How Does Income Tax Work in South Africa?
What is income tax?
Income tax is a tax or levy imposed by a government on income made by businesses and individuals in a country.
How does income tax work in South Africa?
South Africa has a residency-based taxation system, meaning that permanent or temporary residents pay taxes on their worldwide earnings. Residents are those with citizenship or residence permits. Non-residents will only pay South African income tax on income earned within the nation.
What percent of income is taxed?
Your earnings and filing status determine the percentage of your income that is taxed. Theoretically, the more you earn, the more you pay.
Who is in charge of collecting income taxes?
The South African Revenue Service collects income tax in South Africa (SARS).
What are the monthly salary tax brackets in South Africa?
The tax brackets which apply to the 2022/23 tax year are 18%, 26%, 31%, 36%, 39%, 41% and 45%.
What is the income tax threshold in South Africa?
The tax threshold is R91 250 for taxpayers younger than 65 years, R141 250 for taxpayers 65 years of age to below 75 years, and R157 900 for those aged 75 years and older.
How much income is tax-free in South Africa?
Income of R23,800 per annum earned by any natural person under 65 years of age and R34,500 per annum earned by persons aged 65 years and older are exempted from income tax.
What is the penalty for not paying taxes in South Africa?
Taxpayers who do not pay the exact amount of tax face tax penalties of between 5% and 200% of the tax not paid or short paid.
