The TEVET Levy funds the all programmes that drive the TEVET System in Malawi. The programmes under the TEVET System include the following:

1. All Training Programmes such as:
   • Private Sector Training Programme;
   • Apprenticeship Training Programmes;
   • Informal Sector Training and Development.
2. All Quality Assurance Programmes such as:
   • Standards and Curriculum Development Programme;
   • Assessment and Certification Programmes;
   • Registration and Accreditation of TEVET Providers.
3. Research, Planning, Monitoring and Evaluation Programmes to cover:
   • Research Activities under TEVET;
   • Planning and Monitoring Programmes;
   • Evaluation of Training Programmes;
4. Fund Management Programmes;
   • TEVET Levy Collection
   • Fund Disbursement
   • Accounting Functions
5. Audit Services;
6. TEVET Service Centres
7. Other TEVETA activities.

In terms of TEVET levy payments, employers are encouraged to carry out self-assessment of their payroll information. This is 1% of the gross annual emoluments of basic payroll that employers spend on their employees.

Benefits of Paying TEVET Levy

Mr. Frank Chakanga HRM Toyota MalawiHere is a testimony from Mr.Frank Chakanga regarding the benefits that a company receives in return as been a TEVET Levy compliant.

Any  levy  imposed  and  paid under TEVET Act, shall be deductible under the purpose of ascertaining the taxable income of the employer in accordance with the Taxation Act

-    Access to reimbursement of 33% of training cost of approved TEVETA training programmes being provided within all sectors of the economy.
-  Access to quality assured training programmes and short course meeting the specific needs of employees
-  Access to qualified skilled and accredited labour force

What is TEVET Levy?

In accordance with section 20 (2) of TEVET Act, TEVET Levy (payroll-levy) is defined as the sum of money payable to TEVETA by all employers in the private and public sector. This sum of money is equal to one percent (1%) of the basic payroll (defined as gross annual emoluments) which an employer pays in respect to the previous financial period of July to June.

What is basic payroll?

This is the total annual emoluments paid by employer to employee. This includes basic salary, overtime, and all cash benefit ascertained in monetary terms on the payroll less allowable deductions.

How is the levy financial year determined?

The Levy financial year is a period of 12 months conmencing on 1st July to 30th June of the follwing year. TEVETA collects the levy from employers for each levy financial year on a previous year basis. For instance, TEVET Levy for the Company X for 2006/7 relates to payrol records of Compnay X for the period, 1st July to 30th June 2006.

What records should an employer keep?

According to Section 25 (1) of the TEVET Act, every employer should keep and maintain an up-to-date record of basic payroll in the prescribed form. The payroll records shall be of all employees in their employment and such records shall, at all reasonable times, be available for inspection by an inspector or other officer authorized on behalf of TEVET Authority.

The basic payroll in prescribed form would include standard records such as wages analysis books and/or electronic print-outs (and related support time sheets and similar documents) that are acceptable for PAYE purposes. These records are such that the Inspector of Taxes from Malawi Revenue Authority can ascertain total taxable income paid by employer to employee.

It is not necessary for employers to keep a separate record for TEVET levy purposes, as TEVETA inspectors can ascertain total basic annual emoluments paid by employer to their employees for purposes of levy on the basis of the record mentioned above.

When should an employer pay the TEVET levy to TEVETA?

At the beginning of each levy financial year (July), each employer is required to submit the Employer Data Form (EDF) duly completed with summarised payroll information of their previous financial year from July of the previous year to June of that year. The TEVET levy payable can then be computed at one per-centum of the total amount and paid to TEVETA. When the EDF is received by TEVETA, an invoice is sent to the employer using the information provided by an employer in the EDF. The Invoice is sent just to confirm the workings of the TEVET levy due and for which the employer may have already paid when submitting the EDF. TEVETA, however, reserves the right to carry out a payroll inspection to confirm or to correctness of any information that might have been shown on the EDF earlier submitted.

Mode of payment

Section 20 (4) of the TEVET Act gives options to the employer to pay the levy in a period most suited to their cash flows position. The Act gives employers the option of paying lump sums or biannually, quarterly, or monthly.

What are penalties for non compliance?

As stipulated in the section 21 of the TEVET Act, an additional sum of 20% of unpaid levy shall become due and be payable by employer by way of penalty.
Any levy penalty payable by an employer shall be a debt due to authority and may be recovered from such employers as a civil debt by a way of summary suit.

What is allowable levy deduction?

Employee's Pension Contributions and Employee's medical contribution towards an approved Medical Scheme.

How to calculate TEVET levy

See the template below for guidance.

PAY LEVY. TRAIN YOUR EMPLOYEES. YOU WIN.