Students who calculate that their holiday earnings are not enough to qualify them to pay taxes are labouring under a delusion. Tax should be deducted, and is not usually recoverable.
Take two examples: Thabo, who spends the whole of December and January working for a
film crew earning R2 500 a month, and Carol-Ann, who works for the same period for a
publishing firm and earns the same amount. Thabo pays R207 a month in tax and Carol-Ann
pays R625 a month in tax.
Firstly, why are they paying different amounts in tax, and secondly, why are they
paying taxes at all when both Thabo and Carol-Ann are earning a total of only R5 000 in
income for the tax year, well below the R17 000 which is the minimum you have to earn in
order to pay taxes?
Thabo's employer is deducting Standard Income Tax on Employees (SITE), which is the
correct tax applicable to him in this case. Christo Henning, media relations officer for
the SA Revenue Service, says paragraph 11B of the Fourth Schedule to the Income Tax Act,
which introduced SITE in 1988, made a specific provision for students. Students will be
liable to pay SITE if they hold only one job or they work at least 22 hours a week. SITE,
once deducted, is not refunded.
The rate at which SITE is deducted is calculated using the tax tables. Your monthly
income is annualised (R2 500 x 12 = R30 000). According to the tax tables, the tax payable
on R30 000 in the 1998 tax year is R2 485, equivalent to R207,08 a month.
Henning warns students to be aware that some employers are under the mistaken
impression that they should deduct tax from students' earnings at a flat rate of 25
percent. This is what Carol-Ann is paying at R625 a month. Henning suggests that you
should check you are not paying 25 percent (normally your tax rate would be far less) and
if you are paying too much, speak to your employer. If that doesn't solve the problem,
visit your local Receiver of Revenue and ask for advice.
You must insist on a salary slip from your employer showing how much tax has been
deducted. If the Receiver of Revenue calculates you have overpaid, you may request a note
to show to your employer which would require the employer to refund you.
If your employer refuses to do so, tell the Receiver of Revenue because your employer
would become liable for prosecution. With SITE it is always your employer, not SARS, that
has to make the refund.
There may be unscrupulous employers who are deducting too much tax from you and not
passing it on to the Receiver of Revenue.
If so, it would be a good idea to bring this to the attention of the tax authorities.
color="#FFFFFF"> EXTRACT FROM THE 1998 TAX TABLES
Annual taxable income
Annual tax payable
Monthly equivalent
R17 000
R 15
R 1,25
R18 000
R 205
R 17,08
R19 000
R 395
R 32,92
R20 000
R 585
R 48,75
R21 000
R 775
R 64,58
R22 000
R 965
R 80,42
R23 000
R1 155
R 96,25
R24 000
R1 345
R112,08
R25 000
R1 535
R127,92
R26 000
R1 725
R143,75
R27 000
R1 915
R159,58
R28 000
R2 105
R175,42
R29 000
R2 295
R191,25
R30 000
R2 485
R207,08
R35 000
R3 985
R332,08