Have a question or comment on yesterday’s Budget Speech announcement? Ask one of our Sage Pastel Payroll & HR Experts your employee tax questions.
Time: 09h00 – 10h00 this morning
Filed under Uncategorized
Have the tax brackets changed? I saw in a newsletter that everyone earning below 160 000 per year has to pay 18% tax, is this correct or are there sub-brackets within this bracket?
The tax brackets have indeed changed for the 2013-2014 tax year.
The first bracket is from 0-165 600, and the percentage applied in this bracket is 18%.
To find the full breakdown of the new tax brackets, please have a look on our website under 2013 Budget speech.
Please also note that the tax rebate has also increased which should influence your tax calculation.
Hi there, Pravin Gordhan mentioned that The current account deficit to average 6.2% over next three years; what exactly does this mean?
The account deficit indicates the shortfall government needs to make up to cover all expenses. The minister expects that government spending will exceed income by an average of 6.2%, which indicates that more money needs to be borrowed to cover budgeted expenses.
The current account is one of the major measures of a country’s foreign trade.
The current account calculation consists of exports and import of goods and services, the net income from abroad, and the net current transfers.
The current account deficit is explained quite well in the budget speech transcript on our website.
“However, our trade performance is holding us back. Exports grew by just 1.1 per cent in real terms last year, while imports increased by 7.2 per cent. The deficit on the current account of the balance of payments was 6.1 per cent of GDP. This means, in simple terms, that expenditure in the South African economy exceeded the value of production and income by about R190 billion last year. This is partly a consequence of the disruption of mining sector activity and the structural reduction in mineral exports due to lower demand.”
– Minister of Finance, Pravin Gordhan.
How will the new medical aid rebates affect employees? Will they be receiving more in their pockets at month end?
The medical aid tax credit system is calculated based on the number of beneficiaries on the medical aid, which includes the main member.
During the 2012-2013 tax year, we calculated the credit per month as R230 for the principal member, R230 for the first dependant and an additional R154 for each dependant thereafter.
The medical aid tax credit has increased with the budget speech, and for the 2013-2014 tax year, we will calculate the credit per month as R242 for the principal member, R242 for the first dependant and an additional R162 for each dependant thereafter.
(Please note that the above system is applicable to employees under the age of 65.)
This will indeed reduce the amount of tax the employee is paying per month, and coupled with the personal income tax relief provided by the budget speech should be welcomed by the employees.
You are more than welcome to see exactly how much less the employee will pay with our free online salary tax calculator on our website.
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