2012 PAYE tax
All individuals; companies and trusts receiving an income and profits are obliged to pay income tax. It is how our Government “earns” its money. (Income Tax Act 58 of 1962),
There are a few methods of paying income tax, such as
- Provisional Tax
Every taxpayer’s assessment covers 12 months. For your average individual and trusts the year commences on the 1st of March and end at the end of February each year whilst companies and Close Corporatations follow their financial year cycle. Tax returns are made available annual at the end of each year and have to be completed and re-submitted to SARs within the stipulated deadline periods.
The tax season commences on the 1st of July of each year and the following deadlines for submissions area as follows:
- Individuals (ITR12) and Trust (IT12TR returns (non-provisional taxpayers) – Last working day of September for postal submissions; last working day in November for efiling.
- Individual (ITR12) and Trust (IT12TR) returns (provisional taxpayers) – 31st January to submit their completed ITR12 income tax returns to SARS.
- Company/CC (IT14) returns – Must be completed and submitted within 12 months after the financial year end of the company / close corporation.
Do you need to register for Income Tax?
In previous tax years people earning above a certain stipulated tax threshold had to register with SARS; however recently SARS requires all forms of employment income; including those below the tax threshold; to be registered in order to reduce the amount of non-compliance. Tax payers receiving remuneration less than R120 000 may select not to submit an income tax return; provided the meet the following criteria:
- They receive their income from a single source (employer)
- Their income is for the full year of assessment (March – February)
- No allowance was paid
How to register for Income Tax
In order to register as a tax payer and to be issued with a tax number you need to complete the IT 77 form . Once completed you then need to visit your nearest SARS branch and hand it in together with:
- A certified copy of your ID document or Passport (your drivers licence will not be accepted)
- Your bank details (cancelled cheque or certified copy of an original account statement
- A letter from your bank containing confirmation of your bank details
- Income details for the last 3 years. This would typically be companies of your IRP5s
Once you have been registered and given your tax number, you can then register on www.sarsefiling.co.za as a tax payer and fill out your returns online.
The budget 2011 which was delivered by Pravin Gordhan, Minister of Finance, on the 23 rd February 2011 offered or proposed some tax relief to individuals as a result of some adjustments to personal income tax brackets and rebates. The primary rebate was increased to R10 755 per year for all individuals. The secondary rebate applies to individuals aged 65 and over, is increased to R6 012 per year. A third rebate, applicable to individuals aged 75 years and over, is introduced at R2 000 per year.
The resulting income tax threshold, below which individuals are not liable for personal income tax, is increased to R59 700 of taxable income per year for those below the age of 65 and to R93 150 per year for those aged 65 and over. The tax threshold for individuals aged 75 years and over is R104 261.
From the 1 March 2011, Government increased the tax free interest income annual threshold from R22 300 to R22 800 for individuals below 65 years and from R32 000 to R33 000 for individuals 65 years and over.
Foreign interest income threshold remained the same.
Furthermore travelling allowances have now been amended to 80% of the travelling allowance must be included in the employee’s remuneration for purposes of calculating their PAYE, as long as the employer is in agreement that 80% of the motor vehicle usage is for business purposes. Fuel and maintenance costs cannot be claimed if the employer has paid for these items. Log books are essential in order to record travel for business and personal usage.
Lastly, If you are looking to claim for a travel allowance, ensure that you read the rules and stipulations very carefully before hand.