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PERSONAL INCOME TAX
What is it?
Income tax is the normal tax which is paid on your taxable income.
Examples of amounts an individual may receive, and from which the taxable income is determined, include;
Remuneration (income from employment) such as; salaries, wages, bonuses, overtime pay, taxable (fringe) benefits, allowances and certain lump sum benefits
Profits or losses from a business or trade.
Income or profits arising from an individual being a beneficiary of a trust.
Investment income, such as interest and foreign dividends.
Rental income or losses.
Income from royalties.
Certain capital gains.
Who is it for?
You are liable to pay income tax if you earn more than R70 700 in the 2014 year of assessment, and are younger than 65 years of age. If you are 65 years of age or older, the tax threshold (i.e. the amount above which income tax becomes payable) increases to R110 200. For taxpayers aged 75 years and older, this threshold is R123 350.
Where taxpayers receive remuneration which is less than R250 000, they may elect not to submit an income tax return, provided the following criteria are met:
Their remuneration is from a single employer;
Their remuneration is for a full year of assessment (1 March – 28/29 February);
No allowance was paid, from which employees’ tax was not fully deducted;
No further deductions need to be claimed or income declared.
The rates of tax chargeable on taxable income are determined annually by Parliament, and are generally referred to as “marginal rates of tax” or “statutory rates”. The rate of tax levied on an individual is set on a sliding scale which results in the tax increasing as taxable income increases. Every year, the Minister of Finance announces the rates to be levied by publishing the applicable tax tables during the annual budget speech.
What steps must I take to ensure compliance?
Step one: You must register for income tax.
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Step two: You must submit a tax return.
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When should it be submitted?
The deadline for all taxpayers will be published once this has been made available in the Goverment Gazette.
If you don’t submit your income tax return on time, you may be liable for penalties.
How should it be submitted?
Online: Let Compliance Hub do this for you.
In a branch: Why do you want to spend hours in a SARS branch waiting for someone to assist you.
Compliance Hub can assist!