A. Update

Version 23 has been released for the generation of PAYE Employer Declaration i.e., IRP5. This specifications document specifies the requirements for the generation of the import tax file for the yearly as well as the interim submission.

The updated version has impacted these source codes: 3010, 3230, 3232, 3923, 3926, and 4115.

The requirements as defined in this version of the BRS will become effective from March 2024 until replaced by an updated version and the changes will be implemented on the SARS systems in September 2024.

B. Statutory Compliance Release Date: March 07, 2024

C. Effective Date: March 01, 2024

A. Update

The Finance Minister of South Africa announced the Budget for FY 2024/25 on February 21, 2024.

The Budget does not propose any changes for salaried individuals, and existing tax rates, rebates, and thresholds will remain unchanged.

B. Statutory Compliance Release Date: February 21, 2024

C. Effective Date: Assessment Year 2024-25 (March 01, 2024)

A. Update

The Finance Minister of South Africa announced the Budget for FY 2023 on February 22, 2023. The following changes have been proposed related to employment tax withholding and other employer obligations:

1. Changes in taxable income slabs, rebates, and thresholds:

Granting tax relief by adjusting personal income tax brackets and rebates for the effect of inflation and to reduce the tax burden, the taxable income brackets have been broadened. In addition to this, higher rates of tax rebates, tax-free threshold, and medical scheme fees tax credit have been proposed, to further reduce the tax liability of the individuals as provided below:

2. Changes in Subsistence Allowance sub-types:

It has been proposed that the daily non-taxable amount in respect of meals and incidental costs when employees are obliged to spend at least one night away from place of usual residence should not exceed the following:

3. Skills Development Levy

A skills development levy is payable by employers at a rate of 1% of the total remuneration paid to employees. It has been proposed that Employers paying an annual remuneration of less than R500 000 shall be exempt from paying skills development levies.

4. Solar Panel Tax Incentive for Individuals

The solar panel incentive has been proposed in the budget. This is meant to help individuals in their immediate decision making, rather than postponing any solar installation until the legislative process can be finalized.

Individuals who install rooftop solar panels from 1 March 2023 will be able to claim a rebate of 25 per cent of the cost of the panels, up to a maximum of R15 000. This can be used to reduce their tax liability in the 2023/24 tax year. This incentive will be available for one year.

The exemption will be subject to conditions and relevant proofs will be required to be submitted.

Apart from Budget, the following updates have been announcement by other authorities impacting payroll:

1. Basic Condition for Employment Act (BCEA) earnings threshold for Tax Year 2023-24:

Vide notification no.3067 of 2023, the earnings threshold for the 2023/2024 has been increased from R224 080.48 per annum (R18 673.37 per month) to R241 110.59 per annum (R20 092.55 per month) and will be effective from March 1, 2023. Employees earning below this threshold amount are entitled to the full protection of every section of the BCEA.

2. Compensation for Occupational Injuries and Diseases Act

Vide notification no.1617 of 2023 base for contribution of OID/COIDA has been increased from R 529 264 to R 563 520 effective from March 1, 2023, till February 28,2024.

B. Statutory Compliance Release Date: February 22, 2023

C. Effective Date: March 1, 2023

A. Update

The Finance Minister of South Africa announced the Budget for FY 2022 on February 23, 2022. The following changes have been proposed related to Withholding taxes on employment and other employer obligations:

1. Changes in taxable income slabs, rebates, and thresholds:

To reduce the tax burden, bring more individuals in lower tax bracket and accommodate the expected inflation of 4.5%, the taxable income brackets have been broadened. In addition to this, higher rates of tax rebates, tax-free threshold and medical scheme fees tax credit have been provided, to further reduce the tax liability of the individuals as provided below:

2. Changes in Subsistence Allowance sub-types:

The daily non-taxable amount in respect of meals and incidental costs when employees are obliged to spend at least one night away from place of usual residence should not exceed the following:

3. Company car fringe benefit:

Determination of the taxable value for all vehicles provided by an employer is as follows:

• No fuel cost may be claimed if the employee has not borne the full cost of fuel used in the vehicle, and no maintenance cost may be claimed if the employee has not borne the full cost of maintaining the vehicle (e.g., if the vehicle is covered by a maintenance plan).
• The fixed cost must be reduced on a pro-rata basis if the vehicle is used for business purposes for less than a full year.

