Keeping you updated
As specialists in Human Resource and Payroll Solutions, statutory compliance is essential. CRS is committed to always keep clients abreast of legislative changes, developments and the effects it has on industry.
Digital Tax Guide: 2019/2020 Budget
We have compiled a convenient document consisting of highlights from the 2019/2020 budget. Please click here to view or contact us if you require any assistance.
Digital Tax Guide: 2018/2019 Budget
We have compiled a convenient document consisting of highlights from the 2018/2019 budget. Please click here to view or contact us if you require any assistance.
Digital Tax Guide: 2017/2018 Budget
We have compiled a convenient document consisting of highlights from the 2017/2018 budget. Please click here to view or contact us if you require any assistance.
Digital Tax Guide: 2016/2017 Budget
We have compiled a convenient document consisting of highlights from the 2016/2017 budget. Please click here to view or contact us if you require any assistance.
PAYE Employer Filing Season
The annual reconciliation submission season for the period 1 March 2018 to 28 February 2019 is from 1 April 2019 to 31 May 2019.
All South African employers are required to reconcile and submit PAYE, UIF and SDL contributions for the period 01 March 2019 to 29 February 2020.
Employers are required to submit accurate employee tax certificates together with the EMP501 reconciliation for the year.
Returns
Individuals whose taxable income is only from a single employer and does not exceed R350 000 for the tax year are not required to submit tax returns.
Official Interest Rate
The South African Reserve Bank increased the repo rate by 25 basis points to 6.75% per annum with effect 23 November 2018. This means that the rate at which the SARB lends to your bank has risen 6.50% to 6.75% per annum.
Employers must take note that it affects their official interest rates on payrolls and this increased to 7.75 %. Please adjust it effective 1 December 2018.
Definition of “official rate of interest”
The definition of “official interest rate” in the Seventh schedule of the Income Tax Act means:
- In the case of a loan which is denominated in the currency of the Republic, the South African repurchase (repo) rate + 100 basis points; or
- In the case of a loan which is denominated in any other currency, the South African repurchase rate applicable in that currency +100 basis points.
Where a new repurchase rate or equivalent rate is determined, the new interest rate applies for the purposes of this definition from the first day of the month following the date on which that new repurchase rate or equivalent rate comes into operation.
COIDA
R458 520 per annum with effect from 1 March 2019
R430 944 per annum with effect from 1 March 2018
R403 500 per annum with effect from 1 April 2017
R377 097 per annum with effect from 1 April 2016
R355 752 per annum with effect from 1 April 2015
R332 479 per annum (1 April 2014 – March 2015)
R312 480 per annum (1 April 2013 – Feb 2014)
R292 032 per annum (1 April 2012 – Feb 2013)
R277 860 per annum (01 March 2011 – Feb 2012)
R261 893 per annum (01 April 2010 – Feb 2011) Gazette 32903: This results in a split reporting year unless otherwise changed to 01 March 2010 as been practice for the last couple of years.
R239 172 per annum (01 March 2010)
BCEA
BCEA earnings threshold remains R205 433 per annum for the 2019/2020 tax year
Earnings threshold – R205 433.30 per annum (July 2014)
Earnings threshold – R193 805 per annum (July 2013)
Earnings threshold – R183 008 per annum (July 2012)
Earnings threshold – R172 000 per annum (July 2011)
Earnings threshold – R149 736 per annum (March 2008)
SDL
Payroll Threshold remains at R500,00.00 per annum – 1% Employer Contribution
UIF
The UIF earnings limit for Payroll purposes remains the same.
The UIF earnings limit was increased from R149 736 to R178 464 per annum or R12 478 to R14 872 per month with effect from 1 October 2012.
Travelling Allowances
With effect from 1 March 2010, 80% of a travel allowance is subject to the deduction of employees’ tax. With effect from 1 March 2011, an exception is allowed in cases where the employer is satisfied that at least 80% of the use of the motor vehicle will, during the year of assessment be for business purposes, then only 20% of the allowance is subject to the deduction of employees’ tax.
Employees must, in order to claim travel expenses for business purposes against this allowance when completing their income tax returns, keep a record of actual business distances travelled (e.g. a logbook).
With effect from 1 March 2018, reimbursement exceeding the rate of R3,61 per kilometre must be included as remuneration to calculate the amount of employees’ tax to be withheld. Please note the 12 000 kilometre parameter has been removed for the purpose of calculating employees’ tax but will be applicable upon assessment.
The full travel allowance must be reflected under the prescribed codes on the IRP5/IT3(a) tax certificates as described in the PAYE-GEN-01-G13 Guide for Employer in respect of Employees Tax for 2019, Revision 1 Page 5 of 42.
Motor Vehicle
EMPLOYER-PROVIDED MOTOR VEHICLES
There is no change to the taxable value per month and the rates remain the same for the 2019/2020 tax year.
80% of the fringe benefit must be included in the employee’s remuneration for the purposes of calculating PAYE. The percentage is reduced to 20% if the employer is satisfied that at least 80% of the use of the motor vehicle for the tax year will be for business purposes.
Where the vehicle is owned by the employer, the taxable value is 3.5% of the determined value (vehicles purchased before 1 March 2015: the cash cost including VAT; vehicles purchased on/after 1 March 2015: the retail market value) per month of each vehicle.
