A few years ago, SARS introduced a new section onto the Tax Return called “Unemployed Periods.” Taxpayers are required to complete this section by entering all the times within the tax year they were not working. For example, if a taxpayer did not work between 12 April and 31 May within a tax year AND they were unemployed from 23 September to 28 February then they would have to indicate both of these periods. SARS requires each time that a taxpayer was unemployed to be shown separately.

The reason for SARS introducing this new section was because previously taxpayers who did not work a full year were often assumed to have not informed SARS about other income earned. The return submitted only indicated that the taxpayer had worked part of the year, there was no space to show the rest of the time was spent unemployed and so SARS would just add on additional income. The taxpayer would then be assessed as having to pay SARS the additional tax and it became an administrative nightmare to clear up.

This section only applies to salaried employees. It does not apply to taxpayers who are self-employed for part or all of the tax year. These are taxpayers who run their own business or earn additional freelance income which is not reflected on an IRP5. For example, if you are employed from March to May and have an IRP5 for this period, and then freelance for the rest of the year, you would not need to complete this section.

With the introduction of the Unemployed Periods section this was all cleared up. However, it is very important that taxpayers make sure to complete this section of their return if they do not work a full year so that SARS knows what happened with the taxpayer for that tax year.

As a user of TaxTim you will be asked all the right questions in order to complete this section, we will even prompt you in case you have not completed the times spent unemployed before you submit your return to SARS.