Page 16 - Nexia Cape Town 2018 TG Digital

PAY AS YOU EARN (PAYE)

General provisions
Any Employee’s remuneration is subject to monthly deductions referred to as
PAYE� Apart from salaries, commission etc� the following income/payments are
also subject to PAYE:
■ 80% of any travel allowance reduced to 20% if the employer is satisfied that
the employee travels at least 80% of the time for business
■ Payments made to directors of private companies (including members of
close corporations) in respect of services rendered
■ Remuneration paid to labour brokers/personal service providers
■ Annuities from Annuity Funds
■ Payments to Personal Service Providers (PSP’s)
See PSP process flow for more detail on entities that will be considered PSP’s� A
PSP is subject to employees’ tax at the rate of 28% if it is a company and 45% if
it is a trust� Expenses to be deducted by a PSP are also limited�
Directors of companies are subject to PAYE according to the same rules applying
to other employees�
Part-time, casual and temporary employees are subject to PAYE at a flat rate
of 25%�
Variable remuneration, such as overtime pay, bonus or commission accrue to the
employee only on the date that it is paid� The employer is also only deemed to
have incurred the variable remuneration on the date of payment�

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