Chapter 11. Archive: ‘Fixed Rate’ Tax Calculations
This chapter has been updated with recent events and opinions, including changes to the 1 March 2022 process of implementing Fourth Schedule paragraph 2(2B) that allows SARS to provide a ‘SARS Effective Tax Rate’ instruction to employers that must be used to calculate PAYE for pensioners with more than one stream of remuneration.
Calculating the various employment-related taxes is not an easy matter for payroll systems, made more difficult by the fact that the remuneration used in these calculations is defined differently for the purposes of PAYE, SDL, UIF, ETI, Employment Equity, and the BCEA.
11.1 ‘Fixed rate’ Tax Calculation Principles
Note that the terminology that I have used to identify the three fixed-rate methods of PAYE calculation referred to in this workbook is my attempt to create a standard naming principle that is consistent, clear, and short.
It appears that using a short reference to the underlying Fourth Schedule legislation (for example ‘Par 2(2B) Effective Tax rate’) hopefully achieves this objective. Of course, it helps if you are familiar with the legislation!
Methods of PAYE Calculation
Up until 28 February 2022, there were three different methods of PAYE calculation:
1. Standard employment (the annual statutory tax table rate per employee)
2. Non-standard employment (the 25% fixed tax rate per employee)
3. SARS Fixed tax rate (a SARS-calculated fixed tax rate per employee).
From 1 March 2022, a fourth method of PAYE calculation came into effect:
4. ‘Par 2(2B) Effective Tax rate’ (a SARS-calculated rate per annuity in terms of paragraph 2(2B)).
Of the four methods, one uses the statutory tax table, and the other three use various types of fixed tax rates.
Fourth Schedule Paragraph 2(2B)
Fourth Schedule paragraph 2(2B) was introduced from 1 March 2022 to allow SARS to calculate, for pensioners who are in receipt of annuities and other remuneration streams from an employer, a ‘Par 2(2B) Effective Tax rate’ that takes the other remuneration streams into account to prevent additional income tax from being raised on assessment on the unsuspecting pensioner’s combined income as a result of our progressive tax system.
UPDATE:
It appears from information received late in February that the SARS Fixed tax rate issued to pensioners during 2022/23 comes to an end on 28 February 2023. From 1 March 2023, the PAYE calculations must revert to the statutory tax tables until when (or ‘if’) a new SARS fixed rate is issued, unless the pensioner has provided the retirement fund administrator with a valid ‘opt out’ request in either the 2023 or the 2024 tax year.
Directive Request
Of the three fixed-rate options above, only option 3 (the fixed rate, or ‘hardship’ directive) must be applied for.
Employers must not apply to SARS for:
1. The Fixed 25% Tax rate (employers must simply apply it for all employees in non-standard employment)
2. The Par 2(2B) Effective Tax rate (SARS calculates and issues these rates as an instruction to employers).
SARS Employment Taxes Validation (ETV)
After the employers filing season (April and May), SARS use the demographic and financial data reported on tax certificates to recalculate and check the PAYE and SDL reported on the final year-end tax certificates by payrolls.
If the PAYE (or SDL) calculated by payrolls differs by more than an allowable margin of error from that calculated by SARS during the Employment Tax Validation (ETV) process, the PAYE (or SDL) differences are reported to employers for correction using the same channel as that used to submit the tax certificates.
PAYE Calculation Principles
It is important for all parties that the total of the PAYE calculated by the payroll during the tax year is the same as (or very close to) the PAYE calculated by SARS from the tax certificate data at the end of the tax year. If the methods of calculation of PAYE used by payroll systems differ from those used by SARS, then there will be PAYE differences. The PAGSA and SARS are in discussion regarding the different methods of PAYE calculation.
11.2 PAYE vs Income Tax Calculation
The structure of the PAYE and Income Tax calculations are summarised, and the basic concepts are compared in the following ‘Tax 101’ Comparison table that lacks a lot of detail, but hopefully gets the principles across.
Comparison Table: Taxpayers vs Employees, Income vs Remuneration, and Income tax vs PAYE
INCOME AND INCOME TAX REMUNERATION AND PAYE
Taxpayers Employees
• Receive or accrue Income
• On which Income tax is calculated
• At the end of the tax year
• Giving a final income tax amount • Receive or accrue Remuneration
• On which PAYE is calculated
• During the tax year
• Giving an estimated income tax amount
Gross Income (Section 1 definition)
• Plus: Section 1 special inclusions
• Less: Section 10(1) Exemptions
Income Remuneration (Fourth Schedule definition)
• Less: Sections 11 and 23 deductions
• Plus: Unexpended section 8 allowances • Less: Paragraph 2(4) deductions
• Plus: Defined inclusions
Taxable Income Balance of Remuneration
• Calculate ‘Gross’ Income Tax • Calculate ‘Gross’ PAYE
‘Gross’ Income Tax ‘Gross’ PAYE
• Less: Section 6 ‘age’ rebates
• Less: Section 6A Medical Tax Credit (MTC)
• Less: Section 6B Additional MTC (AMTC) • Less: Section 6 ‘age’ rebates
• Less: Section 6A Medical Tax Credit (MTC)
• Less: Section 6B Additional MTC (AMTC)
INCOME TAX PAYE
The above ‘Tax 101’ table has been further simplified for the purposes of this workbook to focus on the main steps of the two tax calculations that are relevant for the PAYE Fixed-rate discussion that follows.
