{"id":21493,"date":"2018-09-18T14:17:10","date_gmt":"2018-09-18T14:17:10","guid":{"rendered":"https:\/\/sarsefilingguide.co.za\/?page_id=22"},"modified":"2018-09-18T14:17:10","modified_gmt":"2018-09-18T14:17:10","slug":"sars-efiling-income-from-two-sources","status":"publish","type":"page","link":"https:\/\/uni1.co.za\/articles\/sars-efiling-income-from-two-sources\/","title":{"rendered":"Sars efiling Income from two sources"},"content":{"rendered":"

INCOME FROM TWO SOURCES<\/h1>\n

\nWhat to do if you receive income from two sources?<\/h2>\n
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Taxpayers who receive income from more than one source of employment or pension are reminded that the employees\u2019 tax (PAYE) deducted by the respective employers or pension funds may not be enough to cover their final tax liability on assessment. The reason for this is the manner in which a taxpayer\u2019s tax liability is calculated on assessment.<\/div>\n
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The South African tax system is based on the principle of adding together all sources of income of a taxpayer into a single sum, and applying a progressive tax rate table to determine the final tax liability of the taxpayer on assessment. A progressive tax rate system means that the more income is earned, the higher is the marginal tax rate and more tax is paid on assessment.<\/div>\n
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By deducting PAYE every month, the employer or pension fund is assisting a taxpayer to pay his or her tax liability, determined on assessment, in advance. When only one employer or pension fund is involved, the total PAYE deducted monthly should be equal to the tax liability on assessment. Typically this should result in no extra tax due on assessment. However, where more than one employer or pension fund is involved, each of them deducts the correct amount of PAYE on only the salary or pension they each pay.\u00a0 When all the sources of income are added together and the correct tax rate is applied this may result in an additional amount of tax to be paid on assessment.<\/div>\n

An example<\/h2>\n
The table below gives an example of how the combined taxable income is calculated in the case of a taxpayer who is over the age of 65 years and receives a salary of R280 000 and a pension of R220 000 during the tax year.<\/div>\n<\/div>\n
<\/div>\n
\n\n\n\n\n\n\n\n
\u200b<\/td>\n\u200bSalary<\/strong><\/td>\n\u200bPension<\/strong><\/td>\n\u200bAssessment<\/strong><\/td>\n<\/tr>\n
Taxable income\u200b<\/td>\n\u200b280 000<\/td>\n\u200b220 000<\/td>\n\u200b500 000<\/td>\n<\/tr>\n
\u200bNormal tax payable<\/td>\n35 352<\/td>\n\u200b19 752<\/td>\n\u200b106 095<\/td>\n<\/tr>\n
\u200bLess: Tax paid in the form of PAYE withheld by employer and pension fund<\/td>\n\u200b35 352<\/td>\n\u200b19 752<\/td>\n\u200b55 104<\/td>\n<\/tr>\n
\u200bAdditional amount of tax to be paid on assessment<\/td>\n\u200b<\/td>\n\u200b<\/td>\n\u200b50 991<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n
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As you can see, after submission of the annual income tax return by this individual, the total tax liability on assessment is significantly higher than the total PAYE that was correctly deducted by the employer and pension fund during the year. This results in a large amount that has to be paid in on assessment because too little tax was deducted monthly by way of PAYE.
\nTo assist taxpayers who are in this situation, the Income Tax Act allows a taxpayer to make additional voluntary tax payments. Taxpayers receiving a salary or pension may make a written request to one or more employers and pension funds to deduct additional monthly PAYE. A provisional taxpayer may instead pay a higher amount of provisional tax.
\nIn this way a taxpayer is able to reduce the additional amount of tax payable when the annual income tax return is assessed.<\/div>\n

How to arrange for a voluntary additional PAYE deduction<\/h2>\n
<\/div>\n
A taxpayer has two options to voluntarily pay more PAYE:<\/div>\n