South Africa’s Income Tax Act No. 58 of 1962 provides for the taxation of income from employment, including the tax treatment of fringe benefits such as company cars and housing.
The calculation is based on a progressive rate structure with marginal rates ranging from 0% to 45%. The marginal rate applicable to your taxable income is calculated by considering your taxable income and the total number of brackets you fall within.
Taxable income includes all amounts that are assessable in terms of the Income Tax Act, including salary, certain fringe benefits, allowances, and commissions.
Salary is defined as wages or remuneration received by an individual for services rendered or to be rendered in connection with employment.
Income Tax Act No. 58 of 1962 provides for the taxation of income from employment, including the tax treatment of fringe benefits such as company cars and housing.
How much tax do you pay on your salary in South Africa?
Tax is a word that is often used in the context of money. The word has been derived from the Old French word “tax” which means “a rate or charge, typically one imposed by a government.”
In South Africa, tax on salary is calculated as follows:
The gross income (before deductions) minus any allowable deductions (e.g., pension contributions) equals taxable income.
Taxable income multiplied by the applicable tax rate equals the amount of tax due.