4. Donation:

Deductions in respect of donations to certain public benefit organizations are limited to 10% of taxable income (excluding retirement fund lump sums and severance benefits). The amount of donations exceeding 10% of the taxable income is treated as a donation to qualifying public benefit organizations in the following tax year.

5. Long service awards:

With effect from 1 March 2022, the R 5000 exclusion has been extended to other types of long service awards provided to the employee (e.g., cash and/or the provision of services). However, to allow for the exclusion, the amount must be paid, or the services must be rendered, in respect of a valid long service (i.e., as defined for tax purposes).

Further, the aggregate value of all amounts/ taxable benefits provided (i.e. in the form of cash, an asset, use of an asset or the provision of a service rendered to the employee) will be limited to the R 5000 threshold (i.e. each long service award provided to the employee during the tax year may not be reduced by the R 5000, instead, it is the sum of all such long service awards that may be reduced by the R 5000).

6. Contribution base for Employment Tax Incentive (ETI):

Changes have been made to the definition of ‘monthly remuneration’ to exclude any amounts other than cash payments paid or payable to the employee after the deductions required under the Basic employment Act.

7. Official rate of interest:

A taxable benefit arises in an employee's hands where an employee incurs a debt in favour of the employer (or any other person by arrangement with the employer, or an associated institution in relation to the employer) and no interest is payable or if the interest payable is less than the “official rate of interest”.

The "official rate" is updated periodically. You can find the official rate here

8. Abatement value:

Where an employer provides an employee with the use of company owned/leased accommodation, the value of the rental value placed on the benefit must be determined with reference to a prescribed formula in certain instances. The prescribed formula considers, amongst others, an "abatement amount". For the 2023 tax year this amount is increased to R 91 250.

B. Statutory Compliance Release Date: February 23, 2022

C. Effective Date: March 1, 2022

A. Update

The Minister of Finance announced an increase in the ETI values which will become effective from 1 March 2022. This information was published in the draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill of 23 February 2022. The amendment was brought in by The Taxation Laws Amendment Act of 19 January 2022.

B. Statutory Compliance Release Date: March 9, 2022

C. Effective Date: March 1, 2022

A. Update

Finance Minister of South Africa announced the Budget for FY 2021 on 24 February 2021. Changes in personal income tax are in line with supporting economic recovery from the COVID-19 related slowdown and expected inflation rate for the year. The announcements were made on change in slabs of taxable income, rebates and tax thresholds which will marginally ease the tax burden on individuals. Detailed changes bought in personal income tax regulations are summarised below:

1. Changes in taxable income slabs, rebates, and thresholds
The taxable income brackets have been broadened with increased taxable income limits in order to reduce the tax burden on the individuals, accommodating more individuals in lower tax bracket, and accommodate the expected inflation rate of 4%. In addition to this, tax payers will now have higher rates of tax rebates and medical scheme fees tax credit, further reducing the tax liability. Tax-free threshold has also been increased from 83,100 to 87,300 Rands. The changes in tax rates, tax-free thresholds, tax rebates and medical fees tax credit are as per the tables below:

2. Monthly threshold for UIF contribution has been raised from 148.72 to 177.12 Rands for employee and employer.

3. Non-taxable reimbursed travel allowance rate (where no other travel compensation is paid to the employee) is now 3.82 Rands per kilometre.

