New NSSA Guidelines: Understanding the USD 700 Ceiling
NSSA Reviewed to USD 700
The National Social Security Authority (NSSA) has recently announced a significant change to the NSSA Limit, effective June 1st, 2024, through SI 99 of 2024. This update is designed to align the NSSA Limit with the current economic landscape and provide better coverage for employees.
Key Change: NSSA Ceiling Now Pegged in USD
Previously, the NSSA Limit (maximum insurable earnings) was set at ZIG 5010.83. However, the new regulations have shifted the NSSA Limit to a USD-based system, setting the new threshold at USD 700 per month. This change allows for easier calculations and adaptability as the exchange rate fluctuates between the Zimbabwe Gold (ZIG) and the US dollar (USD).
How This Affects Your Payroll
Multicurrency & USD Payrolls:
For employers with multicurrency or USD-only payroll systems, this change is particularly beneficial. You can now use the USD 700 figure directly for both the NSSA Limit and the contribution threshold (4.5% of the USD700 limit), simplifying the calculation process and reducing the need for constant exchange rate conversions.
ZIG Only Payrolls:
If your payroll is denominated solely in Zimbabwe Gold (ZIG), you’ll need to multiply the NSSA Limit of USD 700 by the official exchange rate to determine the monthly threshold and contributions for each period. This ensures that your NSSA calculations remain accurate and aligned with the new regulations.
Implications for Employers and Employees
Possible Higher Contributions:
The increase in the NSSA Limit from ZIG 5010.83 to USD 700 (approximately ZIG 9,401.63 at the current exchange rate) may result in higher NSSA contributions for some employees. Employers should review their payroll systems and communicate these changes to their staff to ensure they are prepared for the potential impact on their net salaries.
Contribution Threshold Remains at 4.5%:
It’s important to note that despite the increase in the NSSA Limit, the contribution threshold remains unchanged at 4.5% of the NSSA Limit (USD 700). This means that the employee and employer contributions will be calculated based on 4.5% of the new USD 700 limit.
Stay on Top of Things:
To ensure you’re fully informed and prepared for these changes, we recommend the following:
- Visit the NSSA website (https://www.nssa.org.zw/) for the latest information and resources on the new NSSA Limit and regulations.
- Download our comprehensive guide on setting up NSSA on your payroll system, available at https://belinapayroll.com/resources-zw/. This guide will help you navigate the process and ensure your payroll is compliant with the new NSSA Limit.
By staying informed and proactively addressing these changes, you can maintain accurate NSSA contributions for your employees and ensure your payroll processes are aligned with the latest regulations.