What you need to know about money when you leave school

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How to get SARS on your side when you start working

How to get SARS on your side when you start working

So, you’re done studying and now you’re ready to apply your newfound knowledge in a full time job. As soon as you start working and earning a salary, you need to make sure that you are registered with the South African Revenue Service (SARS). Your new employer should do this for you but it is your responsibility to make sure that it gets done.

Once you are registered, SARS will give you a tax number. This is your unique number that SARS will use to track your income and identify you. Once you have your number, you will be in SARS data base and must immediately start adhering to SARS rules.

What your salary slip should tell you about paying SARS

Every month before you receive your salary, you’ll get a salary slip from your employer. This will show you how much you get paid and all the deductions from your salary. If your company offers you medical aid or pension deductions, this will also be listed on the payslip.

One of the most important deductions you should see is Pay As You Earn (PAYE). For all the money you earn every month, you pay a portion of it to SARS. SARS collects this money from your employer every month. At the end of the year, SARS calculates the amount that you’ve paid during the year and assesses if you’ve paid enough or too much, in which case you will be refunded.

Every year, your employer will give you a document called an IRP5. This is probably the most important document you’ll receive all year. Your IRP5 has all your personal details, earnings, bonuses or any extra benefits that the company gives you during that particular year. You need this IRP5 document to submit your annual tax returns. If you don’t submit your tax returns, the tax man will come knocking at your door.

When can you expect to start paying taxes to SARS?

The only time you need to pay tax is when you earn more than a certain amount of money every year. This amount is called the tax threshold.

According to SARS you are liable to pay income tax under the following circumstances:

For the 2017 year of assessment (1 March 2016 - 28 February 2017)

  • You earn R75 000 or more and if you’re younger than 65 years

How must you submit your tax return?

To register for income tax, you need to complete the IT77 registration form. You can find it on SARS website, www.sars.gov.za, or at your nearest SARS branch. You must register within 21 working days after becoming liable for tax. SARS announces its Tax Season every year. So make sure that you submit your tax return on time. The easiest way to submit your tax return is online using SARS eFiling. It’s fairly simple to use.

If you are registered for eFiling, you can also file your tax return using SARS new Smartphone App, or you can file your tax return at your local SARS branch office.

Remember: In the eyes of SARS, ignorance is not bliss. Even if you’ve never done it before, it’s your responsibility to make sure that all your tax returns are properly filed and that your taxes are fully paid.