Which Employees Pay Paye Tax in South Africa?

​In South Africa, PAYE (Pay-As-You-Earn) tax applies to different types of employees based on their earnings. Let’s break down each case with some example figures.




Employees Who Pay Paye Tax in South Africa

Salaried Employees

If you’re a salaried employee and earning above the tax threshold, you’ll be paying PAYE. For example, if you’re earning R20,000 per month (which totals R240,000 per year), your employer will deduct PAYE from your salary. This deduction ensures that you’re compliant with SARS. Whether you receive fringe benefits or not, you’re still liable. For more information, check out this guide.

Commission Earners and Freelancers

If you earn R30,000 one month but only R10,000 another month, PAYE can fluctuate since it’s based on what you earn. However, if you make more than the R95,750 per year threshold, you’ll need to pay PAYE on the higher earnings. Even though your income varies, it’s important to ensure that PAYE is deducted correctly. You can learn more about how this applies to freelancers and commission earners from the SARS website here.

Employees with Multiple Income Streams

If you have a full-time job and a side hustle, you’ll need to be careful. For example, if you’re making R15,000 from your job and another R8,000 from a part-time gig, you might end up in a higher tax bracket. That means you could owe SARS more at the end of the year if PAYE hasn’t been deducted correctly from all sources. It’s essential to understand your payslip, and this guide explains how these deductions work.

READ  SARS Tax Tables 2024 - 2025: Monthly Income PAYE

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