With Human Resources becoming a driving force in all successful, growing businesses, the need for a system to be the driving force has become more evident. Our Human Resource Modules cater for recording and managing of all HR related information, each module shares the data in the base module to complete the integrated Human Resource Management Cycle.

1. CRS SARS TAX
TRAINING

2. Balance of remuneration
Is Remuneration less:
• Pension fund contributions
• Retirement fund contributions
• Income protection premiums
• Donations
Note: there are limits to all of these

3. Annual equivalent
• Rem received x pay periods/periods worked
• Eg Remuneration to date R70 000
• Periods worked 7
• Periods in year 12
• Annual equivalent = R120 000

4. Tax directives (IRP3)
• Issued by SARS
• Only valid for the year stated thereon
• May not act on photocopies
• No deviations
• Can be electronic
• Must apply % of a directive before taking into
account allowable deductions ( pens, RA etc.)

5. Skills development levy
• 1% of the leviable amount
• Determined on the balance of remuneration
Exemptions:
• Employee employed for less than 24 hours
per month
• Learners

6. Unemployment insurance fund
• 1% of employees remuneration
• Based on total amount of remuneration
• ER and EE contribute same amount
• Earnings limit of R149 736.00 per annum

7. Standard income tax on employees
(SITE)
• Applicable only on annualised net
remuneration up to R60 000
• Any income greater than this represents PAYE
• Note travel allowances are PAYE

8. Record keeping
• Remuneration paid
• Tax deducted
• Income tax reference number
• Available for 5 years

9. RFI vs NRFI
• Retirement funding income is the portion of
the employees income that is used in the
calculation of employee’s or employer’s
contribution to a pension or provident fund
• NRFI is the balance of the remuneration that
is not used for retirement funding income

10. Pension fund contributions
• Limited to the greater of
• R1750
• 7.5% of retirement funding income
• Arrear contributions R1800 annually

11. Retirement annuity funds
• Greater of
• R1750
• R3500 less allowable current pension fund
contributions
• 15% of Non retirement funding income

12. Donations
• Maximum of 5% of remuneration after
deducting
• Allowable pension fund contributions
• Allowable RAF contributions
• Allowable income protection policy
premiums

13. Gratuities
• Is an amount paid to an employee by an
employer in respect of termination of service
• Examples:
• Normal termination of service as a result of
resignation of discharge;
• Retirement or death;
• Termination due to retrenchment

14. Gratuity tax exemptions
• May make use of lifetime exemption R315000
available for exemption of retirement fund lump
sums
Conditions:
• Must have attained the age of 55 or
• Termination is due to ill health or
• Is as a result of the employer ceasing trading or
retrenchment.
Note: notice pay may not be included in this figure.

15. Directors of private
companies/members of close
corporations
• A director is deemed to have received a
minimum amount of remuneration every month
• Y=T/N where;
• Y=monthly amount to be determined
• T=balance of remuneration iro previous year
• N=number of completed months in previous
year
Note: if more than 75% of T consists of fixed
monthly income then actual remuneration must be
used.

16. Students
• Taxed in the same manner as any other
employee
• Refer to following slide of standard vs non
standard employment.

17. Standard/non standard employment
• Non standard -25% tax deducted on balance
of remuneration
• Standard – refer to tax tables
Scenario Deduction
Required to work min of 22 hours per week and is in standard Deduction tables
employment
Not in standard employment and works less than 5 hrs per 25% deduction
day and earns <R261 for that day
Not in standard employment and works at least 5 hrs per day 25% deduction
and earns >R261 for that day
Not in standard employment and works min 5 hours per day No tax deducted
and earns less than R261 for day

18. Age Related Rebates/Concessions
• >=65 on last day of tax year
• Qualifies for an additional tax rebate(R6390)
• All medical aid contributions are tax
deductible
• >=74 on last day of tax year
• Qualifies for an additional rebate.(R2130)

19. Leave Pay
• Accrued leave pay that is encashed must be
treated in the same manner as a bonus

20. Advance Salary
• Will be subject to employees tax when it is
paid by the employer to the employee

21. Overtime Payments
• Must be treated as normal income for tax
purposed (not as a periodic payment)

22. Annual Payments
• Examples
• Annual bonus
• Incentive bonus
• Leave pay on resignation
• Encashment of leave
• Merit awards
• Backdated payments

