Employees' Tax

Who is responsible for deducting and paying employees' tax to SARS?

• The Employee

• The Employer

• The Department of Labour

• The Reserve Bank

Under the Income Tax Act, when is an employer required to submit their monthly EMP201 declaration to SARS?

• By the 15th of the following month

• By the 25th of following month

• By the end of the current month

• By the 7th of the following month

Answer explanation

Par 2(1) of the fourth schedule

Donations made by an employee qualify for a deduction if:

• Effected by employer on behalf of employee

• Obtained s18A certificate

• Do not exceed 10%

• Do not exceed 5%

What is the tax treatment of a severance benefit received by an employee upon retrenchment ?

• It is taxed according to the normal tax tables

• It is exempt from tax if under R550 000

• It is taxed as a fringe benefit.

• It is included in gross income but taxed according to the 2nd schedule

Thabo earns a monthly salary of R30 000. His employer acquired a vehicle on 01 January 2023 and provides him with the right of use of a company car with a value of R240 000 (incl. VAT) on 15 January 2024. How much will be included in Thabo's remuneration for PAYE purposes for the right of use of the company car?

• R13 440

• R11 424

• R12 480

• R6 240

Answer explanation

Determined value = R240 000 (incl. VAT)

>12 months between acquisition by E'R and ROU to E'E

No maintenance plan = x 3.5 %

No of months = 2

Incl. 80 % in remuneration

(240 000 x 85% x 3.5% x 2 = 14 280 x 80%)

= R11 424

A subsistence allowance is only taxable if it exceeds the prescribed SARS daily rates.

• TRUE

• FALSE

The following persons are employees as defined:

• Labour broker

• Independent contractor

• Agent

• Personal Service Provider

What is the penalty for an employer who fails to deduct or pay employees' tax?

• 5% of outstanding tax

• 10% of outstanding tax

• 20% of outstanding tax

• 25% of outstanding tax

Answer explanation

Par 6(1) of the 4th schedule

An employer reimburses an employee for travel expenses at a rate of R5.18 per kilometre for 4 000km travelled during the month for business purposes. How much will be included in the employee's remuneration?

• R20 720

• R18 560

• R2 160

• R1 620

Answer explanation

Reimbursive travel allowance:

(R5.18-R4.64) x 4 000 km = R 2 160

100% of the amount by which the reimbursive rate received exceeds the simplified rate per km, multiplied by the actual business distance travelled constitutes remuneration

Employers are allowed to pay employees their full salary without deducting PAYE if the employees sign an agreement to pay their taxes themselves.

• TRUE

• FALSE

Answer explanation

Admin sections: par 5 -7

The employer is legally obligated to deduct PAYE before paying the employee. No agreement can override this legal requirement. (par 7)