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Turnover Tax Decision Tool
Turnover Tax vs Income Tax Calculator (2026)
Should your business pay 5% turnover tax or 30% income tax? Enter your numbers and get a clear recommendation — plus a decision matrix showing how the answer changes at different profit margins.
Turnover Tax vs Income Tax
Find out which tax regime saves your business more money
Tax Comparison Results
Decision Matrix: How Profit Margin Affects Your Choice
| Profit Margin | Expenses | Turnover Tax | Income Tax | Better Option |
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Turnover Tax Exclusions
Consultancy fees, interest, dividends, and mining income are excluded from turnover tax. If your income falls into these categories, you must pay income tax regardless of turnover.
Filing Schedule
Turnover tax is filed quarterly by the 14th of the month following the end of the quarter. Income tax is assessed annually with provisional payments due quarterly.
Key Facts
Turnover Tax vs Income Tax at a Glance
5% on Gross Turnover
Turnover tax is charged at 5% on your total revenue — no deductions for expenses. Simple to calculate and file, ideal for businesses with high profit margins and low overheads.
K5,000,000 Threshold
Only businesses with annual gross turnover of K5,000,000 or less qualify for turnover tax. Once you exceed this threshold, you must register for and pay standard income tax at 30%.
Quarterly Filing by the 14th
Turnover tax returns are due quarterly by the 14th of the following month. Income tax requires annual returns with provisional quarterly payments — more complex but allows expense deductions.
Not sure which tax regime is right for you? M&J's tax advisors can review your situation — free initial consultation.
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Frequently Asked Questions
What is turnover tax in Zambia and who qualifies?
Turnover tax is a simplified tax regime for small businesses in Zambia with annual gross turnover of K5,000,000 or less. Instead of paying income tax on profits, you pay 5% on your total gross revenue. It is designed to reduce the compliance burden for small businesses by eliminating the need to track detailed expenses for tax purposes.
What is the turnover tax rate in Zambia for 2026?
The turnover tax rate in Zambia for 2026 is 5% of gross turnover. This applies to all eligible businesses with annual turnover not exceeding K5,000,000. The rate is applied to total revenue regardless of your expenses or profit margin.
When is turnover tax better than income tax?
Turnover tax is generally better when your profit margin is high (above approximately 17%). If you keep more than 83 ngwee out of every Kwacha earned, the 5% turnover tax will likely be less than paying 30% income tax on your profits. It also saves significant time on bookkeeping and compliance.
What types of income are excluded from turnover tax?
Consultancy fees, professional fees, rental income, interest income, dividends, royalties, and income from mining operations are excluded from turnover tax. Businesses earning primarily from these sources must pay standard income tax at 30% regardless of their turnover level.
How and when do I file turnover tax returns in Zambia?
Turnover tax returns are filed quarterly through the ZRA TaxOnline portal. Returns and payment are due by the 14th of the month following the end of each quarter. The quarters run January-March, April-June, July-September, and October-December. Late filing attracts penalties and interest.
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