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Income tax brackets for 20214/15/2024 ![]() ![]() Understanding tax brackets are important for individuals and businesses alike as they need to be aware of the amount of taxes payable and when they are required to file tax returns. Why are tax brackets important for businesses in South Africa? Investment income, such as interest and foreign dividends.Income or profits arising from an individual being a beneficiary of a trust.Profits or losses from a business or trade.Remuneration (income from employment), such as salaries, wages, bonuses, overtime pay, taxable (fringe) benefits, allowances and certain lump sum benefits.Such rates are determined annually by the parliament and rise with income.Įxamples of amounts an individual may receive in South Africa, and from which the taxable income is determined, include: The tax brackets show the rate that you will need to pay for your income proportion, which differs depending on filing status. More Useful Information about Taxes in South Africa What Is A Tax Bracket? Transfer duty is payable at the following rates on transactions which are not subject to VAT: Other than the deductions set out above, an individual may only claim deductions against employment income or allowances in limited specified situations, e.g. Other deductions for Self-employed people If you use accounting software, such as QuickBooks, keeping track of invoices, expenses and receipts is a breeze. ![]() Make sure you are very thorough when it comes to keeping all invoices and records of these expenses. Whether it’s stationery, telephone or employee costs, SARS will allow you to deduct all expenses related to making your income. Independent contractors, freelancers and sole proprietors, take note. At least there is some payback for the taxing times spent on the road! Business expenses (Self-employed) Make sure you keep a detailed logbook of your trips and the costs involved otherwise SARS will reject your claim. If you have to travel often for work and your employer pays a travel allowance, you can get some cash back from SARS. Monthly contributions to medical schemes (a tax rebate referred to as a medical scheme fees tax credit) by the individual who paid the contributions are up to R364 for each of the first two persons covered by those medical schemes, and R246 for each additional dependent. The deduction is limited to 27.5% of the greater of the amount of remuneration for PAYE purposes or taxable income (both excluding retirement fund lump sums and severance benefits) Medical and disability expenses The SARS has a list of available tax tables to help you calculate your deductions, you can use the links below to access them:Īmounts contributed to a pension, provident and retirement annuity funds during a year of assessment are deductible by members of those funds. However, during this process, you will also report your tax deductions, which are business expenses that can lower the amount of tax you have to pay during the fiscal year. More than that, it’s a legal requirement and failing to file a tax return could land you in serious legal trouble with government agencies. Non-resident beneficial owners of dividends may benefit from reduced tax rates in limited circumstances Deductionsįiling a tax return is one of the many inescapable (and sometimes nasty) realities of being a working adult. Dividends Taxĭividends tax is a final tax on dividends at a rate of 20%, paid by resident companies and non-resident companies in respect of shares listed on the Johannesburg Stock Exchange (JSE) or other South African licensed exchange.ĭividends are tax-exempt if the beneficial owner of the dividend is a South African company, retirement fund or other exempt people. Once you come to your Net Taxable Income, you will then pay your taxes based on that taxable income. For companies, close corporations, personal liability companies and those which qualify as a Small Business Corporation, your Net Profit on which your tax is payable is your total taxable income (excluding any capital proceeds) less any qualified deductions and special allowances. ![]()
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