Pay elements

Rates, thresholds and deadlines change. The figures on this page reflect the rules Bumara applies today and are given as a guide. The regulator’s current published position always governs. Bumara applies the rate in force when your filing is calculated — always check the figures shown on your actual filing rather than relying on this page, and take professional advice on how the rules apply to your business.

Pay elements are the parts that make up an employee’s pay beyond basic salary. Allowances add to it. Deductions take from it. How each is configured affects gross pay, take-home pay, and what you owe ZRA, NAPSA and NHIMA.

Standard elements

Bumara creates these automatically when you set up payroll:

Element	Type	Typical use
Housing allowance	Allowance	Accommodation contribution
Transport allowance	Allowance	Travel to and from work
Meal allowance	Allowance	Meals during work
Leave pay	Allowance	Paid leave days
Advance	Deduction	Salary advance recovery

Adding your own

Open Payroll, then Settings, then Allowances or Deductions

Choose Add.

Name it clearly

The name appears on every payslip. “Fuel allowance” is clear; “Allowance 3” is not.

Choose fixed or variable

Type	Behaviour
Fixed	The same amount every month
Variable	Entered per employee per month through monthly inputs

Set the tax treatment

Whether it is taxable. This is the setting that matters most — see below.

Set whether it counts towards statutory contributions

Whether it forms part of the base for NAPSA, and whether it affects NHIMA.

Save

It is now assignable to employees.

Tax treatment

This determines whether the amount is included in chargeable emoluments for PAYE.

Treatment	Effect
Taxable	Included in chargeable emoluments. PAYE is calculated on it
Non-taxable	Excluded from chargeable emoluments. No PAYE

Do not guess this. Whether an allowance is taxable is a question of Zambian tax law, not preference. Treating a taxable allowance as non-taxable understates PAYE for every employee, every month, and the correction is backdated with interest. Ask your accountant.

The contribution bases

The two schemes use different bases, and this is a frequent source of confusion:

Scheme	Rate	Calculated on
NAPSA	5.5% employee, 5.5% employer	Gross pay, capped at the statutory ceiling
NHIMA	1% employee, 1% employer	Basic salary

So an employee on K5,000 basic with K3,000 of allowances has NAPSA calculated on K8,000 (subject to the ceiling) but NHIMA calculated on K5,000. When you configure an allowance, you specify whether it forms part of the gross for NAPSA purposes. Get this wrong and your NAPSA contributions are wrong for everyone who receives that allowance.

Assigning to an employee

Open the employee

From Payroll → Employees.

Go to the Allowances or Deductions tab

Choose Add.

Select the type and enter the amount

For fixed elements. Variable ones are entered monthly instead.

Set the effective dates

From when it applies, and until when if it is temporary.

Save

It appears in the next pay run within its effective dates.

Effective dates catch people out constantly. An allowance dated from the 1st of next month will not appear in this month’s run, no matter when you entered it. If an employee’s pay looks wrong, check the effective dates first.

Deductions

Kind	Example	Set up as
Recurring	Union subscription, social fund	Fixed, assigned to the employee
One-off	A single ad-hoc deduction	Entered through monthly inputs
Advance recovery	Repayment of a salary advance	The standard Advance deduction
Loan instalment	Repayment of a staff loan	Created automatically by the loan. See Loans

The deduction cap

Your payroll settings include a maximum deduction percentage, commonly 50% of gross. If an employee’s total deductions would exceed the cap, Bumara limits them. This protects both the employee — who must have something to live on — and you, since excessive deductions may breach employment law. If a deduction was capped, the shortfall carries into the following month rather than disappearing.

Overtime

Overtime is calculated during the pay run from hours entered in monthly inputs, using the multipliers in your payroll settings.

Type	Typical multiplier
Regular overtime	1.5×
Holiday or weekend overtime	2.0×

The hourly rate is derived from the employee’s salary and your configured working days.

Reviewing your elements

Check	How often
Tax treatment is correct on every element	Annually, and whenever tax rules change
NAPSA base setting is correct	Annually
Amounts still reflect your policy	At each salary review
Elements with no employees assigned	Annually — archive them
Effective dates on temporary elements	Monthly, before the run

Common problems

Problem	Usual cause
Employee’s pay is lower than expected	An allowance’s effective date has not started
Employee’s pay is higher than expected	A temporary allowance’s end date has passed but was never set
PAYE looks too low	A taxable allowance is configured as non-taxable
NAPSA looks too low	An allowance is excluded from the gross base when it should be included
NHIMA does not match NAPSA proportionally	Correct — they use different bases
A deduction did not fully apply	The deduction cap was reached

Next: Monthly inputs for the variable figures entered each period.

Setting up

The monthly cycle

Loans and returns

Standard elements

Adding your own

Tax treatment

The contribution bases

Assigning to an employee

Deductions

The deduction cap

Overtime

Reviewing your elements

Common problems

​Standard elements

​Adding your own

​Tax treatment

​The contribution bases

​Assigning to an employee

​Deductions

​The deduction cap

​Overtime

​Reviewing your elements

​Common problems

Standard elements

Adding your own

Tax treatment

The contribution bases

Assigning to an employee

Deductions

The deduction cap

Overtime

Reviewing your elements

Common problems