Tax Q&A – Should I be paying tax?

Question:

I earn a basic wage of R1720.00 per week and my deductions are:

UIF = R17.00

Provident Fund = R111.00

Council Levy = R2.50

Union Fee = R14.05

Sick Fund = R25.80

Funeral Fund = R1.80

Should I be paying tax?

Answer:

The annual tax threshold for the current tax year is R73 650. This means that any person whose taxable earnings in annual terms is below this amount will not pay income tax.

The monthly equivalent of the threshold is R6137.50 and translates to roughly R1416 per week.

In this specific case, the individual earns R1720 per week, above the weekly threshold therefore he will qualify to pay tax based on the earnings value only. There might be one or more deductions that can be tax deductible that could lower his taxable earnings below the threshold.

If we look at the deductions listed, none of the contributions are allowed as tax deductions and the taxable earnings will remain at R1720 per week.

The bottom line is that PAYE should be deducted from this individual’s earnings.

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Filed under General, HR, Legislative Updates

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