SARS Employee Tax, UIF and SDL 2014
<h2>The South African Revenue Service Employees Tax, Unemployment Insurance Fund and Skills Development Levy 2014</h2>
Employees Tax in South Africa
Every employer in South Africa must withhold PAYE (Pay-as-you-earn) from remuneration paid to an employee. The rate of withholding is determined by the South African Revenue Service and is published in their EMP10 Guidelines. Tax withheld must be paid on or before the 7th day after the month in which remuneration was paid.
It is the employer’s obligation to ensure the correct withholding of PAYE. Where an employer has not withheld the correct amount, it becomes a debt to the South African Revenue Service. When audited, employers often find their tax exposures to be very large and SARS is on a drive to audit all employers.
At the end of a tax year the employer must report the PAYE to SARS on an IRP501 form. This form shows what PAYE was withheld per employee. The income and benefits paid to an employee and the PAYE withheld is also shown on an IRP5 certificate that is handed to the employee. This document is filed by the employee with his or her personal income tax return.
Employees’ tax is a complex area and specific questions will be easier to answer than attempting to do the topic justice with a more detailed explanation.
Unemployment Insurance Fund – UIF South Africa
Unemployment insurance contributions are payable monthly by employers on the basis of a contribution of 1% by employers and 1% by employees, based on employees’ remuneration below a certain amount.
Skills Development Levy – SDL Africa
Skills Development Levy (SDL) operates also on similar rules that PAYE and many of the definitions are borrowed from the Income Tax Act. Only employers pay SDL and the rate is 1% of the same employee income on which PAYE is calculated. The payment system is through the same channels as PAYE. Employers paying annual remuneration of less than R500,000 are exempt from paying SDL.
If you have any questions relating to these exemptions / deductions please contact us on 011 447 8823 Today to speak to a consultant for FREE.