We often receive questions from taxpayers as to how to structure their salary most efficiently for tax purposes. Unfortunately, the reality is that the days of employees gaining a tax advantage It’s that time of the year again and employers are issuing their employees IRP5s for the tax year. An IRP5 is a tax certificate which shows the total employment income that you earned for the tax year, the total employment related deductions that were taken from your income and paid over to either a retirement fund (pension, provident or retirement annuity fund) or a medical aid and the total tax (PAYE, UIF and SDL) that you paid... We receive many queries from confused taxpayers who are disappointed to see their tax refunds are smaller than the refund received last year. Taxpayers should breathe a sigh of relief as a much lower than expected R36bn in increased taxes was announced by the once-off Minister of Finance. The biggest news amongst the increases was the VAT rise of 1%. For the first time in 25 years, all South Africans will see most goods and services become a little bit more expensive thanks to the Value Added Tax rise. Although controversial, a VAT rise was much needed and will bring in almost R23... Individuals across the country, those qualifying above the new tax threshold of R75 750 (previously R75 000) will be paying increased taxes of R16.5bn (previously R5.65bn in actual tax increase) for the next tax year, most of this will be for high income earners, however. Taxpayers generally across the board will be earning the tiniest bit more money each year as their tax brackets... Are you the type of person dashing into the store to grab a birthday gift en route to a party? Or perhaps you’ve found yourself scratching through your craft box at 11pm the night before to make a ‘World Book Day’ outfit for your son? Or possibly you’re one of the hundreds of thousands of South Africans who waits until the last week of November to file your tax return? While I’m not suggesting that every minute of your life needs to be pre-planned and organised, there are certainly a number of benefits to getting your tax done early... The 24th of February 2016 was supposed to be a watershed moment for the Economy of South Africa. The old-new Minister of Finance, Pravin Gordhan, was to deliver his budget for the 2016/2017 tax year and save South Africa from a financial pit-fall in the form of an International Ratings Agency downgrade. The jury is still out on whether or not this is possible. Immediately after the budget was revealed the Rand tumbled 2%, which doesn’t bode well for market sentiment. However, ... Tax compliance makes its way into many aspects of life and business. Perhaps you’re considering applying for a tender, or for a foreign investment allowance to move funds offshore, or even looking to emigrate and leave our shores. These are just a few examples of instances where you may be asked by a third party to provide a Tax Clearance Certificate. And until now, the course of action to obtain your certificate has been a tedious one. Upon request, SARS would check its records and verify that the taxpayer had filed all required tax returns, paid all taxes, penalties and interest due, before releasing a Tax Clearance Certificate confirming a good standing... If you’re diligently putting money away for your retirement in the form of a pension, provident fund or retirement annuity, you may be curious – perhaps even a touch concerned – about the changes SARS has made to the retirement fund tax laws, which come into effect on 1 March 2016. If you missed the news, here's a quick overview. SARS have changed how contributions to retirement funds are treated from a tax perspective, as well as how your funds are managed when you retire...
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Top Questions on IRP5s
Posted 9 May 2019
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Why have I received a smaller tax refund from SARS this year?
Posted 23 July 2018
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What to expect after submitting your tax return to SARS
Posted 23 June 2018
As soon as tax season opens in July, many taxpayers rush to submit their ITR12 tax returns as early as possible, eagerly hoping for a nice refund.
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Budget Speech: VAT rises by 1%, predictions were correct!
Posted 21 February 2018
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2017/2018 Budget - The rich are going to pay more, but what does that mean for the rest of us?
Posted 22 February 2017
Personal Tax Rates (rates below)
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5 Great Reasons to File Your Tax Return Early This Year
Posted 24 May 2016
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2016 Budget Speech: Welcome Back, Minister! You Couldn't Have Returned Just for the Free Lunch?
Posted 25 February 2016
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2016/2017 Tax Tables
Posted 24 February 2016
Income Tax Tables for the 2017 Tax Year - 1 March 2016 to 28 February 2017
Income Tax Thresholds
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What You Need to Know About Changes to the Tax Clearance System
Posted 23 February 2016
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Retirement Funds Tax Laws Effective 1 March 2016 - How SARS' New Changes Affect You!
Posted 10 February 2016
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SARS Tax Tables 2015
Posted 26 February 2015
Tax Thresholds:
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Thank you Minister - we expected worse! 2015 Budget
Posted 25 February 2015
New Finance Minister Nene delivers his first budget with some “better than expected” tax increases. The fight against corruption was highlighted with the minster announcing a series of reforms and procedures to be introduced both to curb corruption and make doing business with the state easier. The minister announced that R25bn would be saved in expenditure over the next two years, but R16.8bn is to be raised this year via tax increases and a remarkably large rise in the fuel and road accident fund levies. To be honest, we expected greater tax increases from the minister, thankfully he spared us some of the pain! ...
