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sars contractor

December 1, 2016

Notes about South African Revenue Service and how Independent Contractors are taxed

🔗 When are you an independent contractor according to SARS?

Criteria

If you answered “yes” to each of the first four questions, Sars will consider you an employee of the company and not an independent contractor.

Three possible scenarios

You ARE an Independent Contractor. You should have no PAYE (employee’s tax) deducted from your income. You need to register for Provisional Tax and you should be responsible for your own tax affairs. Make use of the Local Business Income section of your ITR12 to declare your incomes/expenses.

You are an Independent Contractor, BUT SARS will want your employer to deduct PAYE (employee’s tax) at 25%. Your income must be coded to 3616 on your IRP5. You may deduct your business related expenses.

You are NOT an Independent Contractor. Your employer should be deducting PAYE (employee’s tax) from you every month based on the normal tax tables.

🔗 What is a provisional taxpayer?

Provisional taxpayers are people who earn income other than a salary / remuneration.

🔗 SARS important dates

Individuals

Important Dates