Paying income tax

Personal income tax is the money you pay to government from your salary or wages. This money is used to help pay for roads, schools, hospitals and other government services. The South African Revenue Services (SARS) manages the collection of taxes and ensures that all working citizens contribute fairly. The 2020 tax season kicked-off on 1 September 2020. 

What happens during tax season? 

This year things have been done a little bit differently. In response to the Covid-19 pandemic, SARS has gone out of their way to enhance its efforts to further simplify the tax return filing requirements for individual taxpayers and removing the need to travel to their branches.

Since August, SARS has been calling taxpayers to assist them with their tax returns. Through the use of third-party data, SARS has been able to complete tax returns and where they have the required information they've provided you with a proposed assessment without the need to file a tax return. This enables you to view, accept or edit your proposed assessment from the comfort of your home or place of work using eFiling or SARS MobiApp.

If you don't get an auto-assessment, the individual income tax return filing dates are:

• 1 September to 16 November 2020 - Taxpayers who file online.
• 1 September to 22 October 2020 - Taxpayers who cannot file electronically can do so at a SARS branch by appointment.
• 1 September 2020 to 29 January 2021 - Provisional taxpayers who file electronically.

Here’s what you need to know before you get started on your tax return.

The amount of personal income tax that you pay depends on:

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

Supporting documents:

To ensure a smooth filing experience, make sure you've got all the supporting documents ready which may include the following:

Proof of income including:

• IRP5/IT3(a) from your employer or pension fund.
• Tax certificates for investment income IT3(b).
• Tax-free Investments certificate(s) IT3(s).
• Financial statements (e.g. for business income).
   

Proof of deductions such as:

• Medical scheme contributions certificates and receipts.
• Completed confirmation of diagnosis of disability form (ITR-DD) if you want to claim any disability expenses.
• Retirement annuity fund contributions certificates.
• A travel logbook (if you receive a travel allowance or use a company car).

Read more about the complete list of supporting documents you may need.

Auto Assemesment - SARS does the filing for you

Who qualifies to pay personal income tax?

People who pay income tax are generally individuals who earn an income from a salary, commission, fees, etc.

If you earn less than R350 000 for a full year from one employer (that’s your total salary income before tax) and have no other sources of additional income (for example, interest or rental income) and no deductions that you want to claim (for example medical expenses, travel or retirement annuities), then you don’t need to submit a return.

If you're still unsure whether you need to submit a return then answer these simple questions.

Corporate tax includes tax paid by companies or close corporations, as well as trusts, on their annual income.

Most of the state's income is derived from Income Tax (personal and corporate tax), although nearly a third of total revenue from national government taxes comes from indirect taxes, primarily Value-Added Tax (VAT).

Pay-As-You-Earn  (PAYE)

PAYE, or Employees tax, is the tax that employers must deduct from the employment income of employees – such as salaries, wages and bonuses and pay over to SARS monthly. It's withheld daily, weekly, or monthly when these amounts are paid or become payable to the employees.

It ensures that an employee's income tax liability (amount of tax owed) is settled on an ongoing basis, while the income is being earned. The advantage of this is that the tax liability for the year is settled over the whole year of assessment.

The amount of PAYE you pay depends on how much you earn and is calculated using tax tables issued by SARS.

What is eFiling?

eFiling is an online tax return and submission service. You can register for eFiling if you’re already registered as a taxpayer.

You’ll need:

• Your tax reference number, and
• Your official South African ID.

You’ll receive detailed instructions on how to complete the tax return with the forms. When you submit your return, SARS will check that you’ve paid the correct amount of tax.

SARS helps you eFile

What is Help-You-eFile?

Help-You-eFile on the SARS eFiling website allows you, the taxpayer, to ask a SARS agent to help you complete your return if you're struggling. This is done telephonically while you're logged onto eFiling.  The agent will be able to help you remotely throughout the return submission process. Click here for more information.

SARS MobiApp

SARS has a mobile app that allows you to:

• Register for eFiling,
• Submit a tax return (even a complex ITR12 form),
• Reset your password,
• View your notice of assessment (ITA34),
• View your Income Tax Statement of Account (ITSA),
• Use an online tax calculator, and
• Request a correction.

Find out more about the SARS mobile app and how it can simplify your tax returns this year. 

Don't fall for scams

Don't be fooled by emails asking for your personal information. SARS will never:

• Request your banking details or personal details in any communication that you receive by post, email, phone or SMS, or
• Send you any hyperlinks to other external websites - even those of banks.

Not paying tax that you owe to SARS has severe legal implications. You can be fined or imprisoned if you’re found guilty of:

• Tax evasion (in other words: not paying your income tax),
• Not completing an income tax return, or
• Not disclosing all your income on your income tax return.

For more information:

• Please see:
  • the comprehensive guide to the ITR12 return for individuals, and
  • the list of forms that are only available via eFiling or at a SARS branch near you,
• Visit the SARS website,
• Contact your nearest Western Cape SARS office, or alternatively
• Contact the SARS Western Cape Call Centre at 0800 00 7277.

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