Finance Minister Pravin Gordhan’s Budget Speech introduced several changes that will have a direct impact on payroll and HR across South Africa. Sage VIP says that administrators should have updated their payroll systems as from 1 March 2013 to reflect the stipulated changes.
“Not implementing these changes in the first period of the new tax year, will result in incorrect PAYE calculations,” says Karen Schmikl, legislation manager at Sage VIP.
2013’s tax tables
The tax tables for individuals and special trusts for the year ending 28 February 2014 are:
Schmikl says the tax rebate amounts have also had changes in line with inflation: “The primary tax rebate amount has been adjusted to R12 080, while a secondary rebate for persons of 65 years and older is set at R6 750. A tertiary rebate for persons of 75 years and older is R2 250.”
The tax thresholds have also been adjusted.
- Below the age of 65, the tax threshold has been set at R67 111
- Ages 65 to 74 now have a tax threshold of R104 611
- Ages 75 and over have a tax threshold of R117 111.
Subsistence allowance affected too
“An employee is entitled to receive a subsistence allowance when the employee is obliged to spend at least one night away from his or her usual place of residence.
“The value of the deemed allowance or advance where the accommodation is in South Africa has been amended to R319 per day for meals and incidental costs and R98 per day for incidental costs only.
“The schedule of rates for accommodation outside the country has been published on the SARS website,” says Schmikl.
Medical tax implications
The medical tax credits have also been increased to R242 for the main member and first dependent and R162 for every additional dependent thereafter.
Travel allowance raised slightly
Travel allowance costs have also been adjusted. “The SARS deemed rate per kilometre increased from R3.16 to R3.24. The fixed cost, fuel and maintenance cost values have been amended and it is advisable to recalculate the value of all employees’ travel allowances from 1 March 2013,” says Schmikl.
“There were speculations that an additional tax bracket would have been added for higher income earners. However, with the small number of individuals in the top income bracket, this would not have made a significant contribution to the revenue required,” says Schmikl.