Summary
Summary Employee tax notes
- Course
- Taxation 3B (TAX3B)
- Institution
- University Of Johannesburg (UJ)
The notes are based on employee tax ,written in a simplified form for better understanding.
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Tax notesEmployees tax summary
Employee tax defini2on:
Employees tax refers to tax levied from the employee’s income on a monthly. In third year,
level calcula2on varies according to whether the scenario requests a monthly pay or a yearly
pay.
• Individuals who qualify to pay employees tax are natural people only.
• It is crucial for employers to be registered with SARS. For tax deduc2ons and to
ensure that they comply with Tax regula2ons.
• Employee tax is expected to be paid by the employer within 7 days payment of
remunera2on, every month for each year of assessment.
• Penal2es and levies will be charged if the employer fails to pay within the deadline.
Fourth Schedule
Fourth Schedule concerns with taxpayers (which are the employers), being responsible
for withholding tax on SARS’ behalf.
Special inclusion of defini2on of Remunera2on are financial executors of:
Benefit fund
Pension Fund
Annuity Fund
Provident fund
Re2rement annuity
Remunera2on is defined as all payments and amounts payable for serviced -rendered to
the employer.
Remunera2on includes salaries, wages, bonuses (performance and incen2ve), over2me
pay, commission, leave pay.
Excludes fees charges for the services from a professional, for example audits fees,
profile investment manager fees just to name a few.
Par2(2)- of the fourth schedule states that if the employees’ tax is excess than the
standard base amount, the employer is allowed to charge more if it receives an approval
request from the employee.
Par (9)-The commissioner has the right to prescribe tax deduc2on table.
Par (10)-
Par (11)-
Part 2me or non-standard employment
It is not standard or deemed standard as defined.
Compared to the standard employment (full 2me), part 2me employment is charged at a
fixed rate of 25%.
Late payment penalty
10% penalty is charged if employees’ tax is paid late.
If there’s underes2ma2on done to reduce paying taxes (tax evasion), or resulted due to
gross negligence, the interest rate starts from 10% up to 200%.
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