Article By: Financial Planning Institute of SA
I want to know what is my monthly taxable salary is.My package is R15 000 with all sorts of stuff is included. However, my take-home pay is R10 600.
To which amount do I look for calculating my taxable salary?Also, I am renting out my flat. Am I now a provisional tax payer or a normal taxpayer (even though I'm still an employee)? It has only been rented out for four months now (July).
Salary structuring has almost developed into a discipline in itself. It's therefore very difficult to assimilate where and how your deductions are taking place.
The most accurate way of checking it is on your IRP5.Tax season has opened and your employer should have provided you with one by now. Have a look for the "source code" 3605 and the figure next to it will be your taxable income. Next best is to check your salary statement.
In terms of the rental of your flat; this does require you to register as a provisional tax payer.There are a few exceptions to the rule as detailed below:
Individuals below the age of 65 who do not carry on a business and whose taxable income: will not exceed the tax threshold for the tax year; orincome from interest,
dividends and rental will be R10 000 or less for the tax year. Individuals age 65 and older if their annual taxable income: consists exclusively of remuneration, interest, dividends or rent from the lease of fixed property; and is R80 000 or less for the tax year.
So, assuming you are under 65 and the combination of your interest, dividends and rental exceed R10 000 per annum, you would be required to apply in writing for registration at your local SARS branch office. This should be done within 30 days of provisional tax becoming payable.
Provisional tax for individuals is usually payable in February and August of every year and any tax paid provisionally will l be offset against the final income tax that the individual has to pay for the year of assessment concerned. This is where the income you derived from your salary as well as the income derived from renting (less: allowable deductions such as maintenance, interest on bond payments, etc.) will be declared on your tax return and the tax due would be reduced by any provisional payment made.
Going to see a tax consultant at one of the SARS branches or engaging the services of an independent tax practitioner would be the first step in getting registered and ensuring your tax compliance going forward.
The Financial Planning Institute of Southern Africa (FPI) is the leading independent professional body for financial planners in South Africa. The response to the question covers some of the issues in a general and factual manner and does not constitute advice. It is important to consult with a CERTIFIED FINANCIAL PLANNER® professional who, after an analysis of an individuals’ personal needs, goals and circumstances, will be able to provide comprehensive and appropriate advice.