[Question] PAYE / Income Tax

[SSS100]

I currently have a fulltime job and earn a basic salary.
But now also have another job (semi fulltime) and i spend less time on it.
Each company will pay me separately

How will i be able to do my Tax Returns and end of year if I have two jobs?

[geraldenek]

There is two options:

1. Both companies will provide you with an IRP5 certificate with paye deducted. Just make sure with the combination of income that you don't fall in the next tax bracket and have to pay more money in the end of the tax year.

2. If the 2nd company does not deduct PAYE you will need to look at your total income and then register for provisional tax and pay the difference in Aug and Feb each year.

[SSS100]

Dear Geraldene,

Thank you for the response.
How can i tell what bracket i will fall into? The amounts are as follows:
Current salary R17,047 gross
New salary R3,000 gross

Regards

[geraldenek]

on your current salary the tax is R2490.50 p/m
on your new salary the tax is R0 p/m

but if you combine the two the tax is R3263.68 p/m

with the amount received from the "new" job i doubt that they will deduct paye and you will have to register for provisional tax and pay the difference of R4639.08 ((3263.68-2490.50)*6) on a bi-annual basis

[SSS100]

Hi,

This SARS thing is confussing.
If I get it right, the r3k does not have tax as it falls below the "tax threhod"
Why add it to the r17k then?

Thanks

[geraldenek]

Because SARS looks at your combined income for the year where employers only look at the portion they pay to you and deduct that individual paye.

But because SARS look at all your income you will be taxed on the full amount the R20k and if taxed on the R20k you have paid to little tax for the year as you only paid on the R17k. And that is why i said rather register for provisional tax.

[SSS100]

Oh, now i see.
Thank you so much, you habe been very helful my dear.

Have a lovel evening

[SSS100]

Hi,

sorry, just last thing. the provisional tax registration...is registration only done in Aug & Feb?
for example, we are now in Oct. will i have to wait until next Feb to register?

[Dave A]

You can register as a provisional taxpayer at any time - it's just that provisional tax returns (and payments) are only made in August and February.

This probably is the best way to go, but in the interests of completeness there are a couple of other options.

The one option is to ask your second employer to tax you as a part time employee - essentially that would be 25% of what they're paying you. This would probably get your PAYE total close enough to what you will owe when you do your tax return not to incur penalties. But you probably will have to pay some money in on assessment.

The second option is to ask one or the other to deduct a voluntary PAYE contribution amount on top of what they are obliged to deduct from your earnings. However, if they're using payroll software, you might not be popular as I suspect it'll take a bit of fiddling to pull off without disrupting the calculation of normal PAYE due.

[SSS100]

Noted, I will ask the 2nd employer to also deduct, then also register for prov tax

Thanks Dave

[brown]

Hi!

Just to deviate a little on the subject, I have a dilemma: I was retrenched in Feb 2011. My last Salary payment was in November 2010. My ex-employer has set the 'date to' on my IRP 5 as 31 December 2011? Is this correct? They still havent settled the outstanding salaries and the settlement. She refuses to change the date. Which date should reflect on my IRP as the last date of employment?

[Dave A]

I was retrenched in Feb 2011. My last Salary payment was in November 2010. My ex-employer has set the 'date to' on my IRP 5 as 31 December 2011? Is this correct?

Could you double-check you posted those dates correctly, particularly the 'date to' for the IRP5.

Assuming you intended 31 December 2010 -

Ultimately your liability will be calculated by SARS based on your income for the financial year. As long as what the company has deducted from you for PAYE is correctly reflected on the IRP5 there's no harm done to you from a tax point of view.

[brown]

Could you double-check you posted those dates correctly, particularly the 'date to' for the IRP5.

Assuming you intended 31 December 2010 -

Ultimately your liability will be calculated by SARS based on your income for the financial year. As long as what the company has deducted from you for PAYE is correctly reflected on the IRP5 there's no harm done to you from a tax point of view.

I meant the 31st December 2010. Thanks for the response.