Pay As You Earn (PAYE) and Solidarity Levy


  1. What is PAYE?
  2. Main Characteristics
  3. Personal Reliefs & Deductions
  4. Calculation and withholding of tax
  5. Cumulative PAYE System
  6. Remittance of PAYE withheld
  7. EDF: Circular Letter to Employers
  8. Solidarity Levy

  1. What is PAYE?

    Pay As You Earn (PAYE) is a system whereby employers are required to withhold tax from the emoluments of employees chargeable to tax at the time the emoluments are received by or made available to the employees. The tax withheld is then remitted to the Mauritius Revenue Authority (MRA) every month.

  2. Main Characteristics

    1. The PAYE system operates on the pay for the current period at the time the emoluments are received or made available to the employee. Employers are thus required to withhold tax at the rates of 10% or 15%; whichever is applicable, from the monthly emoluments of employees and remit same to the MRA either electronically or through a computer system approved by the Director General.

    2. Employees have to furnish every year to their employer an Employee Declaration Form (EDF) claiming the Income Exemption Threshold, additional exemptions and reliefs to which they are entitled in an income year. An employee receiving emoluments from more than one employer can submit an EDF to only one employer.

    3. The amount of tax to be withheld from the emoluments of each pay period is calculated on a cumulative basis by cumulating both the emoluments and total exemptions and reliefs (total deductions) pertaining to the current and previous pay periods in the income year concerned.

    4. Finance Act 2020 has brought along one significant amendment in the computation of Solidarity Levy (SL). Employers are now required to withhold SL where the monthly emolument of an employee exceeds Rs 230,769 at the rate of 25% (Rs 3,000,000 annually) provided that additional tax withheld does not exceed 10% of total emoluments

    5. Workers receiving their pay daily after each day`s work are excluded from the operation of the PAYE system.

    6. Employees drawing monthly emoluments not exceeding one thirteenth of the Category A Income Exemption Threshold (IET) are not affected by PAYE. However, a person deriving pension, annuity or similar payments below the IET threshold may request his employer/payer to withhold PAYE from such payments by completing the authorisation to deduct PAYE form, available on MRA website.

    7. A non- citizen who is resident in Mauritius for Income Tax Purposes has to furnish an EDF to his employer in Mauritius unless his/her monthly emoluments do not exceed Rs 25,000.

    8. A non-resident in receipt of emoluments, including pension, irrespective of the amount, is not entitled to any exemption and relief. His/her gross emoluments for any pay period shall represent his chargeable income for that pay period.

    9. A non-resident citizen of Mauritius in receipt of any retirement pension is subject to PAYE at the rate of 10% or 15%, whichever is applicable, on that part of his retirement pension which exceeds the income Exemption Threshold in respect of category A.

      Dependent” means either:

      1. a spouse,

      2. a child under the age of 18; or

      3. a child over the age of 18 and who is pursuing full-time education or training or who cannot earn a living because of a physical or mental disability; and

      4. a bedridden next of kin under his care.

      Child” means:

      1. an unmarried child, stepchild or adopted child of a person;

      2. an unmarried child whose guardianship or custody is entrusted to the person by virtue of any other enactment or of an order of a court of competent jurisdiction;

      3. an unmarried child placed in foster care of the person by virtue of an order of a court of competent jurisdiction.

      Bedridden next of kin”, in respect of a person, means the bedridden father, mother, grandfather, grandmother, brother or sister of that person or of his spouse, provided the bedridden next of kin is:

      1. eligible to the carer’s allowance payable under the National Pensions Act; and

      2. under the care of that person

  3. Personal Reliefs & Deductions

    Employees have to furnish every year to their employer an Employee Declaration Form (EDF) claiming the Exemptions and Reliefs to which they are entitled in an income year.

    Kindly click here for questions on EDF.

  4. Calculation and withholding of tax

    Every employer should, at the time emoluments are received by or made available to his employees, withhold PAYE and Solidarity Levy, from those emoluments provided that his emoluments exceed his Total Exemption and Reliefs. The amount of tax to be withheld should be rounded to nearest rupees.

