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Not everything you hear about tax is true. There are many myths and misconceptions about payroll tax in South Africa that simply won’t go away. Let’s look at a few of them and what the tax and labour laws actually say. No matter whether your employer calls what it pays you a salary, overtime or commission, it is taxed at the same rate on the payroll according to the standard PAYE tax tables.
You may owe SARS money next year if you receive a travel allowance and aren’t travelling for business because of COVID-19. Most employees have travelled less for business this year than they would in the pre-COVID-19 world.
Starting a new job in an employee’s career is usually an exciting event with the additional prospect of increasing their earning potential in most cases. With the evolution of payroll systems over the years, it is natural to accept that there should not be any discrepancies between what an employee has been offered and what he receives when they obtain their first payslip.
National Treasury has published another draft bill to formalise the tax relief measures available in response to the devastating covid-19 pandemic. It is hoped this will clarify uncertainty and offer some relief during these tough times.
President Cyril Ramaphosa presented the five-level, risk-adjusted strategy that will guide South Africa’s emergence from lockdown. As the finer points of the strategy were shared, it became clearer how - and when - certain sectors will once again gear up into activity.
Automation can help businesses decrease the R7.2 billion lost to admin. We’re racing towards the end of another tax year and we have heard about the Finance Minister’s proposed changes for the 2020/21 tax year. Not too long after Minister Tito Mboweni unveils changes to PAYE and other taxes during his budget speech on 26 February, the season for Employer Annual Reconciliations will open.
Given the worsening economic realities still facing the Minister of Finance this year, it came as a pleasant surprise that he provided 5.2% adjustments to the individual tax brackets and rebates, resulting in real personal income tax relief for the already stretched individual taxpayers.
We often receive queries about pay slips. Many times, these queries stem from employees not understanding how their salaries and wages are structured, as well as uncertainty about salary codes. There are two types of pay slips - the pre-employment ‘dummy’ pay slip and monthly pay slips. The ‘dummy’ pay slip should include an estimation of what you will be earning along with a detailed explanation.
You, as the taxpayer, are responsible for declaring the correct information to SARS and will face the consequences if you don’t. Ensure that your tax practitioner declares all income by providing all the correct information to him or her.
The tax implications of running a business are not widely taught in the South African education system. This is why many entrepreneurs are not well equipped to deal with the taxation side of their businesses in an informed manner.
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