3. ī¨ Different tax liabilities for each employee
ī¨ Changes in taxation values and thresholds
ī¨ Taxation on sliding scale
ī¨ Tax rebates are discounts that ensure
individuals with a taxable income below a
certain level do not pay tax
ī¨ Rebates
īĄ Primary
īĄ Secondary
īĄ Tertiary
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
4. ī¨ Withholding tax
ī¨ End of every wage cycle
ī¨ Tax based on taxable remuneration received
from the employer for the wage/salary cycle
converted to an annual equivalent
ī¨ SARS deduction tables
http://www.sars.gov.za/Pages/Find-a-Publ.aspx?k=DEDUCTION%20TABLES
ī¨ Known as PAYE
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
5. ī¨ Income Tax Act required that correct amount of
tax is deducted from each employeeâs
remuneration every month and paid over to
SARS in the form of employeesâ tax (PAYE)
ī¨ Nearly everything employee earns is regarded
as taxable
ī¨ Most allowances are taxable â note company
car and car allowances. (80 % vs 20%)
ī¨ Fringe benefits are not part of earning but they
are nevertheless taxable
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
6. ī¨ Calculate PAYE on the balance of remuneration
after deducting:
īĄ Pension/retirement annuity fund (employer
deduction)
īĄ Pension/retirement annuity fund (employee
contribution)
īĄ Loss of earnings insurance policy paid by employee
īĄ All contributions to medical aid if employee over 65
īĄ Contributions to medical aid subject to limits for
employees under 65
īĄ Medical aid tax credits
īĄ Donations subject to provisions
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
7. ī¨ NB: employer cannot deduct any employee
contributions to a provident fund from the
balance of remuneration
ī¨ provident fund noun
an investment fund contributed to by employees, employers, and (sometimes)
the state, out of which a lump sum is provided to each employee on
retirement.
ī¨ Annual bonuses are taxed
ī¨ Ad-hoc payments are taxable at employeeâs
marginal rate
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
8. ī¨ Non-cash benefits
ī¨ Regular monthly earnings (fringe benefits):
īĄ Use of a company car
īĄ Low interest or interest free loans (subject to
requirements of National Credit Act)
īĄ Medical aid contributions (over & above amounts
allowable)
ī¨ Items treated at marginal rates:
īĄ Acquisition of asset at less than actual value
īĄ Free or cheap holiday accommodation
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
9. ī¨ Right of use of a motor vehicle
Must use a logbook:
http://www.sars.gov.za/AllDocs/Documents/Logbook/2014%20SARS%20Logbook.pdf
ī¨ 3.5 % determined value of the vehicle (less
anything paid by employee)
ī¨ 3.25 % if vehicle is subject to a maintenance plan
ī¨ Determined value =
īĄ Cost of vehicle (excluding finance charges & interest)
īĄ Cost of manufacturing vehicle
īĄ Termination of lease â retail value at time when employer
first used the vehicle
ī¨ 80% fringe benefit classified as remuneration OR
ī¨ 20% fringe benefit IF 80% of the use of the car for
business.
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
10. ī¨ Travel allowance
īĄ 80% fringe benefit classified as remuneration OR
īĄ 20% fringe benefit IF 80% of the use of the car for
business.
ī¨ Medical aid
īĄ From 1/3/12 full amount contributed by employer
included in taxable income (tax benefit)
īĄ Tax credits allowed
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
12. ī¨ Calculation of employeesâ tax (PAYE) is based
on the âBalance of Remunerationâ also known
as âTaxable Incomeâ (learn this template)
ī¨ Limits in terms of S11 (k) and S11 (n) regarding
Pension Funds deduction from remuneration:
īĄ The greater of
īē R1,750 or
īē 7,5% of retirement funding income
īĄ Disallowed portions cannot be carried forward
īĄ Arrear contributions maximum of R1,800 and may
be carried forward.
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
13. ī¨ Retirement annuities: Income from capital investment paid in a series of
regular payments (WordWeb)
ī¨ Greater of â
īĄ R1,750 or
īĄ R3,500 less pension fund deduction or
īĄ 15% non-retirement fund income after allowable deductions
īē except medical expenses & donations to PBO
īē Excludes Capital Gains
īē Lump sums from retirement funds
ī¨ Disallowed excess may be carried forward to new
year
ī¨ Arrear contributions maximum of R1,800. Excess can
be carried forward.
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
14. ī¨ Employee contributions to medical aid funds
(S18)
īĄ When employee makes contributions to medical aid
īĄ Allowable tax c redits
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
19. ī¨ Following information must be on payslip:
īĄ Employerâs name and address
īĄ Employeeâs name and job title
īĄ Period of payment
īĄ Amount of employeeâs pay
īĄ Amount and description of any deductions made
īĄ Actual amount paid to employee
īĄ Ordinary pay rate
īĄ Overtime pay rate
īĄ Ordinary hours
īĄ Overtime hours
īĄ Sunday/Public holiday hours
īĄ Averaging agreement hours where necessary
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
20. ī¨ Payslips to be provided to employee day of
payment or day prior to payment
ī¨ Deadline for wage employees is date of
payment
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
21. ī¨ Salaries usually paid anytime from 24th onwards
ī¨ Salaries paid for a monthly cycle
ī¨ Cut off dates for additions/deductions on payroll
ī¨ Wages paid weekly or fortnightly (usually on a
Friday)
ī¨ PAYE, SDL, UIF by 7th of the month or Friday
preceding the 7th.
ī¨ COID payments once a year
ī¨ Pension fund/medical aid deductions from
employees salary/wage paid on the day salaries
paid
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns