One Man Sole Proprietor Paye

[AndreH]

Hi Guys,
Can it work if a sole proprietor registers for PAYE, but employees no other employees than himself and pay a monthly salary type PAYE amount for himself...
So he'll get an IRP5 end of year and probably need to claim the paye credits against his actual profits declared. mmm ?

[AndreH]

SOLE PROPRIETOR - PAYE
Question:
If a person works as a Sole Proprietor eg Accountant but does not have staff, should he register for PAYE for himself ? Secondly, if yes, how do you issue the IRP5 at year end. Example, my client was registered for PAYE and R500 pm paid over. The income statement was drawn up and the total profit for the year is the clients income. An IRP5 was issues with zero salary but PAYE showed. This caused a problem with the tax return as it will not allow an IRP5 with no income.

Answer:
No, a sole trader with no employees would not register as an employer. He must pay his tax through the provisional tax system and on assessment. Ni IRP is issued.

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Related categories: South Africa Technical and Standards Tax
Submitted by siteadmin on Mon, 2010-07-19 17:11

[Mike Simmonds]

There is nothing to stop a Sole Proprietor from registering and using the PAYE system. The Business Income on the IT12 Tax Return now takes into account Income included on IRP5's whereas in the past it was more of a challenge.