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Thread: How to Calculate PAYE if employee is on 6 month contract?

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

    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

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    Quote Originally Posted by LizaC View Post
    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

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    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.

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    Full Member UniquelyJanine's Avatar
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    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

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    Quote Originally Posted by UniquelyJanine View Post
    Bracket seems wrong
    It's Namibian

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