Mozambique PAYE Tax Guide 2026: Income Tax Brackets, Rates & Worked Examples

Mozambique PAYE Tax Explained

Mozambique's employment income tax — known as IRPS (Imposto sobre o Rendimento das Pessoas Singulares) — is administered by the Autoridade Tributária de Moçambique (AT). Known locally as 'retenção na fonte sobre rendimentos do trabalho' (source withholding on employment income), the PAYE system applies monthly. Unlike most African countries, Mozambique has no zero-rate band — income tax applies from the first Metical of earnings.

The combination of a MZN 1,800/year personal deduction and built-in bracket deductions (which convert marginal rates into a simple calculation formula) means effective rates are substantially lower than the headline rates suggest, particularly at lower incomes. Employees also contribute 3% of gross salary to INSS (Instituto Nacional de Seguridade Social) with no earnings cap. The Mozambican Metical (MZN) exchange rate is approximately USD 1 ≈ MZN 64 (mid-2026).

Mozambique Income Tax Brackets 2026

The following IRPS rates apply to resident employees in Mozambique for the 2026 tax year, as administered by the Autoridade Tributária de Moçambique (AT). IRPS is calculated on taxable income after the MZN 1,800/year personal deduction. Each bracket above the first includes a built-in deduction that converts marginal rates into a single formula: IRPS = (Taxable Income × Band Rate) − Built-In Deduction. Source: PwC Worldwide Tax Summaries — Mozambique (accessed June 2026).

The bracket formula simplifies payroll: for the 20% band, IRPS = (Taxable Income × 20%) − MZN 10,500. This produces the same result as summing each band individually but requires a single multiplication step. Non-residents pay a flat 20% on all Mozambique-source employment income with no deductions.

PAYE Worked Examples

These calculations first apply the MZN 1,800/year personal deduction (MZN 150/month) to arrive at taxable income, then use the bracket formula. INSS contributions (3%, no cap) are shown separately. All figures in MZN (Mozambican Metical).

Example 1: MZN 60,000/year gross (MZN 5,000/month)

• Personal deduction: MZN 1,800/year
• Taxable income: MZN 60,000 − MZN 1,800 = MZN 58,200
• IRPS (15% band, built-in MZN 2,100): (MZN 58,200 × 15%) − MZN 2,100 = MZN 8,730 − MZN 2,100 = MZN 6,630/year
• INSS (3%, no cap): 3% × MZN 60,000 = MZN 1,800/year
• Total deductions: MZN 8,430/year (14.1% of gross)
• Take-home: MZN 51,570/year (MZN 4,298/month)

Example 2: MZN 240,000/year gross (MZN 20,000/month)

• Personal deduction: MZN 1,800/year
• Taxable income: MZN 240,000 − MZN 1,800 = MZN 238,200
• IRPS (20% band, built-in MZN 10,500): (MZN 238,200 × 20%) − MZN 10,500 = MZN 47,640 − MZN 10,500 = MZN 37,140/year
• INSS (3%): 3% × MZN 240,000 = MZN 7,200/year
• Total deductions: MZN 44,340/year (18.5% of gross)
• Take-home: MZN 195,660/year (MZN 16,305/month)

Note that Mozambique's INSS has no earnings cap, making it proportionally more significant at higher incomes than capped schemes in neighbouring countries. Use the Mozambique tax calculator for a personalised figure.