Personal Income Tax (PIT)
Personal Income Tax (PIT)
What is Personal Income Tax (PIT)?
From the SARS website (articles combined and lightly edited for accuracy, clarity, emphasis and spelling):
“Personal income tax is the normal tax that is paid on your taxable income. Examples of amounts an individual may receive, and from which the taxable income is determined, include –
- Remuneration (income from employment), such as salaries, wages, bonuses, overtime pay, taxable (fringe) benefits, allowances, and certain lump sum benefits
- Profits or losses from a business or trade
- Income or profits arising from an individual being a beneficiary of a trust
- Director’s fees
- Investment income, such as interest and foreign dividends
- Rental income or losses
- Income from royalties
- Pension income
- Certain capital gains
Who are liable for PIT?
For the 2020 year of assessment (1 March 2019 – 29 February 2020), the tax threshold is:
- R79 000 if you are younger than 65 years.
- If you are 65 years of age or older, the tax threshold (i.e. the amount above which income tax becomes payable) increases to R122 300.
- For taxpayers aged 75 years and older, this threshold is R136 750.
You do not need to submit a return if ALL the criteria below apply to you:
- Your total employment income/salary for the year (March 2019 to February 2020) before tax (gross income) was not more than R500 000; and
- You only received employment income/salary for the full year of assessment (March 2019 to February 2020) from one employer; and
- You have no car allowance/company car/ travel allowance or other income (e.g. interest or rental income); and
- You are not claiming tax related deductions/rebates (e.g. medical expenses, retirement annuity contributions other than pension contributions made by your employer, travel).
How do I register?
If you earn a taxable income that is above the tax threshold (see above), you must register as a taxpayer with SARS.
If you are not yet registered, you would only be required to visit a SARS branch to register for the first time. All additional tax type registration can be performed from eFiling without having to visit a branch again. You can register once for all different tax types using the client information system.
Kindly note that the IT77 registration form for Individuals’ was discontinued and that the only way to register is to visit a SARS branch where the friendly staff will register you on our system.
How do I submit a return?
If you are registered for income tax, you will be required to submit an annual income tax return to SARS. See the Tax Tables. The 2020 year of assessment (commonly referred to as a “tax year”) runs from 1 March 2019 to 29 February 2020. Every year, SARS announces its Tax Season, a period during which you are required to submit your annual income tax return. The income tax return which should be completed by individuals is known as the ITR12 form. The updated ITR12 Comprehensive Guide will be available once the Tax Season opens. If you have forgotten your password, you can reset it by calling our Contact Centre and following a simple procedure.
When should I submit a return?
- 1 September to 16 November 2020 for non-provisional taxpayers who file online.
- 1 September to 22 October 2020 for taxpayers who cannot file electronically can do so at a SARS branch by appointment.
- 1 September 2020 to 31 January 2021 for provisional taxpayers who file electronically.
- IRP5: This is the employees’ tax certificate your employer issues to you.
- Certificates you received for local interest income earned.
- Any other documentation relating to income received or accrued, such as the remuneration that has not been reported to SARS by your employer, or business or investment income, etc.
- Details of medical expenses paid and medical scheme contributions made.
- The relevant certificates reflecting your retirement annuity fund contributions made.
- A logbook and other documents in support of business travel expenses (if the travel allowance is part of your remuneration or if you have the right to use a company car taxable benefit).
- Any other documentation relating to the allowable deductions you wish to claim.
SARS Automatic Assessments:
In August, we will be assessing a significant number of taxpayers automatically. If you accept the outcome you do not have to file a tax return at all. We auto-assess based on the data we receive from employers, financial institutions, medical schemes, retirement annuity fund administrators, and other 3rd party data providers. If you have not yet received your IRP5/IT3(a)s and other tax certificates like medical certificate, retirement annuity fund certificate, and other 3rd party data that are relevant in determining your tax obligations, you should immediately approach your employer or medical scheme or retirement annuity fund or other 3rd party data providers to make sure that they have complied with their submission requirements.
Through the increased use of third-party data, SARS will be completing your tax return for you more accurately than ever. Where we have the required information, we will provide you with a proposed assessment without the need to file a tax return. This enables you to view, accept, or edit your proposed assessment from the comfort of your home or place of work using eFiling or SARS MobiApp.”
All individuals that earned more than R79 000 for the period 1 March 2019 to 29 February 2020 are liable for personal income tax. If you earned less than R500 000 for the period from one employer only, did not receive a car allowance, and did not claim any other expenses you do not need to submit a return.
SARS will automatically assess most individual taxpayers starting in August 2020. If you agree with this assessment you can accept or edit your proposed assessment on eFiling or the MobiApp.
Contact Onestop Accounting if you require any assistance in submitting your personal income tax return and avoid unnecessary administrative penalties and interest payments. We have years of experience submitting personal income tax returns and resolving tax queries with SARS.