Article by listed accountant Annja Louca
If you are earning a salary of R75 750 (2017: R75 000) per year or R6 312.50 (2017: R6 250) per month before deductions, you should be paying PAYE monthly on the salary you receive.
If you earn less than R6 312.50 (2017: R6 250) per month, you are not required to PAYE on a monthly basis. You will also not be liable for income tax when you submit your tax return at the end of the year.
Remember that every year the monthly tax free amount will change so make sure you double check before you assume that you don’t have to pay PAYE or income tax.
If you earn more than R6 312.50 (2017: R6 250) per month, you are liable to pay PAYE on a sliding scale.
You can find the income tax tables on the SARS website.
Susie earns R10 000 per month before deductions.
To calculate her monthly PAYE deduction:
R10 000 x 12month per year = R120 000 x 18% (as per table) = R21 600 – R13 635 = R7965 /12months = R663.75 PAYE per month.
Net salary per month = R9 336.25
Also, remember about UIF contributions. This is 1% of you gross salary per month that the employee needs to pay and 1% that the employer needs to pay.
Let’s use Susie’s scenario. She will need to pay 1% UIF per month. R10 000 per month x 1% = R10 per month.
Her net salary would be then = R10 000 – R663.75 – R10 = R9 356.25.
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