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Tax Tables 2018/2019

Income Tax: Individuals and Trusts
Tax rates (year of assessment ending 28 February 2019)

Taxable incomeRates of tax
0 - 195 85018 % of taxable income
195 851 - 305 85035 253+ 26% of taxable income above 195 850
305 851 - 423 30063 853+ 31% of taxable income above 305 850
423 301 - 555 600100 263+ 36% of taxable income above 423 300
555 601 - 708 310147 891+ 39% of taxable income above 555 600
708 311 - 1 500 000207 448+ 41% of taxable income above 708 310
1 500 001 and above532 041+ 45% of taxable income above 1 500 000

Rebates

Primary RebateR14 067
Secondary (Persons 65 and older)R7 713
Tertiary (Persons 75 and older)R2 574

Tax Thresholds

The tax thresholds at which liability for normal tax commences, are:
Persons under 65R78 150
Persons of 65 - 74 yearsR121 000
Age 75 and olderR135 300

Medical Scheme Fees Tax Credits

Main memberR310
First dependantR310
Each additional dependantR209

 

Subsistence Allowances and Advances

Where the recipient is obliged to spend at least one night away from his/her usual place of residence on business and the accommodation to which that allowance or advance is granted to pay for:

  • meals and incidental costs, an amount of R416 per day is deemed to have been expended;
  • incidental costs only, an amount of R128 for each day.

The rate for foreign travel will be gazetted soon and can be found on www.sars.gov.za under the Legal Council tab.

 

Table for Calculation of Rate per km/Travel Allowance

Value of the vehicle (including VAT)Fixed CostFuel CostMaintenance cost
(R)(R p.a)(c/km)(c/km)
0 - 85 0028 35295.734.4
85 001 - 170 00050 631106.843.1
170 001 - 255 00072 983116.047.5
255 001 - 340 00092 683124.851.9
340 001 - 425 000112 443133.560.9
425 001 - 510 000133 147153.271.6
510 001 - 595 000153 850158.488.9
exceeding 595 000153 850158.488.9

 

Prescribed Rate for Reimbursive Kilometres
The SARS prescribed rate per kilometer increased from R3.55 to R3.61.

 

Personal Service Provider

A personal service provider is taxed at a rate of:

  • 28% for a personal service provider company (remain unchanged) and
  • 45% for a personal service provider trust (remain unchanged).

Quick Payroll Knows

Click here to solve your 2018 payroll problems.

The Taxation Laws Amendment Act, 2017 & the Tax Administration Laws Amendment Act, 2017 & the Rates and Monetary Amounts and Amendment of Revenue Laws Act, 2017.

Introduction

The Taxation Laws Amendment Act, 2017 and the Tax Administration Laws Amendment Act, 2017 was promulgated on 18 December 2017. The Rates and Monetary Amounts and Amendment of Revenue Laws Act, 2017 was promulgated on 14 December 2017. Here is a summary of the most important changes affecting payroll.

 

Reimbursive Travel Allowance

From March 2018, 100% of the portion of the reimbursive travel allowance that exceeds the prescribed rate per kilometre (rate per kilometre for the simplified method, fixed by the Minister of Finance by notice in the Gazette) will be included in remuneration and will be subject to PAYE, UIF and SDL.

 

Employer Provided Bursaries

Change 1
From March 2017, the exemption thresholds for bursaries granted by the employer (or associated institution in relation to the employer) to a relative (without a disability) of an employee have increased to the following amounts:

  • The scholarship or bursary is not exempt if the remuneration proxy exceeds R600 000 (changed from R400 000).
  • If the remuneration proxy does not exceed R600 000 (changed from R400 000), then the first R20 000 (changed from R15 000) of a scholarship or bursary in respect of grade R to grade twelve or a qualification to which an NQF level from 1 up to and including 4 has been allocated, is exempt from normal tax.
  • If the remuneration proxy does not exceed R600 000 (changed from R400 000), then the first R60 000 (changed from R40 000) of a scholarship or bursary in respect of a qualification to which an NQF level from 5 up to and including 10 has been allocated, is exempt from normal tax.

The new thresholds must be backdated to March 2017.

