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How does it work now if you just earn commission but tax and uif does not get deducted?



Danielle says:
16 February 2016 at 9:29

Hi. I used to work for company that deducted tax from my salary, so I'm a registered. But now I work for a company that does not deduct tax and I only get commission. My question is how do I claim my tax for my medical aid if I don't receive a IRP5?

How does it work now if you just earn commission but tax and uif does not get deducted?

TaxTim TaxTim says:
16 February 2016 at 13:45

If you are a permanent employee, and earning more than the tax threshold which is currently R73,650 per annum, then tax should be deducted each month by your employer and your company should issue you at year end with an IRP5 reflecting your earnings under source code 3606. If you only earn commission, then no UIF should be deducted.

Since your earnings will fluctuate each month, your employer could apply for a tax directive from SARS to deduct tax each month from you using a set rate (i.e. anything from 18% to 41%). You would be able to claim expenses to reduce your tax liability when you submit your tax return to SARS.

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