IBBZ Accounting

Chartered Accountants & Tax Specialist

 

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Modifying the 63-day rule on employee remuneration Section EA 4 of the Income Tax Act 2007

What is 63-day rule

A person is allowed a deduction for the amount spent on employing people. Payment related to employment could be in the form of wage and salary or payment of leaves. Section EA 4 says payment must be made within 63 days after the end of the income year. Any payment not made within 63 days after the of the income year, becomes income of the person for tax purposes. It means deduction is not allowed for the unpaid portion.

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