Table of Contents

## How do you calculate PAYE in South Africa?

PAYE = (Total tax payable – total rebates) / 12 Let’s look at an example: Sipho is 29 years old and in 2017/2018 tax year earns a fixed monthly salary of R20 000. His provident fund contributions total R2000 per month and he receives a R1000 monthly travel allowance.

## What is the minimum salary to pay PAYE in South Africa?

R87 300 if you are younger than 65 years. If you are 65 years of age to below 75 years, the tax threshold (i.e. the amount above which income tax becomes payable) is R135 150. For taxpayers aged 75 years and older, this threshold is R151 100.

**How much PAYE should I pay South Africa?**

2020 tax year (1 March 2019 – 29 February 2020)

Taxable income (R) | Rates of tax (R) |
---|---|

1 – 195 850 | 18% of taxable income |

195 851 – 305 850 | 35 253 + 26% of taxable income above 195 850 |

305 851 – 423 300 | 63 853 + 31% of taxable income above 305 850 |

423 301 – 555 600 | 100 263 + 36% of taxable income above 423 300 |

### How do I calculate my employees taxes?

Current FICA tax rates The current tax rate for social security is 6.2% for the employer and 6.2% for the employee, or 12.4% total. The current rate for Medicare is 1.45% for the employer and 1.45% for the employee, or 2.9% total. Combined, the FICA tax rate is 15.3% of the employee’s wages.

### How is monthly salary calculated in South Africa?

Employees who work a 6 day week are deemed to work 26 days to complete a full month. First calculate the monthly wage as follows: Monthly Wage = Weekly Wage x 4.33 (Weeks per month) Then use the formula in the preceding slide. Per fortnight : divide by 2 to get weekly wage, then follow formula above.

**What is the formula to calculate payroll tax?**

To determine each employee’s FICA tax liability, multiply their gross wages by 7.65%, as seen below. These are the amounts you withhold from employee wages and send to the IRS. Now, onto calculating payroll taxes for employers….FICA tax example 1.

Employee | Pay |
---|---|

Employee C | $2,000.00 |

## How do you calculate monthly payroll?

Divide the employee’s or department’s total yearly pay by the number of pay periods. If your pay dates are weekly, divide the number by 52. If you pay biweekly, divide by 26. For semi-monthly or monthly payroll, use the number 24 or 12, respectively, in your division calculation.

## How do you calculate tax on R516 000 annual income?

In row 6 below, we can see that annualised the person will earn R516 000 (48 000 x 10 +36 000) IF things continue as is. This means that we need to calculate the tax payable on this amount (R122 220) but then subtract the tax we’ve paid to date (R7 230.91) and divide the answer by the number of months left.

**Are You Up to date with your PAYE?**

You know the salary, you know the PAYE that should be paid, and you can divide it evenly over the years and be fairly sure that by the end of the year, the person will be up to date. But what about people who earn a variable salary through things like commissions. One month they may shoot the lights out and the next month will be dead.

### What percentage of travelling allowance should be included in remuneration?

80% of the travelling allowance must be included in the employee’s remuneration for the purposes of calculating PAYE. The percentage is reduced to 20% if the employer is satisfied that at least 80% of the use of the motor vehicle for the tax year will be for business purposes.