PAYE in Malawi: MRA Tax Bands and How to Calculate It

If your PAYE went up this year in Malawi, you're not imagining it. The tax-free amount rose to MK170,000 a month, but the 25% band was scrapped, so tax now starts at 30% on everything above that.

The bands changed on 30 December 2025. Anyone earning more than about MK270,000 a month now pays more tax than before, and on MK500,000, PAYE is MK99,000.

MRA PAYE tax bands (monthly)

Sources: the Malawi Confederation of Chambers of Commerce and Industry, reporting the MRA Commissioner General's statement that the changes took effect on 30 December 2025, and Workpay's 2026 statutory changes summary, which cites the Taxation (Amendment) Act No. 36 of 2025.

Each rate applies only to the slice of income inside its band. Earning MK1,570,001 doesn't put all your pay at 35%, only the last kwacha.

What changed from the 2025 PAYE bands?

Until 29 December 2025, Malawi's monthly PAYE bands were:

These were the annual bands of MK1.8 million, MK6 million and MK30.6 million that took effect in April 2024, as PaySpace's payroll notice set out.

The new table does three things: it raises the tax-free amount by MK20,000, removes the 25% band so taxed income starts at 30%, and adds a 40% band above MK10 million. Most PAYE calculators and tables online, including many labelled "2026", still show the old 25% band.

Who pays more and who pays less since the change

The crossover point is MK270,000 a month. Below it, the higher tax-free threshold saves you money. Above it, losing the 25% band costs more than the threshold saves. Between MK500,000 and MK1.57 million, the increase is a flat MK11,500 a month.

How to calculate PAYE in Malawi: a worked example

Say you earn MK800,000 a month.

Your take-home pay before any pension or other deductions is MK611,000.

Steps for any salary:

1. Start with your monthly taxable income: salary plus taxable allowances and benefits.
2. Take off the first MK170,000. It's tax-free.
3. Tax the amount up to MK1,570,000 at 30%. The most this band can cost is MK420,000.
4. Tax the amount from MK1,570,000 to MK10,000,000 at 35%. The most this band can cost is MK2,950,500.
5. Tax anything above MK10,000,000 at 40%.
6. Add the bands.

Shortcut: if you earn between MK170,000 and MK1,570,000, PAYE = (salary − 170,000) × 30%.

PAYE and take-home pay at common salaries in Malawi

These figures are PAYE only. Your payslip may also show a pension contribution and other deductions such as loans or union dues. How your pension contribution is treated depends on your employer's scheme, so check with HR if the PAYE on your payslip doesn't match the table.

Common PAYE mistakes on Malawian payslips

• Payroll still on the old bands. If your January 2026 (or later) payslip shows PAYE at 25% on any part of your pay, your employer's system hasn't been updated. On MK500,000, the old bands give MK87,500; the correct 2026 figure is MK99,000. Under-deduction now means a bill later.
• Using an old calculator. Many "MRA PAYE calculator 2026" pages still use the MK150,000 threshold and the 25% band. Check that any calculator you use starts tax at MK170,000 and at 30%.
• Forgetting allowances. Cash allowances are part of your taxable pay. A MK100,000 transport allowance on top of a MK400,000 salary adds MK30,000 in PAYE.
• Assuming the 40% band affects you. It only applies above MK10 million a month. Very few salaries reach it.

Is the 40% PAYE band new?

The 40% top rate applies only to monthly income above MK10 million (MK120 million a year). Before December 2025, the top rate was 35%, and it applied from MK2,550,000 a month. In practice, the 35% band now starts lower (MK1,570,000), and the 40% band only touches the very highest earners.

Why the changes matter if you're paid in kwacha

When your salary rises to keep up with prices, more of it lands in the 30% and 35% bands, because the bands are fixed in kwacha. The higher tax-free threshold helps the lowest-paid workers, but most formal-sector employees earning above MK270,000 now pay a little more each month. When you negotiate a raise, work out the after-tax amount: between MK170,000 and MK1.57 million, you keep 70 kwacha of every 100 kwacha extra. If you save some of it, Malawi treasury bills start from MK10,000.

For comparison, Zambia taxes income above K9,200 a month at 37% and doesn't let pension contributions reduce PAYE; see our guide to PAYE in Zambia. In East Africa, Uganda's PAYE bands and PAYE in Tanzania follow the same slice-by-slice method with different thresholds. More guides for Malawi are on our Malawi page.

To run your own salary, use our MRA PAYE calculator and see your tax under the 2026 bands.

Frequently asked questions

What is the PAYE tax-free threshold in Malawi?

MK170,000 a month (MK2,040,000 a year). It rose from MK150,000 with effect from 30 December 2025. Income above it is taxed at 30%, 35% or 40%.

How much PAYE do I pay on MK500,000 in Malawi?

MK99,000 a month: 30% of the MK330,000 above the MK170,000 threshold. Under the old 2025 bands it was MK87,500, so it's MK11,500 more.

Was the 25% PAYE band removed in Malawi?

Yes. The 2025/26 Mid-Year Budget Review removed the 25% band from 30 December 2025. Taxed income now starts at 30%.

What is the highest PAYE rate in Malawi?

40%, on monthly income above MK10 million. Income from MK1,570,000 to MK10 million is taxed at 35%.

Do I pay more PAYE in 2026 than in 2025?

If you earn more than about MK270,000 a month, yes. Below that, the higher tax-free threshold means you pay less. At MK200,000, PAYE fell from MK12,500 to MK9,000.

Is there an MRA PAYE calculator?

The tables above give the 2026 PAYE for common salaries. For any amount between MK170,000 and MK1,570,000, multiply what you earn above MK170,000 by 30%. Check any online calculator against this; many still use the old 25% band.