Taxes can be a bit confusing, especially if you’re young and you’ve just started earning a taxable salary. That’s why we’d like to demystify them, once and for all. Here are 4 facts you should know about your taxes.
What is Personal Income tax?
There are many different types of taxes, and which one you should be paying will depend on your type of employment and income sources. Personal Income tax is the tax that gets deducted from your salary if your salary meets the requirements to be taxable. This means that if you’re younger than 65 years of age and your annual salary is R87 300 or above, then you’re expected to pay income tax.
You have to register for income tax
If your salary meets the requirements for you to pay tax, then you must register with the South African Revenue Service (SARS) as a taxpayer. You need to make sure you have a tax number from SARS, so that your employer can deduct taxes from your taxable salary every month.
You have to submit a tax return
After being registered as a taxpayer, you’ll need to submit an annual income tax return to SARS. This is where your income will be assessed during the “tax year” which for 2021 runs from 1 March 2020 – 28 February 2021. So, every year SARS will announce its Tax Season, where you’ll then need to submit your annual income tax return. This should be submitted via an ITR12 form.
Where and when to file your tax return
This year, you can file your tax return from 1 July to 23 November 2021. You can do so via the SARS online portal here or by downloading their MobiApp. You can also do this at a SARS branch by first making an appointment here. If you don’t submit your tax return on time, you may be penalised and required to pay an admin penalty fee.
Your employer has to issue you with an IRP5
When submitting your tax return, you need to make sure that your employer has issued you with an IRP5 certificate. This will be issued to you at the end of every “tax year”, and it should contain all your financial information such as your income, deductions, etc.
Make sure that you stay on top of your taxes every year so that you don’t get in errors with the taxman. Tax issues can be a bit tricky and confusing, so if you’re unsure about anything then you should contact SARS by sending them a tax-related query here.