Example – Employees’ tax
Mr X (aged 50) earns a salary of R15 000 per month for the year ended 28 February
2024. Assuming that he has other income of R40 000 for the year and is not entitled
to any deductions, his tax payments for the year will be as follows:
Employees’ tax
Because he receives remuneration his employer will have to withhold employees’ tax
from his monthly salary. The employees’ tax is calculated according to tables issued
by SARS
. For Mr X's salary of R15 000 per month, his employees’ tax would be as follows:
- For the first R1950 (R0 – R1950), the tax rate is 18% - R351
- For the next R3050 (R1951 – R5000), the tax rate is 25% - R762.50
- For the next R4550 (R5001 – R9550), the tax rate is 30% - R1365
- For the remaining R5450 (R9551 – R15000), the tax rate is 35% - R1907.50
Total employees’ tax per month = R351 + R762.50 + R1365 +R1907.50 = R4386
For the year, Mr X's total employees’ tax would be R4386 x 12 = R52,632
Income tax
Mr X's total income for the year is R15,000 x 12 + R40,000 = R220,000.
Based on the tax brackets set by SARS, Mr X would be taxed as follows:
- For the first R195,850 , the tax rate is 18% = R35,253
- For the next R220,000 – R195,851 = R24,149, the tax rate is 26% = R6,284.74
Total income tax for the year = R35,253 + R6,284.74 = R41,537.74
Therefore, Mr X's total tax payments for the year would be R52,632 (employees’ tax) + R41,537.74 (income tax) = R94,169.74.