TAX BLOG

Do I still pay tax for working only part of the year?

Employee tax


Employee tax falls under withholding tax and gets deducted from the employee’s remuneration by the employer. The employer works according to a table provided by SARS to determine the amount to be deducted as tax on the remuneration cycle of the employee. There is an annual threshold amount of R63 556 by which an employee is exempt from paying tax. The deducted amounts get paid over to SARS on behalf of the employee.
If an employee earns remuneration and the amount falls within the tax tables for tax deduction within a remuneration cycle, then such amounts will be deducted. However, if the employee only worked part of the year and the accumulated remuneration for that tax period is less than the threshold amount, the employee is entitled for a tax refund.


Example:


Monique worked for ABC printers and earns a salary of R7500.00. This means that a tax amount of R343.33 per month will be deducted by her employer and paid over to SARS as personal income tax. She got retrenched after working only 4 months of the tax period and didn’t get any other employment. So, for the 2013 tax period she only received a remuneration of R30 000. Taxes were paid on her behalf to the amount of R1373.32. Monique’s remuneration falls within the annual threshold of R63 556 and should be exempt from paying any taxes. This means that she qualifies for a full refund of the taxes paid on her behalf by her employer.


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