A comprehensive guide to personal income tax from what it includes, to exemptions and important filing dates.
22 August 2022 · Athenkosi Sawutana
After reading this guide you'll understand the importance of personal income tax, and what will happen if you don't pay your tax. More importantly, you'll know how and when to submit your tax returns.
This is a comprehensive guide to personal income tax from what it includes, to exemptions and important filing dates.
The South African Revenue Services (SARS) defines income tax as the normal tax that is paid on your taxable income. This includes your salary, wages, bonuses, overtime income, commissions, and fringe benefits. Personal income tax can also come from investments (interest and dividends), pension withdrawals, capital gains (which come from the sale of an asset), and annuities.
There are many factors that determine whos liable for personal income tax.
If you earn less than the following thresholds per year, have one employer, no other sources of additional income, and no deductions that you want or need to claim for, you may not need to submit a tax return. For the 2023 tax year (1 March 2022 - 28 February 2023), the thresholds are:
These tax threshold amounts are announced annually during the budget speech by the minister of finance.
The amount of tax you pay is set on a sliding scale of earnings. People who earn more will pay more and those who earn less will pay less. This tax method is described as progressive.
The tax table as of 1 March 2022 is as follows:
Taxable income (R) |
Rates of tax (R) |
R1 - R226,000 |
18% of taxable income |
R226,001 - R353,100 |
R40,680 + 26% of taxable income above R226,000 |
R353,101 - R488,700 |
R73,726 + 31% of taxable income above R353,100 |
R488,701 - R641,400 |
R115,762 + 36% of taxable income above R488,700 |
R641,401 - R817,600 |
R170,734 + 39% of taxable income above R641,400 |
R817,601 - R1,731,600 |
R239,452 + 41% of taxable income above R817,600 |
R1,731,601 and above |
R614,192 + 45% of taxable income above R1,731,600 |
Tax helps the government to carry out its duties, such as providing public goods and services and paying civil servants. Roads, public schools, hospitals, and clinics are some of the services that the government uses tax to fund. The salaries of civil servants such as teachers, nurses, and the police are also derived from taxes. The government also uses tax to look after poor and vulnerable people. Social grant beneficiaries depend on the tax that citizens pay.
SARS is the body thats responsible for administering tax in South Africa. If youre just starting to work you can register as a taxpayer through your employer (employers are required to register with SARS within 21 business days of becoming an employer, unless none of their employees are liable for income tax), or you can visit the nearest SARS branch or website.
After registration, youll be given a unique tax number that will be yours permanently. Your employer will then deduct the tax amount that youre required to pay from your salary every month and pay it to SARS. When registering as a taxpayer youll need your identity document.
Tax season for 2022 began on 1 July and ends on 23 January 2023. Individuals who are not provisional taxpayers should submit their tax returns from 1 July 2022 until 24 October 2022.
Any person who receives an income other than regular remuneration is a provisional taxpayer. Most salary earners are therefore not provisional taxpayers, if they have no other sources of income.
If you have received income such as remuneration, capital gains, travel allowance dividends, interest from investments, or rent, you should file a tax return. A tax return allows you to calculate how much you owe or are owed by SARS, and to request refunds if youve overpaid. It also allows you to arrange payments.
Between 1 July and 24 October you need to obtain an IRP5 form to submit to SARS. This is a certificate that provides information about your income, tax, and all other deductions that are issued by an employer at the end of the tax year.
In order to file a tax return for other income, such as interest from investments, rental income, and capital gains, you'll need to get an IT3b form from your bank. For non-salaried taxpayers or provisional taxpayers, an IRP6 form will be needed to submit your returns. You can download this from your banks website and submit it to your nearest SARS branch or through eFiling.
If you earn less than the thresholds noted above, have one employer, no other sources of additional income, and no deductions that you want, or need, to claim for, you may not need to submit a tax return.
If you are required to submit a tax return, and you fail to do so, SARS will charge you an admin penalty. The penalty will keep recurring for each month that you dont pay, for up to 35 months. This penalty can range from R250 to R16,000 per month, depending on your income. If you dont pay the penalty, SARS will find ways to collect it from you, such as attaching your salary.
Tax evasion is a criminal offence. If you conceal or misrepresent the state of your financial affairs to avoid paying tax, you could be fined or face five years jail time.
If you've submitted your tax returns but fail to pay what you owe, SARS will deal with you in the following ways:
Non-salaried taxpayers and businesses are classified as provisional taxpayers. The first provisional tax payment must be made within six months of the start of the year of assessment. The second payment must be made no later than the last working day of the year of assessment. These payments are not refundable, and when filing your tax return, you will need an IRP6 form.
Your income tax return will be pre-populated with information available to SARS, such as personal particulars (for example name, surname, physical and postal address, banking details, etc) and information received from third parties (e.g., employers, pension funds, retirement funds and medical schemes).
You must check your personal particulars for accuracy. Only correct the fields containing incorrect information. If the return is posted to you, your information will be pre-populated in pink. Please note the following when correcting any of the pre-populated information on the posted return:
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