Statutory Info

Individuals whose taxable income is only from a single employer and does not exceed R350 000 for the 2018/2019 tax year are not required to submit tax returns.

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)

Payroll Threshold remains at R500,00.00 per annum – 1% Employer Contribution

SARS PAYE Guide for Employers in respect of Employees Tax for the 2018/2019 tax year

EMPLOYER-PROVIDED MOTOR VEHICLES

There is no change to the taxable value per month and the rates remain the same for the 2018/2019 tax year. From 1 March 2015, the “determined value” of vehicles acquired, in any manner other than under an operating lease (as defined), on or after that date, will be the retail market value of such vehicle as determined by the Minister by Regulation.

If the vehicle was acquired under an operating lease (as defined) the monthly taxable value is equal to the actual cost to the employer incurred under that operating lease and the cost of fuel in respect of that vehicle.

The percentage rate for all employers-owned provided vehicles is 3.5 % per month of the vehicle’s determined value. However, vehicles with maintenance plans included within the purchase price at the time of purchase will trigger only a 3.25% monthly fringe benefit.

Where the vehicle is acquired by the employer under an operating lease concluded at arm’s length and that are not connected persons in relation to each other, the value of a fringe benefit is the actual cost to the employer incurred under this lease plus the cost of fuel in respect of that vehicle.

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.

Refer to SARS website for more details.

The Employer must pay the amounts deducted form the employee, in respect of donations, to the respective organization.

Limitation The deduction may not exceed 5% of the remuneration after deducting pension, provident and retirement annuity fund contribution.

Note: This deduction may only be allowed if the employer will be issued a receipt
which reflects the details as prescribed in section 18A(2)(a).

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 (previously R303) for the first two beneficiaries and R209 (previously R204) 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).

The Employment Tax Incentive Act came into effect on 1 January 2014. The initial effective period was three years but it was extended to end on 28 February 2019.

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.

• Permanent employment

The changes will have no impact for employees who work at least eight hours a day, five days a week since these employees will work 160 hours or more each month. It is only categories such as short time arrangements and mornings-only employment where the employed hours will contractually amount to less than 160 hours a month. In these cases, payroll systems will have to allow the employer to data capture the ‘contracted’ hours for qualifying employees who are employed for less than 160 hours pm.

• Temporary employment

The biggest challenge lies with temps and casuals, who work when they’re called in because there is work for them to do. In this case, it is debatable whether there is a difference between hours worked and hours employed. One can only assume that the hours employed are the same as the hours worked for that month.

This means that in order to be able to calculate the ETI benefit, the employer will have to record and capture the hours worked by each casual into the payroll every month. Without these hours, the payroll’s ETI calculation will not comply with the law. If this interpretation of the draft amendment is correct, it will mean a significant increase in the employer’s workload for casuals who qualify for the ETI.