Where the vehicle is rented by the employer, the monthly taxable value is equal to the actual costs incurred by the employer under the lease as well as the cost of fuel for the vehicle.
Where the vehicle is the subject of a maintenance plan at the time that the employer acquired the vehicle, the taxable value is 3.25% of the determined value.
Refer to SARS website for more details.
Reimburse Travel
- With effect from 1 March 2018, a simplified method intended to calculate the taxable portion of the travel imbursement has been introduced. The reimbursement exceeding the rate of R3,61 per kilometre must be included as remuneration to calculate the amount of employees’ tax to be witheld. Please note the 12 000 kilometre parameter has been removed for the purpose of calculating employees’ tax but will be applicable upon assessment.
- This alternative is not available if other compensation in the form of an allowance or reimbursement is received from the employer in respect of the vehicle.
Tax Deductible Donations
Donations to Section 18A approved public benefit organisations are exempt from tax and deductible for income tax if the donation is supported by the necessary section 18A receipt issued by the organisation or, in certain circumstances, by an employees’ tax certificate reflecting the donations made by the employee.
Limitation of donations are as follows:
- Individual donations limited to 10% of taxable income excluding any retirement fund lump sum benefits
- Company donations limited to 10% of taxable income
- Any excess above the 10% cap may be rolled over to subsequent years
Subsistence Allowance
- Where the recipient is obliged to spend at least one night away from his / her usual place of residence on business and the accommodation to which that allowance or advance relates, is in the Republic and the allowance/advance is paid or granted to pay for:Meals and incidental costs, an amount of R435 (previously R416) per day is deemed to have been expended or:
Incidental costs only, an amount of R134 (previously R128) per day is deemed to have been expended.
Medical Credits and disability expenses
An employee is entitled to a medical tax credit in respect of medical scheme contributions paid by the employee, irrespective of the employee’s age.
- Taxpayers may deduct from their tax liability a tax credit of R310 for the first two beneficiaries and R209 for each additional beneficiary.
An additional medical expenses tax credit related to medical scheme contributions for taxpayers above the age of 65 must be taken into account to calculate the monthly PAYE.
- In the case of an individual who is 65 and older, or if an individual, his or her spouse, or his or her child is a person with a disability, 33.3% of the sum of qualifying medical expenses paid and borne by the individual; and an amount by which medical scheme contributions paid by the individual exceed 3X the medical scheme fees tax credits for the tax year; or
- Any other individual, 25% of an amount equal to the sum of qualifying medical expenses paid and borne by the individual, and an amount by which medical scheme contributions paid by the individual exceed 4X the medical scheme fees tax credits for the tax year, limited to the amount which exceeds 7.5% of taxable income (excluding retirement fund lump sums and severance benefits).
Tax Deductible Deductions
- Amounts contributed to pension, provident and retirement annuity funds during a tax year are deductible by members of those funds;
- The deduction is limited to 27.5% of the greater of remuneration for PAYE purposes or taxable income (both excluding retirement fund lump sums and severance benefits); and
- The deduction is limited to a maximum of R350 000;
Note: The above limit is applied to the employee contributions towards all retirement funds and not separately to each fund.
- Amounts contributed by employers are taxed as fringe benefits;
- Amounts contributed by employers and taxed as a fringe benefit are deemed to be contributions by the individual employee;
- Any contributions exceeding the limitations are carried forward to the next tax year and are deemed to be contributed in that following year. The amounts carried forward are reduced by contributions set off when determining taxable retirement fund lump sums or retirement annuities.
Tax Rates
Individuals & Trusts
Tax Rebates
Tax Thresholds
Retirement fund lump sum withdrawal benefit
Retirement fund lump sum benefits or severance benefits
Tax-Free Savings Account
Contributions to all tax-free savings accounts will be limited to R33 000 during any year.
EMPLOYMENT TAX INCENTIVE
The Employment Tax Incentive Act came into effect on 1 January 2014 with the aim to encourage employers to hire young and less experienced work seekers. The incentive will come to an end on 28 February 2029.
The definition of “employee” in the ETI Act has been aligned with the definition of “employee” in the Labour Relations Act because the aim of the ETI is to assist in creating employment opportunities regulated by labour legislation.
Tax Amendment Act changed the calculation method of the ETI. If an employee is employed for less than 160 hours in a month, then he or she is deemed to have worked for a part of a month. Thus his or her remuneration must be grossed-up by using the ratio of the hours employed to 160 hours.
An employee is a qualifying employee if: –
The amount of the employment tax incentive in respect of a qualifying employee is determined as follows:
Employer Provided Residential Accommodation
A taxable fringe benefit arises where an employer provides an employee with residential accommodation either free of charge, or for a consideration which is less than the “rental value”.
The value of the benefit are, where the accommodation is owned by the employer or by an associated institution in relation to the employer, calculated with reference to a prescribed formula.
Public Holidays: 2019
| New Year’s Day | 1 January |
| Human Rights Day | 21 March |
| Good Friday | 19 April |
| Family Day | 22 April |
| Freedom Day | 27 April |
| Youth Day | 16 June |
| Workers’ Day | 1 May |
| Election Day | 8 May |
| National Women’s Day | 9 August |
| Heritage Day | 24 September |
| Day of Reconciliation | 16 December |
| Public Holiday | 17 December |
| Christmas Day | 25 December |
| Day of Goodwill | 26 December |