23. Taxable fringe benefits
• Acquisition of an asset at less than actual value
• Right of use of motor vehicle
• Right of use of asset
• Meals, refreshment vouchers
• Free/cheap accommodation
• Low interest/interest free loans
• Medical fund contributions paid on behalf of an
employee

24. Non-taxable fringe benefits
• Uniform allowance
• Transfer costs

25. Employment income exemptions
• Income derived outside RSA for a period or
periods exceeding 183 full days in aggregate
during any 12 month period and
• For a continuous period exceeding 60 full
days during that period.

26. Right of use of a motor vehicle
• Value of the vehicle is the purchase price inclusive of
VAT and exclusive of finance charges
• If the vehicle is >12 months old when first allocated to
the employee the above value can be reduced by 15%
for each completed cycle
• Fringe benefit is 3.5% of the determined value of the
vehicle if ER bears cost of maintenance and fuel.
• Employer bears cost of maintenance only 3.5% -
.22%=3.28%
• Employee bears cost of fuel and maintenance 3.5%-
.22%-.18% = 3.1%
• Where maintenance is included in the purchase price
use 3.25%

27. Travel allowance
• 80% of the allowance is taxable
• If usage is guaranteed to be greater than 80%
for business then only 20% is taxable
• A log book is required to claim business km at
the end of a year.
• If no log book is submitted then 100% of
allowance is taxable

28. Reimbursive travel
• R3.16 per km or the determined rate
Scenario Deduct SARS Code
PAYE?
Fixed allowance paid Yes 3701
Reimbursed at <= prescribed rate AND <8000km AND No 3701
no travel allowance paid
Reimbursed at <= prescribed rate AND <8000km AND No 3702
Receives a travel allowance Yes 3701
Reimbursed at <= prescribed rate AND >8000km AND No 3702
no travel allowance paid
Reimbursed at <= prescribed rate AND >8000km AND No 3702
Receives a travel allowance Yes 3701
Reimbursed at a rate exceeding the prescribed rate No 3702

29. Low interest or interest free loans
• Exemptions
– Casual loans if the aggregate of these loans does not
exceed the sum of R3000 at any time.
– Casual loans are granted on an irregular basis
– Employee study loans
– No benefit if the interest charged is greater than the
official interest rate.
– If interest charge is less than official interest rate
then fringe benefit = (official interest rate – interest
rate charged x balance)

30. Subsistence allowance
Need to spend a night away from normal
residence to qualify
Local
• Where employer pays for meals and
accommodation R93 per day
• Where the employer only pays for
accommodation R303 per day
Foreign
Refer to the table of values per country

31. Medical aid tax credits <65 years old
• Changes from a cap of R720+R720+R440+ to
Tax credits of R230+R230+R154+
• Only applicable to employees <65 years old
Example:
Medical aid contribution R1500
2 Dependents (Tax Credit 460)
Calculate the tax before taking credit into
account
Reduce the tax payable by the tax credit.

32. Medical aid tax >65 years old
• Medical aid contribution treated as a fringe
benefit as well as a deduction for tax
purposes
• Tax neutral

33. CRS tax calculator – determine limits
• Regular income (3)
• NRFI regular(26)
• Bonus (4+5)
• Arrear pension (32) Limit?
• Donations (96) Limit?
• RA regular (11) Limit?
• RA arrear contribution
• Pension (8) Limit?
• Medical aid (9)

34. CRS tax calculator – limits
• Arrear pension (32) Limit =R1800
• Donations (96) Limit=5% of balance of rem
• RA regular (11) Limit=greater of:
• R3500 – pension fund contrib.
• 15% of NRFI
• R1750
• RA arrear contribution Limit= R1800
• Pension (8) Limit=7.5% of RFI
• Medical aid (9) See tax credits

35. CRS tax calculator exercise

36. Legislation references
• Guide for employers iro employees tax
• Guide for employers allowances
• Guide for employers fringe benefits
• Guide for subsistence travel foreign
allowance
• Guide for rate per km schedule external

37. Approved vs non approved funds
• Insurance policies