Income Tax Made Simple – PAYE and Provisional

(Last Updated On: August 17, 2018)

Income Tax Made SimplePART 1

Income tax made simple.  Many people will laugh when they read this as personal income tax is never simple.  There are lots of different allowances, fringe benefits, rebates and different forms to complete for different taxes.  Most people and business owners prefer not to get involved in this arduous process.  Instead, they enlist the help of an Accounting Officer or Tax Practitioner as they have a far better working knowledge than the average person.  It is, however important that we have at the very least a working knowledge of how the different income tax systems work.

I am doing this post in 2 parts.  This first post is an explanation of the different income tax mechanisms and the second post will be showing you the calculations used and what you should check before approving your income tax advice from your tax practitioner.

Tax Paying Individuals Fall into 3 Categories :

(1) Salaried employees: These are people earning remuneration (salaries, wages, bonuses, overtime, fringe benefits)

(2) Individuals earning income that is not remuneration (interest, dividends, rental, business income)

(3) Salaried employees AND individuals earning income that is not remuneration

SARS has 2 systems enabling taxpayers to prepay their taxes :

1.  Employees Tax (PAYE) :

For taxpayers earning remuneration (1)

2. Provisional Tax :

For taxpayers earning income that is not remuneration (2)


Taxpayers earning both a salary and income that is not remuneration would be subject to 1 and 2 above) (3)

1. Employees Tax (PAYE) :

Every single employee who earns a salary must be registered with SARS. SARS has enabled employers to register their employees.

Employers must submit a tax return once the current tax year is over.  See SARS website for dates.  Tax amounts and thresholds change from year to year (view SARS current tax tables) here.  A tax year for an individual runs from 1 March to 28/29 February.  We are currently in the 2019 Tax year which started on 1 March 2018 and ends on 28 February 2019.

If you receive remuneration then you will pay PAYE every month.  Your employer will deduct tax from your remuneration every wage or salary cycle using the SARS deduction tables.  Annual bonuses, fringe benefits and certain deductions are all included in the calculation of your PAYE.

2. Provisional Tax :

If you receive income that is not remuneration, you will have to register as a provisional taxpayer (there are exceptions).  Your first provisional tax payment is due at the end of August. This is an estimate of what you expect to earn for the full year (from 1st March to the end of February) but it can’t be less than the “basic amount”.  The basic amount is what you earned the previous tax year.

Your second provisional tax payment is due at the end of February and is also an estimate for the full year.

There is a third provisional tax payment at the end of September but ONLY if necessary.  This is based on your actual amount earned less any provisional tax and PAYE paid during the year.

Income Tax Made Simple – PAYE and Provisional

Income Tax Made Simple

Watch out for the Part 2 of Income Tax made Simple – Know Your Calculations


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