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LSB2605 Assignment 2.
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LSB2605 Assignment 2[School]
[Course title]
, Question 1 ABC Electronics is a sole proprietorship that sells electronic
gadgets. The business’s total annual turnover is R1,600,000, of which 25% is
the cost price of the equipment it stocks. The owner recently hired two
employees and wants to ensure that he complies with labour laws. 1.1) With
which two bodies must ABC Electronics register as an employer? (2)
ABC Electronics must register as an employer with the following two bodies:
1. South African Revenue Service (SARS): This is the tax authority in South
Africa. ABC Electronics needs to register with SARS for tax purposes,
including withholding and remitting income tax and other relevant taxes on
behalf of its employees.
2. Department of Labour (DoL): ABC Electronics should register with the
Department of Labour to ensure compliance with labor laws, including the
Basic Conditions of Employment Act and other relevant employment
legislation. This registration helps in protecting the rights of employees and
ensuring fair labor practices.
By registering with these bodies, ABC Electronics can meet its legal
obligations as an employer and provide a safe and lawful working
environment for its employees.
1.2) Is ABC Electronics required to withhold taxes on behalf of its employees?
Explain ABC’s duties fully. (4)
Yes, ABC Electronics is required to withhold taxes on behalf of its employees. The
company has certain duties related to tax withholding and reporting. Here are ABC
Electronics' duties explained fully:
1. Income Tax Deduction: ABC Electronics must deduct income tax from its employees'
salaries or wages based on the applicable tax rates. The company needs to determine
the correct amount of tax to be withheld using the employee's tax information, such as
tax codes and declarations.
2. PAYE (Pay-As-You-Earn) Submission: The company is responsible for submitting
PAYE declarations to the South African Revenue Service (SARS) on a monthly basis.
These submissions report the amount of income tax withheld from employees' salaries
and wages.
3. UIF (Unemployment Insurance Fund) Contributions: ABC Electronics is also
required to deduct UIF contributions from employees' salaries. UIF is a government
program that provides financial support to workers who become unemployed. The
company needs to register for UIF with the Department of Labour and ensure that the
correct amount is deducted and remitted.
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