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 R70 700 in the 2014 year of assessment, and are younger than 65 years of age. If you are 65 years of age or older, the tax threshold (i.e. the amount above which income tax becomes payable) increases to R110 200. For taxpayers aged 75 years and older, this threshold is R123 350.
Where taxpayers receive remuneration which is less than R250 000, they may elect not to submit an income tax return, provided the following criteria are met:
  • Their remuneration is from a single employer;
  • Their remuneration is for a full year of assessment (1 March – 28/29 February);
  • No allowance was paid, from which employees’ tax was not fully deducted;
  • No further deductions need to be claimed or income declared.
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 annualbudget speech.

What steps must I take to ensure compliance?

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.
To register for income tax, you must complete an IT77 registration form which can be obtained from the SARS website, namelywww.sars.gov.za. The form can also be requested from any SARS branch or the SARS Contact Centre. Once it has been completed, it can be taken to any SARS branch for processing or the form can be posted to SARS. To find your nearest branch visit our branch locator.
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. See the 2014/2015 Tax Tables. The 2014 year of assessment (commonly referred to as a “tax year”) runs from 1 March 2014 to 28 February 2015. 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 the 2014 tax year opens on 1 July 2014. The income tax return which should be completed by individuals is known as the ITR12 form. For more information, see ourITR12 Comprehensive Guide, source codes and live stock values.

When should it be submitted?

The deadline for all taxpayers will be published once this has been made available in the Goverment Gazette.

If you don’t submit your income tax return on time, you may be liable for penalties.

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.