Payroll Compliance Updates-Republic of South Africa
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
 
Source:
http://www.treasury.gov.za/comm_media/press/2020
http://www.treasury.gov.za
https://www.sars.gov.za/Media/Pages/Tax-Relief-measures.aspx
<atarget="_blank" target="_blank" href="https://www.sars.gov.za/Media/Pages/Tax-Relief-measures.aspx">https://www.sars.gov.za/Media/Pages/Tax-Relief-measures.aspx</atarget="_blank">
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:

Taxable income (R) Rates of tax (R)
1 – 205,900 18% of taxable income
205,901 – 321,600 37,062 + 26% of taxable income above 205,900
321,601 – 445,100 67,144 + 31% of taxable income above 321,600
445,101 – 584,200 105,429 + 36% of taxable income above 445,100
584,201 – 744,800 155,505 + 39% of taxable income above 584,200
744,801 – 1,577,300 218,139 + 41% of taxable income above 744,800
1,577,301 and above 559,464 + 45% of taxable income above 1,577,300

2. Changes in Tax rebates applicable to individuals

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

Tax rebates applicable to individuals Amount (R)
Primary rebate 14,958
Secondary rebate (for persons 65 years and older) 8,199
Tertiary rebate (for persons 75 years and older) 2,736

3. Changes in Tax thresholds applicable to individuals

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

Tax thresholds applicable to individuals Amount (R)
Persons under 65 years 83,100
Persons 65 years and older 128,650
Persons 75 years and older 143,850

4. Changes in Medical scheme fees tax credit

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

Medical scheme fees tax credit Monthly Amount (R)
For the taxpayer 319
For the first dependent 319
For each additional dependent 215

5. Change in Subsistence allowance (RSA only)

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

Subsistence allowance Amount (R) per day
Only incidental costs 139
Meals and incidental costs 452

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:

Where the value of the vehicle Fixed Cost (R) Fuel Cost c/km Maintenance Cost c/km
Does not exceed R95 000 31,332 105.8 37.4
Exceeds R95,000 but does not exceed R190,000 55,894 118.1 46.8
Exceeds R190,000 but does not exceed R285,000 80,539 128.3 51.6
Exceeds R285,000 but does not exceed R380,000 102,211 138.0 56.4
Exceeds R380,000 but does not exceed R475,000 123,955 147.7 66.2
Exceeds R475,000 but does not exceed R570,000 146,753 169.4 77.8
Exceeds R570,000 but does not exceed R665,000 169,552 175.1 96.6
Exceeds R665 000 169,552 175.1 96.6

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):

For the first 12 months of employment
Monthly Remuneration Determination Monthly Calculated ETI Amount
R0 – R2000 50% x monthly remuneration R0 - R1000
R2001 - R4500 Fixed at R1000 R1000
R4501 – R6500 Formula: X = A - (B x (C - D))
X = monthly calculated amount
A = R1000
B = 0,5
C = Monthly Remuneration
D = R4500
R 999 - R0
For the Second 12 months of Employment
Monthly Remuneration Determination Monthly Calculated ETI Amount
R0 – R2000 25% x monthly remuneration R0 - R500
R2001 - R4500 Fixed at R500 R500
R4501 – R6500 Formula: X = A - (B x (C - D))
X = monthly calculated amount
A = R500
B = 0,25
C = Monthly Remuneration
D = R4500
R 499 - R0
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
 

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