What is Tevet Levy

Section 20 (1) and (2) of the TEVET Act creates a TEVET Payroll levy into which “every employer” must pay “the sum of money equal to one per centum of the basic payroll in respect of the previous year”. This levy forms part of the TEVET Fund that is supposed to finance programmes approved by the Board of the TEVET Authority as defined in the TEVET Act.

TEVET Levy Payment

                                            SUMMARY ON TEVET LEVY

Who Pays

The TEVET Act enjoins upon every employer to pay 1% of basic payroll into the TEVET Fund.

Basic Payroll

The TEVET Act defines “basic payroll” as “total basic annual emoluments paid by the employer to the employee.”

Who is an employer?

The Employment Act (2000) defines the term “Employer” as “any person, body corporate, undertaking, public authority or body of persons who or which employs an employee and includes heirs, successors and assignees of the employer.”

What records are employers expected to keep?

Section 25 of the TEVET Act requires every employer to keep and maintain “at his principal place of business in Malawi” an up-to-date record of their payroll for all their employees and make that record available for inspection by an inspector authorized by the TEVET Authority.

For which period is TEVET Levy payable?

The TEVET Levy is payable in one year in respect of the payroll records of the previous year.

What payment method is the MRA and TEVET Authority encouraging?

Who is supposed to pay the TEVET Levy?

The TEVET Act demands that every employer, regardless of size or status, pays 1% of basic payroll into the TEVET Fund which is managed by TEVET Authority. This Levy is sorely a cost of the employer and should not be deducted from the employees’ emoluments.

Who is an employer?

The Employment Act (2000) defines the term “Employer” as “any person, body corporate, undertaking, public authority or body of persons who or which employs an employee and includes heirs, successors and assignees of the employer.” For purposes of the TEVET Levy payment, an employer is any registered organization/ company that employs people and pays them salaries/ wages. The TEVET Act defines “basic payroll” as “total basic annual emoluments paid by the employer to the employee.” The term “basic payroll” is not the same as “basic salary” but the law connects “payroll” with “emoluments” which is a much broader term than basic salary. Emoluments cover a wide range of employer’s cost in return for services rendered by the employee. These  include, asic Pay/Salary, gratuities & other terminal benefits; Bonuses; Overtime; Car Allowance; House Allowance; Telephone Allowance; Guard Allowance; Utilities Allowance; Settling-in Allowance; Passage/Airfare that is subject to Pay As You Earn (PAYE); Children’s Fees Allowance; Risk/Hardship Allowance; Domestic Servant Allowance; Acting/Responsibility Allowance and Leave Grants.

The above list is not exhaustive and any similar payments to employees on which PAYE is assessed must also be included when computing the basis for the TEVET Levy.

What records are employers supposed to keep?

Section 25 of the TEVET Act requires every employer to keep and maintain “at his principal place of business in Malawi” an up-to-date record of their payroll for all their employees and make that record available for inspection by an inspector authorized by the TEVET Authority. The payroll records should be the same records that are used for PAYE tax purposes.

Section 20 (5) cites that where in any case the basic payroll of an employer cannot be ascertained with any reasonable accuracy, the Executive Director, may in writing require the employer to pay a levy of such amount as the Executive Director may specify, and the employer shall pay the levy so specified within the time specified by the Executive Director.

For which period is TEVET levy payable?

The TEVET Levy is payable in one year in respect of the payroll records of the previous year. For example, the TEVET Levy payable in the financial year 1st July 2017 to 30th June 2018 is based on payroll records for the period of 1st July 2016 to 30th June 2017. This means that TEVET Levy is assessed on previous year payroll records.

How to Pay TEVET LEVY 

Employers have to self-assess their payroll costs to determine and pay the amount of Levy payable to TEVET Authority. In self-assessment, employers are supposed to fill in an Employer’s Data Form (EDF).

What are the steps followed in TEVET Levy payment?

With the new online TEVET Levy Assessment System (TLAS) an employer shall complete the Employer Data Form right in the system (whether on monthly or yearly basis) and the form will be securely stored. The Employer shall then generate a Payment Reference Number which they will use to make a payment at any commercial bank or through Electronic Funds Transfer (EFT). Once the payment is made, an Employer will be able to print their receipt from the system. 

Calculate TEVET Levy which is 1% of that total gross emoluments. 
Pay the TEVET Levy online using the TEVET Levy Assessment System (TLAS)
To utilize this system, each employer needs to create an account in TLAS. This should be done on the website https://tlas.mra.mw . The username should be the Tax Identification Number (TIN). Each employer shall then create own passwords. If an employer is not yet registered for TEVET Levy with TEVETA, they should first register  before creating the account.

Why pay TEVET Levy 

1). Good corporate image through compliance.  
2). Contribution towards development of skilled workforce for enhanced company’s performance and productivity  
3). Access to Productivity Enhancement Programmes (PEP)