With the first half of the year 2021 behind us, many South Africans are getting their financial affairs in order as the end of the tax season draws ever closer. For many individuals, the end of the financial year brings with it a lot of unnecessary stress and an overwhelming amount of information to process. There are numerous factors to consider when submitting personal taxes and citizens can easily become overwhelmed when attempting such a daunting task. At Booysen Accountants, we strive to simplify the tax submission process for our clients and assist individuals every step of the way.
Defining Income Tax
Tax is the money that the government collects from citizens in order to fund public services and to build and maintain infrastructure. The financial year runs from the 1st of March to the 28th of February each year, which means that taxes are calculated on earnings within this period. Every citizen in South Africa pays taxes in some form, whether it be directly or indirectly. Indirect taxes include things such as VAT and sin tax. These taxes are included in the price of certain products that are bought by the public. Direct taxes are centered around an individual’s income and are paid directly to the South African Revenue Service (SARS). Direct tax for individuals is levied on a person’s income, which includes their salary, any overtime worked, company allowances, taxable benefits, rental income and capital gains to name a few. The amount of tax that residents living and working in South Africa are required to pay is calculated on a sliding scale relative to how much a person earns annually.
Calculating Personal Income Tax
An individual’s gross income is used to calculate their taxable income; this forms the basis of the tax calculation. Any deductions such as pension fund- and Pay as you Earn contributions and any rebates are deducted from the gross income, which leaves us with the taxable income. A person’s taxable income is then applied to the annual tax table, which imposes different tax rates between 18% to 45% on an individual's income depending on what their taxable income amounts to. There are many factors to consider when calculating one’s personal income tax and the process can be quite complicated without the help of a professional accountant. Entrusting your finances to experts in the field ensures that you are taking advantage of all the possible deductions available to you, whilst ensuring compliance with all the relevant authorities.
At Booysen Accountants, we offer a wide range of financial services to assist individuals and companies. We provide professional taxation services to help you with the completion and submission of any tax returns. Amongst the various packages on offer, we are able to assist individuals with a standard tax submission for only R695.00. So don’t delay, visit https://www.booysengroup.co.za/ to avoid any unnecessary penalties and ensure your personal peace of mind this financial year.
