Upcoming Tax Deadlines

Tax Guide for Small Businesses

VAT

  • Enterprises with a turnover of less than R1 million in any period of 12 months are not obliged to register for VAT.
  • Enterprises with turnover of less than R50 000 in any period of 12 months are not permitted to register for VAT.
  • VAT returns are generally submitted on a two monthly basis unless turnover in any period of 12 months exceeds R30 million, in which case returns are submitted monthly.
  • Input VAT credits may only be claimed upon receipt of a valid tax invoice.
  • In order to be a valid tax invoice the name, address and VAT registration number of the recipient and supplier must appear on tax invoices where the VAT inclusive total exceeds R5 000.
  • Vendors may reclaim the VAT element on expenditure incurred for the purposes of making taxable VAT supplies except on entertainment, passenger vehicles and club subscriptions.

PAYE

Any Employee’s remuneration is subject to monthly deductions referred to as PAYE. Apart from salaries, commission etc. the following income /payments are also subject to PAYE:

  • 80% of any travel allowance reduced to 20% if the employer is satisfied that the employee travels at least 80% of the time for business.
  • Payments made to directors of private companies (including members of close corporations) in respect of services rendered.
  • Remuneration paid to labour brokers/personal service providers.
  • Annuities from Annuity Funds.
TAXABLE INCOMERATES OF TAX
R1 to R188 00018% of taxable income
R188 001 to R293 600
R33 840 + 26% of taxable income exceeding R188 000
R293 601 to R406 400
R61 296 + 31% of taxable income exceeding R293 600
R406 401 to R550 100
R96 264 + 36% of taxable income exceeding R406 400
R550 101 to R701 300R147 996 + 39% of taxable income exceeding R550 100
Over R701 300R206 964 + 41% of taxable income exceeding R701 300

UIF

Employers must pay unemployment insurance contributions of 2% of the value of each worker’s pay per month. The employer and the worker each contribute 1%.

The Unemployment Insurance Act and Unmployment Insurance Contributions Act apply to all employers and workers, but not to:

  • workers working less than 24 hours a month for an employer;
  • learners;
  • public servants;
  • foreigners working on contract who are going to be repatriated at the end of their contract;
  • employees in receipt of an old age pension are, since 07/02/2007, no longer excluded from contributing towards UIF; or
    workers who only earn commission.

SDL

A Skills Development Levy is payable by employers at a rate of 1% of the total remuneration paid to employees. Employers paying annual remuneration of less than R500 000 are exempt from the payment of the levy.

Provisional Tax

Provisional tax is payable by all natural persons who trade in their own capacity, own a business or have more than one source of income subject to the allowable SARS exemptions.

  • Natural persons exempt from making provisional tax payments:
  • Natural persons under the age of 65 who do not carry on business and whose taxable income will not exceed the tax threshold or whose taxable interest, foreign dividends and rental income will not exceed R20 000.
  • Natural persons over 65 years of age not carrying on a business (excluding rental from letting of fixed property) with a taxable income not exceeding R120 000.

The first provisional tax payment is due six months before the end of the tax year. The payment must be based on the basic amount or a lower estimate approved by SARS.

The second provisional payment is due on the last day of the tax year. The payment must be based on as estimate of the taxable income for the year. The following two tier model is in force:

  • taxable income less than R1 million, the estimate must be equal to the lessor of the basic amount or 90% of the actual taxable income, or
  • taxable income greater the R1 million, the estimate must be equal to at least 80% of the actual taxable income.

The third provisional payment is due 6 months after a taxpayer’s year-end. In the case of a taxpayer with a February year-end, the “top-up” payment can be made by the end of September every year.