Personal Income Tax

What is it? Income tax is the normal tax which is paid on your taxable income. Examples of amounts an individual may receive, and from which the taxable income is determined, include –

Remuneration (income from employment), such as, salaries, wages, bonuses, overtime pay, taxable (fringe) benefits, allowances and certain lump sum benefits, Profits or losses from a business or trade, Income or profits arising from an individual being a beneficiary of a trust.

  • Director’s fees,
  • Investment income, such as interest and foreign dividends
  • Rental income or losses
  • Income from royalties Annuities
  • Pension income
  • Certain capital gains

Who is it for?

You are liable to pay income tax if you earn more than:

  • For the 2018 year of assessment (1 March 2017 – 28 February 2018) – see changes from last year
  • R75 750 if you are younger than 65 years.
  • If you are 65 years of age or older, the tax threshold (i.e. the amount above which income tax becomes payable) increases to R117 300.
  • For taxpayers aged 75 years and older, this threshold is R131 150.
  • For the 2017 year of assessment (1 March 2016 – 28 February 2017) R75 000 if you are younger than 65 years.
  • If you are 65 years of age or older, the tax threshold (i.e. the amount above which income tax becomes payable) increases to R116 150.
  • For taxpayers aged 75 years and older, this threshold is R129 850.

Top tip: You don’t need to file if your total salary for the year before tax is not more than R350 000, provided:

You only have one employer (but remember if you have two employers or income sources e.g. late spouse / partner pension income, exam markings income, rental income, moonlighting income etc you do need to file even if the total is still under R350 000)

You have no car allowance or other income (e.g. interest or rent)

You are not claiming tax related deductions (e.g. medical expenses, retirement annuity contributions, travel expenses,etc)

You received interest from a source in South Africa not exceeding – R23 800 if you are below the age of 65 years; or

R34 500 if you aged 65 years or older.

Dividends were paid to you and you were a non-resident during the 2017 year of assessment.

The rates of tax chargeable on taxable income are determined annually by Parliament, and are generally referred to as “marginal rates of tax” or “statutory rates”. The rate of tax levied on an individual is set on a sliding scale which results in the tax increasing as taxable income increases. Every year, the Minister of Finance announces the rates to be levied by publishing the applicable tax tables during the annual budget speech.

What steps must I take to ensure compliance? Step one: You must register for income tax

Step one: You must register for income tax

If you earn a taxable income which is above the tax threshold (see above), you must register as a taxpayer with SARS.

If you are not yet registered you would only be required to visit a SARS branch once to verify your identity, address and bank details. All additional tax registration can be performed from eFiling without having to visit a branch again. You can register once for all different tax types using the client information system.

Kindly note that the ‘IT77 registration form for Individuals’ was discontinued and that the only way to register is to visit a SARS branch where the friendly staff will register you on our system.

Important: Make sure you have all the supporting documents (relevant material) needed. We won’t be able to register you unless all the documents are received.

Step two: You must submit a return

If you are registered for income tax, you will be required to submit an annual income tax return to SARS. The 2017 year of assessment (commonly referred to as a “tax year”) runs from 1 March 2016 to 29 February 2017. Every year, SARS announces  its Tax Season, a period during which you are required to submit your annual income tax return. The tax season for 2017 opens on 1 July 2017. The income tax return which should be completed by individuals is known as the ITR12 form.

When should it be submitted?

24 November 2017 – At a SARS branch (provisional and non-provisional) 24 November 2017 – eFiling (non-provisional)

31 January 2018 – Provisional taxpayers via eFiling

If you don’t submit your income tax return on time, you may be liable for penalties. How should it be submitted?

Online: The easiest and quickest way to file a tax return is online, by making use of SARS eFiling. You must, however, first register for eFiling on the SARS eFiling website. We have a page where we explain to you in detail how to register for eFiling. Once registered, you can complete the online form to create your return.

Once you have registered for eFiling, you can also file your return by making use of your cellular phone in linking with our Smartphone App. Alternately, you can download our eFiling App, after which you will be able to file your individual Income Tax Returns quickly and easily via your iPhone 4 or 4s, iPad, Android phone and Android tablet.

In a branch: The tax return can also be requested by visiting any SARS branch office. To find your nearest branch visit our branch locator. (Please note that there may be delays and queues during filing season, which is why SARS promotes the use of eFiling as a medium for return submission.)

Top Tip: When completing your return, you will require the following documentation in order to verify the existing, pre-populated information that appears in the return, as well as to complete any remaining portions:

IRP5: This is the employees’ tax certificate your employer issues to you. Certificates you received for local interest income earned.

Any other documentation relating to income received or accrued, such as remuneration that has not been reported to SARS by your employer, or business or investment income, etc.

Details of medical expenses paid and medical scheme contributions made.

The relevant certificates reflecting your retirement annuity fund contributions made. A logbook and other documents in support of business travel expenses (if the travel allowance is part of your remuneration or if you have the right of use of a company car taxable benefit).

Any other documentation relating to the allowable deductions you wish to claim.