    An individual having an annual net incomeRate of income tax
    not exceeding 650,000 10%
    exceeding 650,000 rupees 15%

    Where, for the month of July, the basic salary, including compensation, of an employee does not exceed Rs50,000, the tax rate applicable under PAYE system for that month and subsequent months of the income year is 10% provided the Average Cumulative Monthly Salary of the employee does not exceed Rs 53,846.

    The amount of tax to be withheld should be in whole rupees. Cents should be left out.

  5. Cumulative PAYE System

    Under the cumulative PAYE system, the employer is required to follow the following steps to calculate the PAYE to be withheld in a month:

    1. Calculate the taxable emoluments from the month of July of the current income year up to the current month.

    2. Calculate 1/13 of the total Exemptions and Reliefs claimed by the employee in his EDF to determine the monthly Exemptions and Reliefs to which the employee is entitled.

    3. Calculate the cumulative Exemptions and Reliefs by multiplying the item at (II) above by the number of months considered at item (I) above. The month in which the statutory end of year bonus is paid is considered as the 13th month.

    4. Apply tax at the rate of 15% on the chargeable income which is arrived at by deducting the amount arrived at in item (III) above, from the amount arrived at in item (I) above. Any negative value is taken as zero.

    5. Deduct the amount of PAYE already withheld for the previous months starting with the month of July of the current income year from the tax amount arrived at item (IV) above to obtain the amount of PAYE withheld for the current month. Any negative value is taken as zero.

  6. Remittance of PAYE withheld

    The tax required to be withheld under PAYE should be remitted electronically through such computer system as the Director-General may approve;

    1. by direct debit;
    2. through such other means as the Director-General may approve;

    and at the same time, submit a monthly PAYE return, electronically in respect of ALL employees whether PAYE has been withheld or not, , giving:

    1. the full name;
    2. the NIC number where the employee is a citizen of Mauritius or the identification number issued by the Passport and Immigration Office, where the employee is not a citizen of Mauritius;
    3. Where a non-citizen is not entitled to a NCID, the Tax Account Number (TAN) should be inserted;
    4. the salary, wages, overtime pay, leave pay and other allowances excluding travelling and end of year bonus; and
    5. the amount of tax withheld.

    Tax withheld by an employer under PAYE should be paid to the Director-General within 20 days from the end of the month in which the tax was withheld in such manner as may be prescribed. In case tax withheld is remitted electronically, it should be paid on or before the end of the month immediately following the month in which the tax is withheld.

    Since the tax withheld from the emoluments of employees is held on behalf of the Government and is not subject to attachment in respect of a debt or liability of the employer, remittance of tax to the MRA should not be delayed for any reason whatsoever and should always be remitted by the due date.

  7. Solidarity Levy

    • An individual whose leviable income exceeds 3 million rupees is liable to an additional solidarity levy which is calculated at the rate of 25% of the leviable income in excess of 3 million rupees

    • Leviable income is the chargeable income of the individual and dividends paid to him by a resident company and a co-operative society registered under the Co-operative Act 2016

    • With effect from income year 2019-2020, a person has to declare as part of his leviable income his share of dividend concerning to a societe in which he is an associate

    • However leviable income does not include any lump sum by way of commutation of pension or by way of death gratuity or as consolidated compensation for death or injury, and paid –

      1. by virtue of any enactment;

      2. from a superannuation fund; and

      3. under a personal pension scheme approved by the Director-General

    1. Solidarity Levy on Emoluments

      Employers should henceforth also deduct solidarity levy (SL) at the rate of 25 % in respect of employees who derive emoluments in excess of Rs 3 millions annually.

      In the month where an employee’s salary exceeds Rs 230,769, his employer will withhold 25% SL on the excess of emoluments received. However, the SL deducted must not exceed 10% of the total emoluments.

      Lump sum payments under the Pension Act, the Superannuation Fund or Personal Pension Plan are not liable to Solidarity Levy.

    2. Employee has submitted EDF

      Solidarity Levy (SL) has to be withheld from the emoluments of the employee on a cumulative basis at the rate of 25 %. However, the maximum deduction is limited to 10 % emoluments for the month.

      The first Rs 3 million of an employee’s leviable income is not liable to solidarity levy. For monthly SL calculation, employees are allowed a Solidarity Levy Exemption Threshold (SLET) of Rs 230,769 (Rs 3,000,000/13). In December, in view of the end of year bonus, twice the monthly amount of SLET should be allowed.