• What is Income Tax?
• Who should register for Income Tax?
• SITE and PAYE
• Tax returns

Income tax is the money you pay to government from your wages to pay for roads, schools, hospitals etc.

The amount of tax that you pay depends on:

• How much you earn.
• Your age (whether you are under 65 or over 65).
• Whether you are a member of a pension fund or pay towards a retirement annuity fund.

Examples of income on which you can be taxed include:

• income from employment eg. salaries, wages, bonuses, overtime
• fringe benefits and certain lump sums
• income from a business or trade
• investment income eg. interest, rental income, and foreign dividends
• annuities
• pensions
• income from your own business.

• A person earning an annual salary of over R60 000 a year (PAYE employees) - after deductions of contributions to pension funds and retirement annuities
• A person earning less than R60 000 a year (SITE employees) - only when allowances (travel, medical aid etc) are included in their remuneration
• A person earning investment income (interest) of more than R11 000 per year
• A person earning rental income
• A person earning business income
• A person who receives a travel or public office allowance as part of their salary
• Members of Close Corporations and Directors of Companies

You can register for income tax at a SARS office by completing an IT 77 form. You will need a copy of your ID and an IRP5 form. Your registration will be confirmed within 21 working days and you will be issued with a tax reference number.

There are two main types of tax that are deducted from an employee's salary or wages:

• SITE (Standard Income Tax on Employees)
• PAYE (Pay As You Earn).

If you earn more than R27 000 per year, you pay SITE tax which is deducted from your salary every week or month. Your employer must work out how much needs to be deducted.

If you earn more than R60 000 per year, you will pay SITE tax on the first R60 000 and then PAYE on everything that you earn over and above R60 000. The amount of PAYE you pay depends on how much you earn and is calculated from tax tables issued by the South African Revenue Services.

Once a year, your employer will give you an IRP5 tax certificate that shows the total amount that you earned and the total tax that was deducted.

If you earn more than R60 000 a year, you need to complete a tax return and send it with your IRP 5 certificates to SARS.

You must register with SARS before you complete a tax return. If you are already registered, your tax return forms will be sent to you in the post. You can also collect the forms from your nearest SARS office.

You can also receive and submit your tax returns electronically using the the SARS eFiling system. eFiling is an electronic tax return and submission service. You can register for eFiling if you are already registered as a tax payer. You will need your tax reference number and ID number.

You will receive detailed instructions on how to complete the tax return with the forms.

When you submit your return SARS will check that you have paid the correct amount of tax. If you have paid too much tax you will get a refund. If you have not paid enough tax you will be asked to pay the outstanding amount. You can also collect a copy of the forms from your nearest SARS office.

• tax evasion (i.e. not paying your income tax )
• not completing an income tax return
• not disclosing all your income on your income tax return.