So you’ve received your first payslip, and seen that big chunk of cash as a deduction, under the heading ‘Tax’. After having your minor freakout about how much of your salary you’re giving away each month, you’ve hopefully come to terms with it. Because, as much as it sucks, we all just have to do it. But maybe you’re not sure how it works, or what your role in paying your taxes is, or what all these weird terms mean. Well don’t stress – we got you. Take a look at our frequently asked tax questions and get clued up.
When do I need to start paying tax?
Anyone who earns an income in South Africa from a salary, commission, rental income, etc has to pay tax. However, if you earn less than R350 000 for a full year from one employer (that’s your total salary income before tax) and have no other sources of additional income (such as interest or rental income) and no deductions that you want to claim (such as medical expenses, travel or retirement annuities), then you don’t need to submit a return.
How do I register to pay tax?
The only way to register as a taxpayer is by visiting a SARS branch near you with your proof of identity (valid identity card/document or driving licence – certified copies are also allowed), proof of address and proof of banking details. You will receive an email confirmation of registration with your new tax number once you’ve registered. If you are unsure about anything, you can call the SARS Contact Centre on 0800 007 277.
What is PAYE?
PAYE is often a catchphrase thrown around by those well versed in tax. For the rest of us, we only hear it once in a while. It stands for pay-as-you-earn and simply means that you pay tax to SARS monthly when you receive your salary, instead of at the end of the tax year. Employers withhold tax from each employee monthly and pay these monies over to SARS.
The IRP5 is pretty much the most important tax document there is for those who get monthly salaries. This important document details all your earnings, deductions and the tax your employer has already paid over to SARS for the tax year. Employers have a legal duty to create an IRP5 on your behalf or face serious penalties, and you must submit it as part of your tax return.
How do I file a tax return?
There are a few ways you can file your tax return – you just need to find the one most convenient for you:
- You can post your tax return to SARS (maybe a little risky, and super old school).
- You can take all the necessary documents to a SARS branch close to you.
- You can register to pay your taxes online through the SARS e-filing system.
- You can hire a tax consultant to file your tax return for you.