Government Regulation 58 of 2023 introduced the average effective rate (TER) for monthly employee income tax withholding, effective from January 2024.
How it works
For January to November, employers multiply gross monthly income by a rate taken from TER tables (categories A, B and C based on marital status and dependants). The calculation is simpler, but it is only an approximation.
The December true-up
In the final tax period of the year, tax is recalculated using the normal progressive rates on annual net income. The difference between annual tax due and the total withheld from January to November is withheld in December — which can make December take-home pay noticeably different.
Practical tips
- Map every employee to the correct TER category.
- Include all taxable benefits in gross income.
- Simulate December early to avoid surprises.
