Paying income tax

Instructions:

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 2017 tax season for individuals kicked-off on 1 July 2017. Here's some information to help you file your tax return. 

What happens during tax season? 

Income tax season

During tax season, you need to submit an ITR12 form (which is your official Income Tax Return) so that SARS can calculate your tax on your income and the tax-deductible expenses for the year being assessed.

If, after considering all your income and expenses, SARS determines that you’ve paid too much tax, you’ll receive a refund. If you haven’t paid the full amount due, you’ll be asked to pay the outstanding amount.

For information on how to fill in your ITR12 form correctly, please read:

Changes to the ITR12 tax return

For the 2017 tax season SARS introduced the following changes to the ITR12 tax return: 

  • Medical expenditure,
  • retirement annuity fund contributions,
  • income distributed/vested as a beneficiary of trusts and,
  • disabilities.

For a detailed look at the changes, click here

The important 2016 deadline dates are:

  • 22 September 2017 - Manual post or at your nearest SARS office drop boxes (non-provisional)
  • 24 November 2017 - eFiling or electronic filing at SARS branch  (non-provisional)
  • 31 January 2018 - provisional taxpayers via eFiling

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

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: 
 

Before submitting your tax return, 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), and
  • 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, and
  • 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.


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). 


How do I register to pay income tax?

The only way to register as a tax payer is to visit  one of the SARS branches.  Before you go to the branch, make sure you have all the supporting documents ready.

The following supporting documents are required:

1. Proof of identity

Certified or uncertified copies of a valid identity document, driving licence, passport, temporary identity document, asylum seekers certificate or permit together with the original identification (identity document includes the green barcoded book and the smart ID card).

In the instance where a taxpayer is a child who receives payment for work such as an actor or model, then a certified copy of their birth certificate, together with a copy of one of the parent’s/guardian’s identity document. If there's no surviving parent, the death certificate of one parent must be provided by the appointed guardian.

Filing income tax

2. Proof of address

SARS will only accept these listed documents as proof of residential or business address. The document must clearly show the taxpayers name (either initials and surname or first names(s) and surname) and the physical address.

3. Proof of bank details

You'll also need an original letter from your bank which is not older than 1 month (30 days), confirming the account holder’s legal name, account number, account type, branch code and the date on which the account was opened. Alternatively you can submit an original bank statement or ATM / Internet generated statement or eStamped statement not more than 3 months old that confirms the account holder's legal name, bank name, account number, account type and branch code. 

If you've opened a new bank account and a bank statement can't be produced, you must provide an original letter from the bank (not older than 1 month) with the original bank stamp reflecting the date the bank account was opened.

If your spouse doesn't have a bank account and chooses to use your banking details, a certified copy of the marriage certificate is required. In instances of a life partner, an affidavit must be provided.

Once you've been registered and given your tax number you can then register for eFiling, which is a free and convenient way of interacting with SARS.

All you need is a computer and internet access. As a registered eFiler you'll then be able to submit your tax return online, make payments to SARS etc.


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 course of 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.

Tax returns

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. 

You need to register with SARS before you complete a tax return. If you’ve 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, or receive and submit your tax returns online using the SARS eFiling system.

What is eFilingFiling your tax returns on time

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 share your view of the eFiling screen on your personal computer.

SARS mobile app

SARS has introduced 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:

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The content on this page was last updated on 10 July 2017