B. Statutory Compliance Release Date: February 24, 2021

C. Effective Date: March 1, 2021

A. Update

Version 19.4 has been released for the generation of PAYE Employer Declaration i.e. IRP5. This specifications document specifies the requirements for the generation of the import tax file for the yearly as well as the interim submission.

The requirements as defined in this version of the BRS will become effective from September 2020 until replaced by an updated version.

B. Statutory Compliance Release Date: June 18, 2020

C. Effective Date: September 01, 2020

A. Update

The government proposes expanding the ETI program for a limited period of 4 months, beginning April 01, 2020 and ending on July 31, 2020 as follows:

• a) Increasing the maximum amount of ETI claimable during this 4-month period for employees eligible under the current ETI Act from R1,000 to R1,750 in the first qualifying 12 months and from R500 to R1,250 in the second 12 qualifying months.
• b) Allowing a monthly ETI claim in the amount of R750 during this 4 months period for employees from the ages of 18 to 29 who are no longer eligible for the ETI as the employer has claimed ETI in respect of those employees for 24 months; and 30 to 65 who are not eligible for the ETI due to their age.

B. Statutory Compliance Release Date: April 25, 2020

C. Effective Date: April 01, 2020 to July 31, 2020

A. Update

There will be a four-month holiday for skills development levy contributions (1% of total salaries) to assist all businesses with cash flow. This means that there will be no SDL contribution till Sept. 30, 2020.

B. Statutory Compliance Release Date: April 25, 2020

C. Effective Date: May 01, 2020

A. Update

In order to encourage South Africans to make contributions to the Solidarity Fund in line with the President’s call to action, it is proposed that the tax-deductible limit for donations, currently 10% of taxable income, be increased to 20% in respect of donations in cash or of property in kind donated and actually paid or transferred to the Solidarity Fund at the end of the year of assessment of the donor to the Solidarity Fund during the 2020/21 tax year. There will, thus, be a limit of 10% for any qualifying donations (including donations to the Solidarity Fund in excess of its specific limit) and an additional 10% for donations to the Solidarity Fund.

The 20% tax-deductible limit for donations will apply only to donations made during the 2020/2021 tax year. Any donations over the limit made during the 2020/2021 tax year will be carried forward and deemed to be a donation made in the succeeding year of assessment (2021/2022) and be subject to the 10% limitation in that year.

B. Statutory Compliance Release Date: April 25, 2020

C. Effective Date: April 01, 2020

A. Update

The PAYE BRS for Employer Reconciliation (2020 release) has been updated with the requirements for the COVID-19 Tax Relief to enable employers to claim the increase of the extended ETI, declare donations to the Solidarity Fund and payments received from UIF.

B. Statutory Compliance Release Date: April 23, 2020

C. Effective Date: September 01, 2020

A. Update

Following are the relevant amendments contained in Budget 2020 for the tax year 2021 (Mar. 01, 2020 - Feb. 28, 2021):

1. Changes in Tax Rates for Individuals

For the tax year 2021, following will be the tax rates for individuals:

2. Changes in Tax rebates applicable to individuals

The changes in Tax rebates applicable to individuals for the tax year 2021 are as under:

3. Changes in Tax thresholds applicable to individuals

The changes in Tax thresholds applicable to individuals for the tax year 2021 are as under:

4. Changes in Medical scheme fees tax credit

The changes in Medical scheme fees tax credit for the tax year 2021 are as under:

5. Change in Subsistence allowance (RSA only)

The changes in Subsistence allowance (for RSA only) for the tax year 2021 are as under:

6. Increase in Deduction limit for Donations

Deductions in respect of donations to certain public benefit organizations are limited to 10% of taxable income (excluding retirement fund lump sums and severance benefits). The amount of donations exceeding 10% of the taxable income is treated as a donation to qualifying public benefit organizations in the following tax year.

For the tax year 2020, the deduction was limited to 5%.