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2014 Budget - A move to economic transformation
Posted 26 February 2014
In delivering what could possibly be his last annual budget and perhaps in an election year a very pragmatic one, Minister Pravin Gordhan painted a rather positive picture for the future of South Africa, whilst at the same time warning of the impact the global economy is having on the South African economy. He too, had a “good story” to tell of how well managed the economy is and how we have survived the economic downturn of the last half decade. The minister, like his predecessors b...
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Garnishee orders explained: How SARS can deduct penalties directly from your pay cheque and how to stop it
Posted 14 November 2013
The last days of the month are often the most exciting for employees as they look forward to spending their monthly pay cheques. Unfortunately for many taxpayers anticipation quickly turns to grief when the money they receive in their bank account is suddenly less than they had expected. Stress and anxiety then result in light of impending debit orders and monthly expenses that need to be paid.
Apart from the ordinary deductions that your employer takes off your salary each month - expenses for your benefit such as medical aid or a retirement / pension plan - there is another deduction that can take place unexpectedly: a garnishee order...
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SARS Tax Tables for 2014
Posted 4 July 2013
Tax rates for Individuals and Trusts
Income tax rates: Natural persons (that's you) and special trusts.
2013 tax year: 1 March 2013 - 28 Feb 2014.
Individuals and Special Trusts:
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Important Information for Surviving the SARS Outbreak
Posted 18 June 2013
From the office of the Center for Dis-Ease Control, 12 Bliksem Straat, Pretoria, South Africa
EPIDEMIOLOGICAL INFORMATION
Severe Anxiety from Revenue Services (SARS) is a common affliction affecting millions of South Africans in all major city centres every year. Historically, symptoms begin to present themselves in the winter season from 1 July and continue to increase in severity towards a statistical peak for the epidemic on 22 November every year...
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The effect of the 2013/14 annual budget speech on the average South African taxpayer
Posted 28 February 2013
It was with great enthusiasm that we at TaxTim awaited delivery by the Minister of Finance of his annual budget speech this afternoon, especially after some of the shocks experienced by taxpayers and tax professionals last year. Surprisingly he delivered a very mild budget in terms of individuals with the Minister stating, “No tax rises.” The main focus areas relating to tax in this budget speech were on compliance, tax evasion and big companies seeking to shift their income around the world in order to avoid higher taxes...
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Why employers should help their employees with tax
Posted 25 February 2013
Individual taxpayers have traditionally been told that when it comes to tax returns, they're on their own with regard to submitting each year and their employer does not need to get involved. Despite the employer making payment of PAYE (the majority of their tax liability) on their behalf, after handing over their IRP5 detailing this payment they resume business as usual and the employee is left to navigate the ever-challenging tax system on their own, without any assistance. Fortunately this attitude is changing as more companies recognise the benefits of helping staff with their tax matters.
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SARS Tax Tables for 2013
Posted 18 January 2013
Tax rates for Individuals and Trusts
Income tax rates: Natural persons (that's you) and special trusts.
2013 tax year: 1 March 2012 - 28 Feb 2013.
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How to manage your tax affairs running a business in your own name as a sole-proprietor
Posted 1 October 2012
South Africa is brimming with entrepreneurs and small business owners who keep the economy running. These people may or may not be earning a regular salary too, but all of them operate a non-registered business in their own name - a so-called sole-proprietorship. In this blog post we will discuss how such a business pays tax, how it is taxed, and how to separate personal and business affairs to make tax deductions correctly.
To register or not to register as a company?
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Why do I need to submit an Income Tax Return if my employer pays my Tax?
Posted 6 September 2012
A question often asked is, "If my boss pays over my tax then why do I have to do anything?"
If you earn below R160 000 per year, SARS does not require that you complete and submit an ITR12 tax return. HOWEVER SARS will charge you an admin penalty for not submitting a return AND if you don't mention all your deductions you can't maximise your potential refund. So rather submit a return every year and stay tax compliant. With TaxTim it's easy. Remember as well that SARS doesn't know everything about you so you need to tell them to maximise your potential refund!
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What to do if your second ITA34 assessment says you now owe SARS money
Posted 6 September 2012
If you have ever survived a SARS audit, you may have been issued with a "revised assessment" or second ITA34 that doesn't make much sense. It probably says that you now owe SARS some money, despite being due a refund. Don't be alarmed though, if you read lower down the new ITA34 you will find that in fact you are still due a refund, only it is probably smaller than before.
For example:
First IT34A (before audit):
SARS says: "Your assessment has been concluded and reflects an amount refundable to you of R-16 636.10"...
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SARS is asking for more documents. Are they auditing me?
Posted 13 August 2012
For most people upon submission of their year-end income tax return, either nothing much will happen or a refund will be due, this being paid back within a matter of days. However in a small number of cases SARS requires extra documentation or proof to be submitted so that they can verify that everything you submitted in your tax return is correct. Don’t be afraid, although many people consider this an “audit” it isn’t nearly as frightening as that and doesn't mean you have done anything wrong. A true audit would be SARS requesting years of past documentation and opening up for examination all your tax affairs from previous years. ...
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