Tax Deductions ito Provident Fund

[Nicky4]

Hi All

I can't figure this out , let's say for example, Mrs XYZ earns 50,000 per month and puts away 17% (8.5 Employer / 8.5 Employee), how do I calculate her tax rebate?
For persons not tax literate, reading the SARS booklet doesn't help.. how does the 27.5% and R350,000 cap?? fit in, and the carry over issue?

If someone could explain this in simple terms, I'd very much appreciate the help,

Thanks in advance

[Dave A]

In the simplest terms, you add the employer's contribution to the employee's gross remuneration, and then deduct both the employer and employee contribution from the result to arrive at the employee's taxable income.

One of the things to watch for is that often not all the contribution is actually deductible this way; the portion attributable to income replacement insurance products such as disability cover cannot be deducted.

It's probably also worth stressing (as this discussion may well be found in years to come) that this is the current regime. There have been relatively recent changes when it comes to the tax treatment of provident fund contributions, and it would not be surprising if there were changes at some point in the not too distant future too.

[Andromeda]

This discussion might help https://www.chconsulting.co.za/blog/...nds-simplified

[Nicky4]

Thank you so much Dave and Andromeda, I really appreciate your assistance

[jameshouston135]

if i will pay tax from my monthly income then should i have to deduct another tax amount from my provident fund account.

[Dave A]

if i will pay tax from my monthly income then should i have to deduct another tax amount from my provident fund account.

I believe the taxation laws in the USA are substantially different to those in South Africa.

[Olivia Noah]

In my opinion, you will pay tax from monthly income then you have to deduct another tax amount from the provident fund account.