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Thato says: 7 May 2024 at 13:07 I'm an independent contractor working remotely for an international company. The company is not obligated to pay my tax, therefore I need to do it myself. However, I'm not sure what the process entails. Please can you offer help? |
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TaxTim says: 7 May 2024 at 14:48 Individuals who earn income in this manner are considered self-employed and are responsible for handling their own taxes. One requirement is to register for provisional tax, which involves estimating your income for the tax year and paying tax twice a year. This helps to prevent a large tax bill at the end of the tax year. Provisional tax is not a special separate type of tax, but simply a mechanism to pay your taxes during the tax year instead of having a large amount due to SARS on assessment when you submit your Income Tax Return (ITR12). Provisional tax is paid by individuals who earn income other than a salary / traditional remuneration paid by an employer. This is because they don't pay tax via PAYE (employees tax), like salaried employees. In addition to provisional tax payments, self-employed individuals typically need to file an annual tax return, which is called an Individual Tax Return (ITR12). This tax return summarizes their income and expenses for the year, and calculates the final tax liability. It is important for self-employed individuals to keep accurate records of their income and expenses throughout the year to ensure they can accurately report their tax obligations. Remember as well, that you can deduct any business related expenses that relate to earning this income, but these expenses must relate to the income and not be of a personal nature. We recommend reading our guide for more information on provisional tax and you can also make use of our SARS income tax calculator to calculate your tax due. |
