What You Need to Know About Botswana Payroll Tax

Botswana's payroll system is refreshingly simple compared to most African countries: PAYE is the only mandatory deduction, since Botswana has no national social security fund. There are no NSSF or UIF contributions to calculate. The top marginal PAYE rate increased to 26.5% for the 2025/2026 tax year, and employers file the ITW-7 monthly and the ITW-10 annual return with BURS. Here is everything you need to manage payroll correctly.

1. What is Payroll Tax?

Payroll tax in Botswana primarily consists of PAYE (Pay As You Earn), which is the income tax that employers deduct from employee salaries and remit to the Botswana Unified Revenue Service (BURS). Key points:

PAYE: Deducted at progressive rates, with the top marginal rate increasing to 26.5% for the 2025/2026 tax year (up from 25%)
No social security contributions: Botswana does not have a mandatory national social security scheme like many other African countries. However, employers may contribute to private pension and provident funds.

2. Who does it apply to?

This usually applies to:

All employers in Botswana who pay salaries or wages
Employees earning above the annual tax-free threshold of BWP 48,000 (BWP 4,000 per month)
Non-resident employees working in Botswana
Employers with both local and expatriate staff

3. Why does it matter?

Understanding payroll tax helps you:

Stay compliant with tax laws
Avoid penalties and late fees
Keep proper records
File and pay correctly
Plan your cash flow better

4. How does it work?

Here's the basic process:

Register as an employer with BURS
Obtain tax reference numbers for all employees
Calculate PAYE using the progressive tax tables from BURS
Deduct PAYE from each employee's monthly salary
Remit the total PAYE to BURS by the 15th of the following month
Issue tax certificates to employees at year-end
Submit the annual employer return within 31 days after the tax year-end (30 June)

5. What forms are involved?

ITW-7 - Monthly PAYE return (remittance advice for PAYE deductions)
ITW-10 - Annual employer return summarising all employees' earnings and PAYE
ITW-8 - Employee tax certificate (issued to employees for the tax year)

6. What information do you need?

Before handling payroll tax, make sure you have:

Your employer registration number with BURS
Employee tax reference numbers
Details of each employee's salary, allowances, and benefits
Records of any tax-exempt allowances
Pension or provident fund contribution details
Previous PAYE payment receipts

7. Important deadlines

Filing frequency: Monthly ITW-7 by the 15th of the following month
Payment deadline: PAYE due by the 15th of the following month
Year-end requirements: ITW-10 annual return due within 31 days after the end of the tax year (30 June). ITW-8 certificates issued to employees.

8. Common mistakes to avoid

Not applying the updated 26.5% marginal rate for the 2025/2026 tax year
Missing the 15th of the month deadline for PAYE remittance
Not accounting for taxable benefits (company car, housing, entertainment)
Failing to issue ITW-8 certificates to employees at year-end
Using incorrect tax tables for non-resident employees
Not registering new employees for tax with BURS
Missing the 31-day window for the annual ITW-10 return

9. Simple example

An employee earns BWP 15,000 per month (BWP 180,000 per year).

Using the 2025/2026 tax brackets:

First BWP 48,000: 0% = BWP 0
BWP 48,001 to BWP 96,000 (BWP 48,000): 5% = BWP 2,400
BWP 96,001 to BWP 144,000 (BWP 48,000): 12.5% = BWP 6,000
BWP 144,001 to BWP 180,000 (BWP 36,000): 18.75% = BWP 6,750
Annual PAYE: BWP 15,150
Monthly PAYE: BWP 15,150 / 12 = BWP 1,262.50

Total deducted from employee per month: BWP 1,262.50 (PAYE only, as there are no mandatory social security deductions)

10. FAQ

Q: What is the top PAYE rate in Botswana? A: The top marginal rate is 26.5% for the 2025/2026 tax year, applying to income above BWP 192,000 per year.

Q: Does Botswana have a social security fund? A: No. Botswana does not have a mandatory national social security scheme. Employers may voluntarily contribute to private pension or provident funds.

Q: When is PAYE due? A: PAYE must be remitted to BURS by the 15th of the month following the pay period.

Q: What is the tax year in Botswana? A: The tax year runs from 1 July to 30 June.

Q: Are non-residents taxed differently? A: Non-residents are taxed on their Botswana-sourced income. Certain types of income may be subject to withholding tax at different rates.

11. Final takeaway

Botswana's payroll tax is straightforward with PAYE as the main deduction, and remitting your ITW-7 to BURS by the 15th of each month keeps your business compliant.

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What you need to know about Botswana payroll tax: Deduct PAYE at progressive rates up to 26.5%, remit ITW-7 to BURS by the 15th each month, and submit ITW-10 annual return within 31 days of year-end.

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