PROVISIONAL TAX EXPLAINED
We have finalised the first provisional tax submission on 31 August 2024 and are reflecting on how we can assist you as an individual taxpayer to maintain compliance with SARS.
Therefore, we have compiled this summary to ensure that our clients are aware of their obligations to SARS as taxpayers.
WHAT IS PROVISIONAL TAX?
Provisional tax is not a separate tax from income tax. It is a method of paying the income tax liability in advance, to ensure that the taxpayer does not remain with a large tax debt on assessment.
NON-PROVISIONAL TAXPAYER
You are a non-provisional taxpayer if you only earn remuneration on which PAYE is deducted.
You are exempt from being a provisional taxpayer even if you receive income other than a salary, if both of the following apply to you:
- You received income from interest, dividends, rentals and any remuneration from an employer that is not registered for PAYE and the total amount received does not exceed R 30 000 for the year.
- Your taxable income does not exceed the tax threshold for the year.
PROVISIONAL TAX – INDIVIDUALS
If you earn any of the following income, you may be a provisional taxpayer even if you also earn a salary:
- Remuneration from an employer who is not registered for employees’ tax;
- Interest exceeding:
- R23 800 if you are under 65; or
- R34 500 if you are 65 natural person
- Income from carrying on any business;
- Income from the rental of fixed properties;
- Income from operating as an independent contractor
- Income from commission received on which no PAYE are deducted
- Other taxable income
It is important that you notify us if you are not exempt from provisional tax. If there is any uncertainty then you can contact us directly to assist you in determining if you are a provisional taxpayer.