7. Determination of rate per kilometer to calculate taxable travelling allowance

South African Revenue Service issued a notice providing guidance to calculate taxable travelling allowance. As per it, the rate per kilometer must be determined in accordance with the cost scale below, and must be the sum of:

• a) The fixed cost divided by the total distance in kilometers (for both private and business purposes) shown to have been travelled in the vehicle during the year of assessment. Provided that where the vehicle has been used for business purposes for less than the full period of a year, the fixed cost must be pro-rated to 365 days;
• b) Where the recipient of the allowance has borne the full cost of the fuel used in the vehicle, the fuel cost; and
• c) Where that recipient has borne the full cost of maintaining the vehicle (including the cost of repairs, servicing, lubrication, the maintenance cost.

Cost Scale:

Or where an employee opts for Simplified Method, rate per kilometer is equal to R3.98 per kilometer.

8. Official Interest rate for Interest-free or low-interest loans

The difference between interest charged at the official rate, and the actual amount of interest charged, is to be included in gross income. For Tax Year 2021, the official interest rate is 7.25% p.a.

B. Statutory Compliance Release Date: February 26, 2020

C. Effective Date: March 01, 2020

A. Update

SARS released PAYE Employer Reconciliation (version 19) for the tax year 2021.

This document specifies the requirements for the generation of an import tax file (IRP 5- CSV) for the yearly as well as the interim submission. The requirements as defined in this version of the BRS will become effective from September 2020 until replaced by an updated version.

B. Statutory Compliance Release Date: February 26, 2020

C. Effective Date: September 01, 2020

A. Update

Following are the updates in calculation of ETI amount (highlighted in bold):

B. Statutory Compliance Release Date: January 15, 2020

C. Effective Date: March 01, 2020

A. Update

As per an amendment in Section 6 (Qualifying Employees) of the Employment Tax Incentive Act, 2013, an employee shall qualify for the ETI if, among other conditions, he is paid at the minimum wage rate applicable to the employer or where minimum wage does not apply, employee is paid at least R 2000 and at the most R 6500 (earlier this limit was R 6000).

B. Statutory Compliance Release Date: January 15, 2020

C. Effective Date: March 01, 2019

A. Update

Act 10 of 2018 (Labour Laws Amendment Act, 2018) introduced the following Statutory Leaves and same becomes effective from Jan. 2020 after a recent notice by the Department of Labour. The newly introduced Statutory Leaves are as under:

• a) Parental Leave;
• b) Adoption Leave; and
• c) Commissioning Parental Leave.

Parental Leave

An employee, who is a parent of a child, is entitled to at least 10 consecutive days’ parental leave.

An employee may commence parental leave on:

• a) the day that the employee’s child is born; or
• b) the date below, whichever date occurs first:
  • 1) that the adoption order is granted; or
  • 2) that a child is placed in the care of a prospective adoptive parent by a competent court, pending the finalization of an adoption order in respect of that child.

Adoption Leave

An employee, who is an adoptive parent of a child who is below the age of two, is entitled to:

• a) adoption leave of at least 10 weeks consecutively; or
• b) the parental leave, as stated above. An employee may commence adoption leave on the date, whichever date occurs first:
• c) that the adoption order is granted; or
• d) that a child is placed in the care of a prospective adoptive parent by a competent court, pending the finalization of an adoption order in respect of that child.

If an adoption order is made in respect of two adoptive parents, one of the adoptive parents may apply for adoption leave and the other adoptive parent may apply for the parental leave.

Commissioning Parental Leave

An employee, who is a commissioning parent in a surrogate motherhood agreement, is entitled to:

• a) commissioning parental leave of at least 10 weeks consecutively; or
• b) the parental leave.

An employee may commence commissioning parental leave on the date a child is born as a result of a surrogate motherhood agreement.

If a surrogate motherhood agreement has two commissioning parents, one of the commissioning parents may apply for commissioning parental leave and the other commissioning parent may apply for the parental leave.

B. Statutory Compliance Release Date: December 23, 2019

C. Effective Date: January 01, 2020