Simplified Comparison Table: Income vs Remuneration, and Income tax vs PAYE
INCOME AND INCOME TAX (Taxpayers) REMUNERATION AND PAYE (Employees)
GROSS INCOME (Section 1 definition)
• Less: Exemptions (Section 10)
Equals: INCOME REMUNERATION (Fourth Schedule definition)
• Less: Deductions • Less: Deductions
Equals: TAXABLE INCOME (‘Gross’) Equals: BALANCE OF REMUNERATION
Calculate: INCOME TAX (before rebates) Calculate: PAYE (before rebates)
• Less: Section 6 ‘age’ rebates
• Less: Section 6A Medical Tax Credit (MTC)
• Less: Section 6B Additional MTC (AMTC) • Less: Section 6 ‘age’ rebates
• Less: Section 6A Medical Tax Credit (MTC)
• Less: Section 6B Additional MTC (AMTC)
Calculate: INCOME TAX (final – after rebates) Calculate: PAYE (final – after rebates)
Note that the fundamental purpose of:
• REMUNERATION is that it is an estimate of the final employment INCOME, and
• PAYE is that it is an advance payment towards the final INCOME TAX liability.
The above tables show that REMUNERATION (by definition) is on the same ‘level’, or directly linked, to INCOME.
From that point onwards, both the PAYE and the income tax calculations follow the same basic steps – their calculation methods are therefore aligned in principle and the tax results should be the same or very similar.
11.3 PAYE Fixed-Rate Calculation Methods
There are three calculations that must be aligned and work hand-in-hand with one another to achieve the objective of calculating employee’s tax in a transparent, accurate, and fair manner for all parties:
1. The payroll’s PAYE calculation
2. The SARS calculation of the value of the three ‘Fixed rates’, namely:
a. Par 10 25% tax rate [Paragraph 10: Non-standard Employment]
b. Par 11 Fixed-rate Directive [Paragraph 11: Hardship Directive]
c. Par 2(2B) Effective rate [Paragraph 2(2B): Multiple income streams]
3. The SARS income tax calculation on assessment.
As stated earlier, the total monthly PAYE withholding for the year, besides being accurate and fair to all parties, must have the same value (or very close to), the final tax year end PAYE calculated by SARS. If these objectives are achieved, it will significantly minimise administration time, costs, and queries, for all parties.
It is important to note that the three SARS ‘Fixed rate’ calculations in points 2a, 2b, and 2c above are the proverbial ‘Ham in the Sandwich’ that sits between the payroll’s PAYE calculation and the SARS income tax calculation.
This means that when applying the three SARS fixed tax rates, payrolls should calculate PAYE in harmony with the way in which the fixed tax rates were calculated by SARS. In a perfect world, component amounts that were used by SARS when determining the value of the fixed tax rate, must not be used again by payrolls, and vice versa.
But as we will see, it is not a perfect world (not yet anyway).
There are four main components of the various methods of PAYE tax calculations that SARS and payrolls should apply in harmony with one another:
1. The Remuneration base: ‘Gross’ Remuneration or the ‘Balance of Remuneration’
2. Section 6: ‘Age’ rebates
3. Section 6A: Medical Tax Credits (MTC)
4. Section 6B: Additional Medical Tax Credits (AMTC).
These four components are included as columns in the following ‘Comparison Table’ that specifies whether or not the component must be applied by payrolls across the four methods of PAYE calculation.
Comparison Table: PAYE Calculation Methods
PAYROLL PAYE CALCULATION REMUNERATION TO BE APPLIED IN THE
PAYROLL’S CALCULATION CALCULATION IS BASED ON?
