Tax Tips
Tax can be a fine line to walk, between saving costs and staying compliant. Use these tax tips to help you.
Tax Thresholds
Tax Thresholds
- An individual can earn up to R87 300 per year without paying tax, this amount increases if there are RA or medical aid contributions
- A Company is taxed from the first R1 profit at 28%
Turnover Tax
Turnover Tax
- Turnover tax applies to both Sole Proprietors and Micro Businesses that had less than R1 million in Qualifying Turnover for the last 12 months
- A “personal service” company can not apply this tax table
- Here you will be taxed only on your income earned between 0% and 3%
- Speak to your accountant first
Deductible Expenses
Deductible Expenses
- Deductible expenses are only for Commission Earners, Sole Proprietors and Businesses, it is not available to salary earners. Examples of deductible expenses include, Home Office, Office Supplies, Website costs, Accounting, Advertising, Software Purchases, Entertainment*, Cell Phone expenses, Printing and Stationery, Bank Charges, Travel Expenses*
- Personal expenses can not be deducted
Donations
Donations
If a donation is made it is only tax deductible if a S18A certificate is received (limited to 10% of taxable income)
Other Tax Submission Dates
Other Tax Submission Dates
- VAT returns (VAT201) need to be submitted by the end of the following month (if done with efiling) that the VAT period ends.
- PAYE/UIF/SDL (EMP201) returns need to submitted by the 7th of the following month for which they relate.
- PAYE/UIF/SDL (EMP501) reconciliations need to submitted in August and February of each year to reconcile the tax payments made to the specific employees.
SARS R500 000 Tax Threshold
SARS R500 000 Tax Threshold
- This is not the threshold before a person needs to pay tax.
- This amount is the minimum amount a salary earner has to make before it is a requirement to submit a tax return
- It only applies to salary earners and not persons operating as a sole proprietor
Register on Efiling
Register on Efiling
- www.sarsefiling.co.za
- Or ask your accountant to assist you
Medical Aid Contributions
Medical Aid Contributions
- Medical Aid Contributions are not Deductible but a rebate is given. R332 per month for primary member, R332 for first dependent, R224 each dependant thereafter.
- The annual rebate applicable to excess medical scheme contributions and other medical expenses is calculated as follows:
- Taxpayer over 65 years of age: 33.3% of the amount of medical contributions as exceeds three times the amount of the medical scheme contribution credit and 33.3% of all other medical expenses.
- Taxpayer with a disability: 33.3% of the amount of medical scheme contributions as exceeds three times the amount of the medical scheme fees credit and 33.3% of all other medical expenses.
- Taxpayer under 65 years with no disability: 25% of the amount of the aggregate of four times the medical scheme contribution credit and other medical expenses as exceeds 7.5% of taxable income.
Should expenses be claimed VAT inclusive or Vat Exclusive
Should expenses be claimed VAT inclusive or Vat Exclusive
- If you or your company is not VAT registered, you can claim the expenses inclusive of VAT.
- If you or your company are VAT Registered then you will need to claim the expenses exclusive of VAT
Tax Free Savings
Tax Free Savings
This is how it will work:
- You do not have to pay income tax, dividends tax or capital gains tax on the returns from these investments.
- You can only contribute a maximum of R36 000 per tax year (annual limit).
There is a lifetime limit of R500 000 per person. - If a person exceeds the limits, there is a penalty of 40% of the excess amount.
- A person can have more than one tax free investment, however, you are limited to the annual limits per tax year.
SBC Tax
SBC Tax
- SBC (Small Business Tax) is a favourable tax table for small businesses earning less than R20 million in sales for the year
- A “personal service” company can not apply this tax table
- Speak to your accountant first
Consider other Taxable Income
Consider other Taxable Income
Interest and Rental Income need to be included in your tax return
Retirement Funds and Pension Funds
Retirement Funds and Pension Funds
RA and Pension Fund Contributions are deductible for tax but the deduction is limited to the lesser of R350 000 or 27,5% of Taxable Income (Gross Income less all allowable deductions)
Income Tax Submission Dates
Income Tax Submission Dates
- 31-Aug Provisional Tax 1, this is an estimate made at 6 months into the tax year for what you expect the full year profits to be and half of that tax is paid
- 28-Feb Provisional Tax 2, this is an estimate made close to tax year end and based on the last 12 months to determine the tax amount owed, the tax owed less that paid in August is the amount to be paid here.
- An annual tax return is completed during Tax Season each year (normally June to December), based on accurate figures.
- The tax owed is then compared to the provisional tax payments already made and if there is a requirement for an additional payment to be made it can be done on this return
Travel Allowances
Travel Allowances
- Employees need to meet a number of requirements in order to claim travel allowance deduction from SARS.
- These requirements include maintaining a logbook, recording the total distance travelled for business and personal use and proof of travel expenses should be retained.
- On assessment employees can claim against costs related to wear and tear of their vehicle, maintenance and repairs, vehicle license costs, insurance costs, and finance charges.
- SARS has a log book template available on their website which is available to all.