 

Change 2
From March 2018, there will be different exemption thresholds for bursaries granted by the employer (or associated institution in relation to the employer) to an individual with a disability who is a family member of an employee who is liable for family care and support of that individual, namely:

  • The scholarship or bursary is not exempt if the remuneration proxy exceeds R600 000.
  • If the remuneration proxy does not exceed R600 000, then the first R30 000 of a scholarship or bursary in respect of grade R to grade twelve or a qualification to which an NQF level from 1 up to and including 4 has been allocated, is exempt from normal tax.
  • If the remuneration proxy does not exceed R600 000, then the first R90 000 of a scholarship or bursary in respect of a qualification to which an NQF level from 5 up to and including 10 has been allocated, is exempt from normal tax.

 

Certain Dividends Included in Remuneration

Effective 18 December 2017, dividends as specified in paragraph (kk) of the proviso of section 10(1)(k)(i) of the Income Tax Act are included in remuneration and are subject to PAYE, UIF and SDL.

 

Directive for Certain Dividends Included in Remuneration

From March 2018, employers must apply for a directive, using directive application form IRP3(s), to acquire the PAYE amount to be withheld from dividends that are not exempt (paragraph (dd), (ii), (jj) and (kk) of the proviso of section 10(1)(k)(i)).

 

Application of the R350 000 Annual Monetary Cap Amount

An employee is allowed a tax deduction on the total contribution amount (employee and deemed employee contribution) towards a retirement fund, limited to the lessor of:

  • 27.5% of remuneration (excluding retirement fund lump sum benefit, retirement fund lump sum withdrawal benefit and severance benefit), or
  • R350 000 per annum.

From March 2018, the legislation forces to ‘spread’ the R350 000 cap amount across the tax year using a cumulative calculation.

The cumulative calculation of the R350 000 monetary cap amount applies for employees’ tax purposes, and any unused portion will be taken into account on assessment.

 

Exempt Foreign Services Income

From March 2020, certain remuneration paid/accrued to a resident employee by any employer (of private sector companies only) in respect of employment services rendered on behalf of the employer in any country outside South Africa will be exempt from PAYE if –

  • the remuneration received for foreign services rendered does not exceed one million rand, and
  • the employee is outside South Africa for a period (or periods) exceeding 183 full days in any 12 months, and
  • the employee is outside South Africa for a continuous period exceeding 60 full days in total in that period of 12 months;

subject to a double taxation agreement if such an agreement exists.

 

Right of Use of Asset Fringe Benefit – Clothing now Excluded

From March 2018, the amended legislation confirms our interpretation that any use of employer provided ordinary clothing (uniform that is not clearly distinguishable from ordinary clothing) will result in a taxable fringe benefit value.

 

Bargaining Council Tax Relief

Some bargaining councils have not withheld PAYE from holiday, sick leave and end of year payments. Their liabilities for penalties and interest put these bargaining councils at risk of closure and therefore, a certain level of relief is provided:

  • Non-compliant bargaining councils are required to pay a bargaining council levy of 10% of the total employees’ tax that should have been withheld from all payments made by the bargaining councils to their member between 1 March 2012 and 28 February 2017.

The 5-year period is linked to the period of record keeping required in terms of section 29 of the Tax Administration Act.

Bargaining councils must submit a return and pay the bargaining council levy to SARS on or before 1 September 2018.

Bargaining councils must be fully tax compliant from assessment year 2018 onwards and will not be afforded relief in future, this is a once-off relief concession.

 

Employment Tax Incentive (ETI)

From March 2018, ‘employed and remunerated’ hours in terms of wage, for employees without a wage regulating measure, refers to ordinary/employed hours only and additional hours in excess of ordinary hours (such as overtime) should not be taken into account when determining the ‘employed and remunerated’ hours for wage.

 

Unemployment Insurance Fund Contributions (UIF)

Effective March 2018, the following UIF exemptions are no longer applicable and these employees must contribute towards UIF:

  • learners (learners employed according to section 18(2) of the Skills Development Act), and
  • persons who will be repatriated at the end of the period of service.

 

Postponement of the Annuitisation of Provident Fund Pay-Outs to 1 March 2019

The compulsory annuitisation requirement of provident funds is postponed for another year, from March 2018 to March 2019. For more information on all the changes, please read the detailed document here.

 

 

For more information on all the changes, please read the detailed document here.

Sources

Taxation Laws Amendment Act, 2017
Tax Administration Laws Amendment Act, 2017
Rates and Monetary Amounts and Amendment of Revenue Laws Act, 2017
National Budget Speech, 2018

DISCLAIMER
Although care has been taken with the preparation of this document, EasyBiz (Pty) Ltd makes no warranties or representations as to the suitability or quality of the documentation or its fitness for any purpose and the client uses this information entirely at own risk.

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