Botswana has published the Income Tax Act, 2026 and the BURS Tax Table and Guidance Notes, both effective 1 July 2026. Together, these introduce significant changes to employment income, PAYE withholding, tax rates, director's fees and the valuation of employer-provided benefits.
We have prepared a comprehensive document outlining all legislative and guidance changes affecting employment income and payroll.
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• The Act replaces the previous broad definition with a detailed statutory list of employment income, including wages, salary, overtime, leave pay, stipends, commissions, bonuses, gratuities, allowances, reimbursements, non-cash benefits, pensions and termination payments.
• Allowances and reimbursements now have clearer inclusion rules, with the Minister empowered to prescribe reasonable limits.

Tax brackets revised

• Residents: Tax-free threshold increased from BWP 30,000 to BWP 48,000. Top marginal tax rate increased from 25% to 27.5% on annual taxable income above BWP 400,000.
• Non-residents: Top marginal tax rate also increased to 27.5%, while remaining taxable from the first Pula.

PAYE reporting deadlines

• Monthly PAYE payments must now be made within 14 days after the end of the month (previously 15 days).
• Annual PAYE returns must be submitted within 28 days after the end of the tax year (previously 31 days).

Director's fees

• Director's fees are no longer subject to PAYE.
• Separate withholding tax now applies:
• Resident directors: 10%
• Non-resident directors: 15%

Employee share schemes

• The grant of a share right or option is generally not taxable.
• Tax is triggered when shares are allotted or acquired.
• Where shares are subject to transfer restrictions, taxation is deferred until the restriction ends or the shares are disposed of.

BURS Tax Table and Guidance Notes
BURS has also published updated Tax Table and Guidance Notes, effective 1 July 2026, to support implementation of the Income Tax Act, 2026.
The updated guidance includes:

• Revised PAYE deduction tables reflecting the new tax rates and thresholds.
• Updated guidance aligned with the new employment income provisions.
• Comprehensive valuation rules for employer-provided housing, motor vehicles, loans, utilities, school fees and other non-cash benefits.
• Updated housing benefit tables and illustrative PAYE calculation examples.

For full details

• See attached: Botswana Income Tax Act, 2026