Understanding Tax On Your Payslip – As Easy As 1 + 1

With some basic professional training with practical examples, understanding the basics of tax can easily be learned with basic arithmetic.

In addition, the purpose of a comprehensive tax training workshop is to demonstrate that some of the below beliefs are easily proved otherwise and clearly understood:

1. Fringe Benefits are taxed at different rates

Many payroll and finance specialists alike believe that fringe benefits are taxed at different rates, or a different tax table is utilized to determine the tax on fringe benefits.

With comprehensive tax training, it can be proved that the tax on fringe benefits utilizes the same tax table which is gazetted for individuals on an annual basis.

2. My income is taxed at a fixed percentage according to my marginal rate

This common misconception is totally inaccurate. South Africa’s tax table utilises a progressive system. This means that a portion of your income is taxed at a specific percentage as your income increases through the tax table.

With the correct training, employees will understand that their effective tax rate is actually much lower than their marginal tax rate.

3. Cost to Company is taxed higher than a Basic Plus remuneration structure

This assumption in the market is completely inaccurate. With the correct training, employees learn that tax is calculated on each payroll element and not on the remuneration structure adopted.

The remuneration structure utilized in a company makes not different to the tax.

4. IRP5 codes taxes items at different tax rates

Another misunderstanding is that the IRP5 codes dictate different tax rates to utilize for tax calculations.

This is totally inaccurate as well and the specific IRP5 codes dictate how each element should be treated for tax calculation purposes only.

5. You need a degree to understand the mechanics of PAYE

All employees who understand basic arithmetic can understand the mechanics of PAYE while performing practical examples as opposed to a static powerpoint presentation.  With basic mathematical skills understanding PAYE is as easy as 1 + 1.

Professional Tax Training

As daunting as it is, understanding PAYE on your payslip is not as complex as employees may think. By deconstructing the mechanics and understanding the basics with practical examples, the correct tax training can be an enjoyable experience for all employees alike.

Whether you are an experienced payroll, HR, finance or tax professional, or a general employee, practical tax training paves a solid foundation in understanding this key component on your payslip.

Article: TaxConsulting

Share:

Facebook
Twitter
Pinterest
LinkedIn
On Key

Related Posts

11 Advisors

“SHUT UP, SHUT UP, SHUT UP!” – These inspirational words came from South Africa’s (maybe not so honourable) Minister of Police, Bhekokwakhe “Bheki” Hamilton Cele.