Hi Justin
It seems you've been misinformed by SARS. There are laws regarding 80% of revenue, but they apply to labour brokers and companies, not individuals such as yourself. So on that count, at least, the accountant was correct.
The actual law that is relevant here is exclusionary subparagraph (ii) of the definition of "remuneration" in the Fourth Schedule of the Income Tax Act. What this law basically says is that, even though employers don't normally have to deduct income tax from independent contractors, they are legally required to do so in the following cases:
- the worker is subject to the control of any other person as to the manner in which the worker’s duties are or will be performed, or as to the hours of work; or
- the worker is subject to the supervision of any other person as to the manner in which the worker’s duties are or will be performed, or as to the hours of work; or
- the amounts paid or payable for the worker’s services consist of or include earnings of any description which are payable at regular daily, weekly, monthly or other intervals
Note that, if any of the above 3 points are true for you, they are legally required to deduct tax. I'm assuming, at the very least, that the third point holds (you're paid regularly), if not all of them. I hope that having a reference to the actual law helps to convince your boss and his accountant. Are they deducting tax for the other workers at the company? If not, it's almost certain that your employer is just too lazy to do it correctly. Remind him that the law also says that he will be liable for the taxes to SARS, not you.
The bottom line is that simply calling someone a contractor does not make it so.
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