Income tax is the normal tax which is paid on your taxable income.
Examples of amounts an individual may receive, and from which the taxable income is determined, include –
- Remuneration (income from employment), such as, salaries, wages, bonuses, overtime pay, taxable (fringe) benefits, allowances and certain lump sum benefits
- Profits or losses from a business or trade
- Income or profits arising from an individual being a beneficiary of a trust
- Director’s fees
- Investment income, such as interest and foreign dividends
- Rental income or losses
- Income from royalties
- Pension income
- Certain capital gains
Who is it for?
You are liable to pay income tax if you earn more than: For the 2021 year of assessment (1 March 2020 – 28 February 2021)
- R83 100 if you are younger than 65 years.
- If you are 65 years of age or older, the tax threshold (i.e. the amount above which income tax becomes payable) increases to R128 650.
- For taxpayers aged 75 years and older, this threshold is R143 850.
Top tip: You do not need to submit a return if ALL the criteria below apply to you:
- Your total employment income/salary for the year (March 2018 to February 2019) before tax (gross income) was not more than R500 000; and
- You only received employment income/salary for the full year of assessment (March 2018 to February 2019) from one employer; and
- You have no car allowance/company car/ travel allowance or other income (e.g. interest or rental income); and
- You are not claiming tax related deductions/rebates (e.g. medical expenses, retirement annuity contributions other than pension contributions made by your employer, travel).
The rates of tax chargeable on taxable income are determined annually by Parliament, and are generally referred to as “marginal rates of tax” or “statutory rates”.
The rate of tax levied on an individual is set on a sliding scale which results in the tax increasing as taxable income increases. Every year, the Minister of Finance announces the rates to be levied by publishing the applicable tax tables during the annual budget speech.
What steps must I take to ensure compliance?
Step one: You must register for income tax
If you earn a taxable income which is above the tax threshold (see above), you must register as a taxpayer with SARS.
If you are not yet registered, you would only be required to visit a SARS branch to register for the first time. All additional tax type registration can be performed from eFiling without having to visit a branch again. You can register once for all different tax types using the client information system.
Kindly note that the ‘IT77 registration form for Individuals’ was discontinued and that the only way to register is to visit a SARS branch where the friendly staff will register you on our system.
Important: Make sure you have all the supporting documents (relevant material) needed. We won’t be able to register you unless all the documents are received.
Step two: You must submit a return If you are registered for income tax, you will be required to submit an annual income tax return to SARS. See the Tax Tables. The 2019 year of assessment (commonly referred to as a “tax year”) runs from 1 March 2018 to 28 February 2019. Every year, SARS announces its Tax Season, a period during which you are required to submit your annual income tax return. The Tax Season for 2019 opens on 1 August 2019 for branch filers and 1 July 2019 for eFilers. The income tax return which should be completed by individuals is known as the ITR12 form. The updated ITR12 Comprehensive Guide will be available once the Tax Season opens. If you have forgotten your password, you can reset by calling our Contact Centre and following a simple procedure.
When should it be submitted?
- 31 October 2019 for branch filing.
- 4 December 2019 for non-provisional taxpayers who use eFiling and the MobiApp.
- 31 January 2020 for provisional taxpayers who use eFiling.
If you don’t submit your income tax return on time, you may be liable for penalties.
How should it be submitted?
Online: The easiest and quickest way to file a tax return is online, by making use of SARS eFiling or the MobiApp. You must, however, first register for eFiling on the SARS eFiling website or using the MobiApp. We have a page where we explain to you in detail how to register for eFiling. Once registered, you can complete the online form to create your return. Note that you will start by completing the first page of the form which contains several questions regarding the nature of your tax affairs (referred to as a return “wizard”). Completion of this part will automatically tailor the tax return to your specific tax requirements. In a branch: The tax return can also be requested by visiting any SARS branch office. To find your nearest branch visit our branch locator. (Please note that there may be delays and queues during filing season, which is why SARS promotes the use of eFiling as a medium for return submission) Top Tip: When completing your return, you will require the following documentation in order to verify the existing, pre-populated information that appears in the return, as well as to complete any remaining portions:
- IRP5: This is the employees’ tax certificate your employer issues to you.
- Certificates you received for local interest income earned.
- Any other documentation relating to income received or accrued, such as remuneration that has not been reported to SARS by your employer, or business or investment income, etc.
- Details of medical expenses paid and medical scheme contributions made.
- The relevant certificates reflecting your retirement annuity fund contributions made.
- A logbook and other documents in support of business travel expenses (if the travel allowance is part of your remuneration or if you have the right of use of a company car taxable benefit).
- Any other documentation relating to the allowable deductions you wish to claim.