[Question] How to Calculate PAYE if employee is on 6 month contract?

[LizaC]

Please could some one advise what is the correct way of calculating employee PAYE if that person is on a 6 month contract.
I did the following as I know SARS will use the full 12 months to determine Annual PAYE...but the employee says I am deducting to much from her.

Am I correct see calculations:

Your total tax due each month is there for calculated on

Basic : 7500.00
Allowance: 8000.00
H/all 2/3 : 8333.33
Cell/all: 2000.00

TOTAL SUM: 25 833.33

PAY CALC

25833.33 x 12 =309999.96

59 000 + (28% of the amount exceeding 300 000)

59000 + 28% x 9998.96
=59000 + 2799.71
TOTAL PAYE / annum : 61799.71
Per month 61799.71/12 = 5149.98 Rounded therefor 5150.00 exactly as reflected on your payslip.

I can unfortunately not run the allowance as non-taxable, you will be penalised for it at the end of the tax year. As the allowance is non -reimbursive allowance


That was my reply to employee regarding PAYE and a allowance that she want structured on her salary as Non-taxable

Please advise

[LizaC]

Please could some one advise what is the correct way of calculating employee PAYE if that person is on a 6 month contract.
I did the following as I know SARS will use the full 12 months to determine Annual PAYE...but the employee says I am deducting to much from her.

Am I correct see calculations:

Your total tax due each month is there for calculated on

Basic : 7500.00
Allowance: 8000.00
H/all 2/3 : 8333.33
Cell/all: 2000.00

TOTAL SUM: 25 833.33

PAY CALC

25833.33 x 12 =309999.96

59 000 + (28% of the amount exceeding 300 000)

59000 + 28% x 9998.96
=59000 + 2799.71
TOTAL PAYE / annum : 61799.71
Per month 61799.71/12 = 5149.98 Rounded therefor 5150.00 exactly as reflected on your payslip.

I can unfortunately not run the allowance as non-taxable, you will be penalised for it at the end of the tax year. As the allowance is non -reimbursive allowance


That was my reply to employee regarding PAYE and a allowance that she want structured on her salary as Non-taxable

Please advise

Forgot to mention it is a Namibian employee

[Andromeda]

Your choices are to calculate it monthly or to annualise it, as you have done.

I think your employee is making the assumption that she will not be employed for the rest of the tax year. If that is the case then she will be refunded on assessment.

[UniquelyJanine]

Bracket seems wrong: google for 2018-2019 tax tables
use R63 853 + 31% of the amount above R305 850=65139.48 Annually
-primary rebate R14 067
=51072.48
divide by 12
monthly tax 4256.04

[Andromeda]

Bracket seems wrong

It's Namibian