The 2027 Budget and Your Salary
Presented to Parliament on 6 November 2026 by Dr Situmbeko Musokotwane, Minister of Finance and National Planning. A K284.8 billion budget for 1 January to 31 December 2027.
The one PAYE change is a new 39.5% band on income above K37,000 a month. Pay of K37,000 or less is taxed as before. VAT rises to 16.5% and the mobile money levy doubles. The measures apply from 1 January 2027.
These changes apply from 1 January 2027
Until then payslips and the calculator use the 2026 bands. The calculator moves over on 1 January 2027.
What the 2027 budget announced
A new 39.5% PAYE band above K37,000 a month
Income above K37,000 a month will be taxed at 39.5% instead of 37%. Only the part above K37,000 pays the higher rate, so someone earning K50,000 pays K325 more PAYE a month. If you earn K37,000 a month or less, your PAYE does not change.
The tax-free threshold stays at K5,100
The first K5,100 a month is still tax free, and the 20%, 30% and 37% bands are unchanged up to K37,000. For most salaries, PAYE in 2027 is the same as in 2026.
No change to NAPSA or NHIMA
Neither the speech nor ZRA's highlights change the NAPSA or NHIMA rates or the Skills Development Levy. The NAPSA ceiling for 2027 is a separate announcement from NAPSA, usually in January.
Housing and car benefits cost employers more
Where an employer provides a house for an employee, the share of the cost the employer cannot deduct for income tax goes up to 40% from 37%. The disallowed amount for providing a car goes up by 10%. This is the employer's tax, not the employee's PAYE. Both are in the annex to the speech but not in ZRA's highlights, so the Finance Bill will give the detail.
VAT goes up to 16.5%
The standard VAT rate rises to 16.5% from 16%. VAT-registered businesses will need to update prices and invoicing for 1 January.
The mobile money levy doubles
The levy on mobile money transactions doubles at every level. On K150 or less it goes to K0.64 from K0.32. On K1,000 to K3,000 it goes to K8 from K4. On K5,000 to K10,000 it goes to K16 from K8.
Higher company tax on income now taxed below 30%
Company income tax rates below the standard 30% go up by 5 percentage points. Farming and agro-processing goes to 15% from 10%. Fertiliser producers, exports of non-traditional products, and companies adding value to copper cathode go to 20% or 25%.
New excise duty on sugar and sweets
Sugar will carry excise duty of K1 a kilogram, and chocolate and sweets 20%. Excise duty on single-use plastics doubles to 200%, and plastic bottles will carry 80 ngwee each.
When it all applies
The measures take effect on 1 January 2027, subject to Parliament passing them. Pay for November and December 2026 is worked on the 2026 bands.
What it means for your pay
PAYE a month on the 2026 bands and on the 2027 bands, for the same gross salary. NAPSA and NHIMA are not part of the budget and are left out. Work out your own on the calculator.
| Gross a month (K) | PAYE 2026 | PAYE 2027 | Change |
|---|---|---|---|
| K 5,000.005,000 | K 0.000 | K 0.000 | No change0 |
| K 10,000.0010,000 | K 1,326.001,326 | K 1,326.001,326 | No change0 |
| K 25,000.0025,000 | K 6,876.006,876 | K 6,876.006,876 | No change0 |
| K 37,000.0037,000 | K 11,316.0011,316 | K 11,316.0011,316 | No change0 |
| K 40,000.0040,000 | K 12,426.0012,426 | K 12,501.0012,501 | +K 75.0075 |
| K 50,000.0050,000 | K 16,126.0016,126 | K 16,451.0016,451 | +K 325.00325 |
| K 100,000.00100,000 | K 34,626.0034,626 | K 36,201.0036,201 | +K 1,575.001,575 |
Change is a month. A plus is more tax, so less take-home pay.
PAYE bands for 2027
| Monthly income (K) | Rate |
|---|---|
| First K5,100First 5,100 | Tax free |
| K5,101 to K7,1005,101 to 7,100 | 20% |
| K7,101 to K9,2007,101 to 9,200 | 30% |
| K9,201 to K37,0009,201 to 37,000 | 37% |
| Above K37,000Above 37,000 | 39.5% |
Other budgets
- The 2026 budget, read on 26 September 2025
- The national budget and your salary: the bands in force and how the budget reaches your payslip
Bands from the same configuration the calculator runs on. Source: Zambia Revenue Authority (ZRA); cross-checked against PwC Worldwide Tax Summaries and KPMG Zambia budget highlights. Nothing here is tax advice. Confirm your position with ZRA or a registered tax agent.