension and grants

 Funeral Grant
oluntary registrationVoluntary registration may be applied for. The main advantage is the ability to
recover input VAT paid. The maindisadvantage is the administration of the system. Voluntary
registration is particularly advantageous to zero ratedtraders as they do not charge output VAT but can
recover input VAT.The following is a summary of the advantages and disadvantages of voluntary
registration.AdvantagesDisadvantagesHides the size of business, thus giving theimpression of being well
established.Allows trader to recover input VAT.If customers are not VAT registered,the VAT charged will
be a real cost toIf the business is likely to recover more VATthem. In a competitive market thethan it
pays, then this will assist cashflow.trader may have to absorb the VATin his profit margins

Financial Training Company106

www.ftc.com\za

AdvantagesDisadvantagesAvoids any further problems whencompulsory limits exceeded.Imposes

discipline on a business to keepExtra administration.accurate records.Allows intending trader to reclaim
input taxRisk of penalties for accountingin advance of making taxable supplies.mistakes and late
submission ofreturns etc.Relief for pre-registration input taxInput tax can normally only be recovered if
it was incurred on supplies received when the claimant was a taxableperson.However, pre-registration
input tax can be recovered (in the first return period) on:

services invoiced in the six months prior to registration.

goods received in the three years prior to registration if still held at the date of registration.Accounts
and recordsVAT returns and VAT invoicesOne of the perceived disadvantages of having to be VAT
registered is the administrative burden it places on traders,who are made responsible for collecting VAT
for Zimra. The following records must be compiled and retained.The VAT return. This is a quarterly
return which must be completed and returned within 30 days of the quarter end.The quarter periods
are allocated to a trader on registration (eg 30 April, 31 July, 31 October, 31 January). Zimraallocate
quarter ends (eg 31 January etc, 28 February or 31 March etc) according to industry type so as to spread
theirown workload evenly through the year. Traders making zero rated supplies can expect to be
receiving VAT repaymentsfrom Zimra and can opt to make their returns monthly instead of
quarterly.The VAT invoice. This important document is the principal record for a customer to support a
claim to recover inputVAT. It must contain all of the following details.

An identifying number

The date of the supply and date of issue of the document

♦

The name, address and registration number of the supplier

The name and address of the person to whom the goods or services are supplied

The type of supply by reference to certain specified categories: a supply by sale, on hire purchase or
similartransaction, by loan, by way of exchange, on hire, lease or rental, of goods made from customer’s
materials, by saleon commission, on sale or return or similar terms

A description sufficient to identify the goods or services supplied

For each description, the quantity of the goods or the extent of the services, the rate of tax and the
amount payable,excluding tax, expressed in sterling

The gross total amount payable, excluding tax, expressed in sterling

The rate of any cash discount offered

The amount of tax chargeable expressed in sterling at each rate, with the rate to which it relates

The total amount of tax chargeable expressed in sterling

VAT records

Adequate records and accounts of all transactions must be maintained to support both the amount of
output VATchargeable and the claim for input VAT. These records must be kept for six years and include
the following.

VAT account linking the figures in the VAT return with the underlying records.

Purchase invoices and copy sales invoices

♦
Orders and delivery notes

Purchase and sales day books

Cash book

Records of daily takings (eg till rolls)

Annual accounts (balance sheets and profit and loss accounts)

Bank statements and paying–in slips

Any credit/debit notes issued

Accounting for VAT

Output VATWhen a trader becomes VAT registered, then the appropriate VAT rate (ie 17.5%, 5% or 0%)
will need to be charged onsupplies in the correct period. As detailed above, the VAT period is either
monthly or quarterly. The correct period isdetermined by the tax point.The basic tax point of different
types of supply is as follows.

Supplies of goods: date of despatch (ie when goods are removed from stock or made available).

Supplies of services: date when service is performed (ie when completed).

Goods on sale or return: date the purchase of the goods is accepted, but with a maximum time limit of
12 monthsfrom despatch.

Continuous supplies: this is the earlier of the issue of the tax invoice or the receipt of payment, and
coverssituations where there is no tax point.

The actual tax point is as follows.

♦
Normally the basic tax point

If payment is received or an invoice is issued before the basic tax point the earliest date is taken

If the invoice is issued within 14 days after the basic tax point, the invoice date is used unless payment is
receivedearlier, or the trader elects not to use the 14 day rule.Zimra can agree to extend the 14 day
period at the trader’s request. For example, issuing invoices at the month end forsales in the month may
be convenient. By agreement the tax point can be the month end where invoices are so issued.The rules
on ‘tax point’ are highly examinable.Valuation of suppliesIf the consideration for a supply is payable in
money, the value of the supply (on which VAT is calculated) is the VATexclusive selling price.If the
consideration is in kind (eg a barter transaction), VAT is charged on the open market value of the
supply.Similarly, if the consideration is partly in cash and partly in kind (eg a part exchange deal for a car)
the open marketvalue is used.Open market value is defined as the VAT-exclusive amount that would be
payable if the vendor and the purchaser weredealing at arm’s length.Certain supplies have special rules
in connection with output VAT. These are discussed below.Fuel for private useThis applies to private fuel
provided to an employee. The business is permitted to recover the full input VAT on fuelpurchased.
Output VAT is then based on a scale charge, to account for the private use element. There is no
scalecharge if the employee reimburses the business in full. The scale charge is deemed to be the VAT
inclusive amount. Itwill be given to you in the exam. If the employer does not claim input tax on his car
fuel purchases, the scale charge iswaived. This might be beneficial if there are only small amounts of fuel
purchased.Business giftsThe output VAT position is depicted as follows in relation to business
gifts.Supply of goods Output VAT on value of supply, unless cost is less than $50Supply of services No
VATTrade samplesNo VAT, but only one item per personDiscountsThere are two types of discount on
sales invoices which affect output VAT.

Trade discounts. VAT is charged on the price after trade discount

Prompt payment discounts. VAT is charged on the price after discount even if the prompt payment
option is nottaken up.The rules are demonstrated as follows

Appeals and assessments

AssessmentsWhere a taxpayer fails to make returns, or Zimra consider the returns to be incomplete or
incorrect, they may issueassessments of the amount due. This is normally done within two years of the
period when the fault occurs but can beextended to three years. Where there is fraudulent or negligent
conduct the period is increased to 20 years.Appeal procedureWhere an assessment is made or other
dispute arises with Zimra (such as the requirement to register, or the calculationof output VAT) the
trader can appeal.The right of appeal does not apply to every possible grounds for disputes. Instead
statute provides a lengthy but notexhaustive list of appealable matters.The trader has 30 days to appeal
in writing against a decision of the local VAT office. The local office can then eitherconfirm the decision
or reverse the decision. In either case, the trader can appeal in writing to a VAT tribunal. In theformer
case, 21 days is allowed, in the latter 30 days.The role of the VAT tribunal is to hear the appeal. It is
normally conducted in public. A further appeal on a point of lawcan be made to the courts, including the
European Court of Justice.For a VAT tribunal to proceed, all VAT returns and payments (including the tax
in dispute unless the trader can show‘hardship’) must have been made.Costs may be awarded by a VAT
tribunal to either party