by Have you just entered the job market and need to learn how to file your taxes for the first time? Here’s what you need to know.
When Is Tax Season?
First things first, tax filing season for salaried employees run from 1 July to 30 November. The tax year ends on the last day of February. To file your taxes you will need an IRP5. To receive a tax return, you will need an ITR12.
Read more about perfectly acceptable tax deductions that you might not be claiming below
What Is An IRP5?
This form is completed by every employee once every tax year. It contains all your personal details, details of your earnings as well as all deductions made, i.e.: medical aid, pension, UIF, and PAYE.
Employers should begin filing and submitting the IRP5s for their employees on April 1, and are to be completed before May 31. Employees then need to start receiving their IRP5 forms from employers to begin filing their taxes.
What If My Employer Doesn’t Give Me An IRP5?
It is your employer’s duty to prepare and submit an IRP5, on your behalf, to SARS. If they have not and do not give you one, this should be reported to SARS. Every company that fails to do this will face penalties for not meeting its tax responsibilities as an employer.
Why Is Your PAYE So Important?
PAYE or ‘Pay As You Earn’ will be your biggest monthly contribution to SARS (South African Revenue Service). It is also known as ‘Employees’ Tax’. This is thought to be beneficial as it saves you paying between 18% – 40% of your income in a lump sum every year.
How Is It PAYE Calculated?
When your employer calculates your PAYE, your earnings are multiplied by 52 weeks, 26 weeks, or 12 months (depending on how often you get paid) to get an annual amount. It is then applied to the SARS tax tables to calculate your annual tax.
This is then divided again by the same work period to get the monthly PAYE tax, which is then withheld, displayed on your IRP5, and paid over to SARS.
Example: If you are under 65 years old, earn R10 000 per month and have no pension or provident fund, travel allowance, or road accident fund:
R10 000 x 12 (months) = R120 000 taxable income
R120 000 – R0.00 (deductions) = R120 000.
R120 000 – R663 (income bracket and age group) – R100(1% for UIF)
Take home salary = R 9236.25
Timeline Of The Tax Process
Does Everyone Need To Submit An Income Tax Return?
- You only have one employer (but remember, if you have two employers or income sources, e.g.: late spouse / partner pension income, exam markings income, rental income, moonlighting income, etc. you do need to file even if the total is still under R350 000).
- You have no car allowance or other income (e.g.: interest or rent).
- You are not claiming tax-related deductions (e.g.: medical expenses, retirement annuity contributions, travel expenses, etc.)
- You received interest from a source in South Africa not exceeding –
- R23 800 if you are below the age of 65 years;
- R34 500 if you are aged 65 years or older.
- Dividends were paid to you and you were a non-resident during the 2016 year of assessment.
Pravin Gordhan has revealed in the annual Budget Speech that those who earn over R1.5 million per annum will be taxed 45%. It was previously 41%.
Personal Income Tax Rates And Bracket Adjustments For 2017/18
| Taxable Income | 2016/17 | Taxable Income | 2017/18 |
| R0 – R188,000 | 18% of each R1 | R0 – R189 880 | 18% of each R1 |
| R188 001 – R293 600 | R33,840 + 26% of the amount above R188,000 | R189 881 – R296 540 | R34 178 + 26% of the amount above R189 880 |
| R293,601 – R406,400 | R61,296 + 31% of the amount above R293,600 | R296 541 – R410 460 | R61 910 + 31% of the amount above R296 540 |
| R406 401 – R550 100 | R96 264 + 36% of the amount above R406 400 | R410 461 – R555 600 | R97 225 + 36% of the amount above R410 460 |
| R550 101 – R701 300 | R147 996 + 39% of the amount above R550 100 | R555 601 – R708 310 | R149 475 + 39% of the amount above R555 600 |
| R701,301 and above | R206,964 + 41% of the amount above R701,300 | R708 311 – R1 500 000 | R209 032 + 41% of the amount above R708 310 |
| R1 500 001 and above | R533 625 + 45% of the amount above R1 500 000 |
