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Thread: Interest on outstanding taxes - calculated on total including or excluding penalty?

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    Interest on outstanding taxes - calculated on total including or excluding penalty?

    Hi all,

    I phoned SARS today with a query regarding the interest and penalty that should be paid on a late payment of EMP201 taxes (PAYE, UIF, SDL).

    I always calculated the interest on the total outstanding including the penalty (ie. if the PAYE/UIF/SDL was R500, penalty of R50 and then interest calculated on R550). The person that I spoke to at SARS said that interest should be calculated on the amount excluding the penalty (ie. R500 for my example).

    Which is the correct method?

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    Interest is raised on the capital amount only - in your example the R500.00
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