|
|
| Item | Under the New IR Act | Under the Previous Act | Change | Tax free allowance & qualifying payment for employees. | Rs.1,200,000 per annum | Rs.750,000 per annum | Rs.500,000 tax free allowance was common for both Acts and qualifying payment value has been increased to Rs.700,000 from Rs.250,000 | Minimum Salary limit | Monthly regular profits are not taxable up to Rs.100,000. Monthly regular profits include travelling allowance or non-cash benefits on vehicle provided by the employer too. | Monthly regular profits were exempt from PAYE up to Rs.62,500 and Travelling allowance or first vehicle provided upto Rs.50,000 were also tax free. Accordingly total of Rs.112,500 was excluded from PAYE. | Employees, those who were entitled only for salary up to Rs.425,000 (without travelling allowance) will be benefited from New IR Act and if salary exceeds Rs.425,000,higher PAYE tax needs to be paid compared to previous. Employees who were entitled for salary & travelling allowance will be taxed upon exceeding their regular profits of Rs.100,000. | Slabs % Maximum Rate | First Rs.600,000 @ 4% Next Rs.600,000 @ 8% Next Rs.600,000@12% Next Rs.600,000@16% Next Rs.600,000@20% Balance @24% | First Rs.500,000@4% Next Rs.500,000@8% Next Rs.500,000@12% Balance @16% | Employee’s salary will be taxed up to 24% compared to 16% maximum as per the previous Act | Primary Employee declaration | Mandatory | Not required | Employee should give their primary employee declaration to employer. | Secondary employment | Upto Rs.50,000 @10% More than Rs.50,000 Rs.50,000 @ 10% Balance @ 20% | Private sector Upto Rs.25,000 @10% Above Rs.25,000 @ 16% Public sector Upto Rs.50,000 @10% Above Rs.50,000 @ 16% | Second employment will be taxed at a higher rate of 20% compared to 16% under previous Act. |
Calculate PAYE liability on your salary |
