Tax returns can be a headache. Last-minute tax returns even worse. You can avoid the panic and penalties by making sure that you have all the information you need to submit your next tax income, problem-free.
If you work in South Africa or own a business, you will be obliged to pay tax in South Africa, although the amount of South African tax you pay is dependent on certain factors.
What exactly is tax and why do we have to pay it?
Income tax is the government’s main source of income.
Who has to register for it?
If your gross earnings from either a salary, commission or fees for a tax year are above a specified amount, you have to register for income tax.
For the 2019 year of assessment (1 March 2018 – 28 February 2019)
- R78,150 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 R121,000.
- For taxpayers aged 75 years and older, this threshold is R135,300.
For the 2018 year of assessment (1 March 2017 – 28 February 2018)
- 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.
For the 2016 year of assessment (1 March 2015 – 29 February 2016)
- R73,650 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 R114,800.
- For taxpayers aged 75 years and older, this threshold is R128,500.
Top tip: You don’t need to file if your total salary for the year before tax is not more than R350,000, provided that:
- 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.
- R23,800 in the case of the estate of a deceased person.
- Dividends were paid to you and you were a non-resident during the 2017 year of assessment.
- Amounts received or accrued from a Tax Free Investment.
How do I register to start paying tax?
You must complete a form, which you’ll find on the SARS website, at a branch or a SARS Contact Centre. Once you have completed the form, take it to a SARS branch, along with either your ID, passport or driver’s licence.
Once you’ve been registered, you will get your tax number.
What is a tax return?
It’s a form on which you, the taxpayer, state your income and personal circumstances. Based on the income you have declared, SARS calculates the amount of tax you were meant to pay and your tax-deductible expenses. In some instances, it may even result in a refund.
A tax return covers a 12-month period that starts on the first day of March of the previous year and ends on the last day of February the following year.
How should a tax return be submitted?
Online: The easiest and quickest way to file a tax return is online. Register for eFiling on the SARS eFiling website and then use SARS eFiling. A page is available that explains everything in detail. Once registered, you can complete the online form to create your return.
*Note that you will start by completing the first page of the form which contains several questions regarding the nature of your tax affairs (referred to as a return “wizard”). Completion of this part will automatically tailor the tax return to your specific tax requirements.
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.