METHOD OF CALCULATION Base for PAYE Calculation S6 Age Rebates S6A
MTC S6B
AMTC
1 Statutory Table
(Standard Employment) ‘Balance of Remuneration’ Yes Yes Yes Employee
2 Par 10 25% tax rate
(Non-standard Employment) ‘Balance of Remuneration’ No (?) Yes Yes Employee
3 Par 11 Fixed rate Directives
(Hardship Directive) ‘Gross’ Remuneration No No (?) No (?) Employee
4 Par 2(2B) Effective rate
(Multiple remuneration) ‘Gross’ Remuneration (?) No No Yes (?) Annuity
A B C D
What the table clearly shows, is the differences in application of the four components by the payroll across the four PAYE calculation methods. What the table does not show, is whether or not these components were included in the SARS calculation of each of the fixed tax rates.
The ‘Yes’ and ‘No’ in the table are the current calculation rules that the payroll calculation must obey, and the ‘(?)’ next to some of them, indicate that there are some questions regarding the current rules.
Comments on the ‘Comparison Table: PAYE Calculation Methods’
The row numbers (1 to 4) in the left-hand column of the table, coupled to the column indicator (A to D) in the bottom row of the table, are used in the same manner as spreadsheet ‘cells’ in the comments that follow to refer to a particular area of the calculations.
1. Line 1: (Standard Employment calculation)
The standard employment calculation that uses the statutory tax table has been included in line 1 of the table to provide a benchmark against which the three fixed-rate PAYE calculations can be compared.
Note that the payroll’s PAYE calculation is fully aligned with the SARS Income Tax calculation.
2. Cell 2B: The age rebates for the non-standard employment Par 10 25% tax rate
2 Par 10 25% tax rate
(Non-standard Employment) ‘Balance of Remuneration’ No (?) Yes Yes
The SARS ruling is that payrolls must not reduce PAYE by the age rebate amount, which implies that the age rebates were applied when the 25% tax rate was determined by SARS many years ago. This cannot be confirmed – the reasoning and the mathematics behind the determination of the 25% rate is buried in the mists of time.
However, common sense says that it was impossible for SARS to have applied the age rebates when the 25% rate was determined because this rate must be applied to employees of all age groups that are in non-standard employment, and not to a single employee where the age rebate could be correctly applied.
One can only assume that the legislators at the time of its introduction adopted a conservative approach to avoid an under-withholding of PAYE that could not be recovered on assessment, particularly during the years when SITE was in force.
‘Best practice’ is that all 65 or older employees in non-standard employment from whom PAYE has been withheld at the 25% rate should voluntarily submit an ITR12 annual return to access a possible refund.
The following is not an interpretation, but simply an explanation of a complex area of the Fourth Schedule that throws some light on this issue as well as on the other scenarios.
The 25% withholding rate has been in existence as a standard practice carried out by SARS under paragraph 9(1), read with paragraph 13.4 of The Guide for Employers iro Employees’ Tax. It merely serves to operate as another ‘tax table’.
It is paragraph 2(1) which contains the withholding obligation, and it is clear under paragraph 2(1) that the employees’ tax must be determined under paragraphs 9, 10 or 11 or section 95 of the TA Act. As a result of the inclusion of the word “or” in paragraph 2(1), only one of these provisions [Rob: paragraph 9] can apply.
In addition, when prescribing the rates under paragraph 9(1), paragraph 9(6) provides that there must be deducted from the amount to be withheld or deducted by way of employees’ tax as contemplated under paragraph 2, the medical tax credit and qualifying additional medical expenses tax credits.
Paragraph 9(1)(a) also prescribes that the rate of 25% as determined by the Commissioner [par 10] must take “into account the [age] rebates applicable in terms of section 6”.
When applying the fixed rate under paragraph 9(1), after accounting for the rebates outlined in paragraph 9(1)(a) and 9(6), the fixed rate of 25% must be applied to the balance of remuneration outlined in paragraph 2(4), read with paragraph 2(1).
This action is also aligned with paragraph 13.4 of the Guide for Employers where it is indicated that the fixed rate must be applied to the balance of remuneration.
3. Cells 3C and 3D: The MTC and AMTC calculations for ‘Par 11 Fixed-rate Directives’:
3 Par 11 Fixed rate Directives
(Hardship Directive) ‘Gross’ Remuneration No No (?) No (?)
Payrolls are not allowed to reduce the PAYE calculated in terms of a Par 11 Fixed-rate Directive by the MTC or AMTC rebates. The question (to which there is no answer at the moment) is whether SARS take the MTC and AMTC into account when calculating the IRP3e fixed tax rate.
If they do, then one wonders how accurate the information can be that SARS bases its calculations on.
If the MTC and the AMTC are not applied by the SARS calculation of the IRP3e fixed rate, and payrolls are not allowed to apply them, then these rebates can only be applied during the SARS income tax calculation, implying that the employee must submit an ITR12 annual return, otherwise these tax credits will be lost.
The PAGSA has suggested that a fairer and more accurate result would be achieved if the payroll applies the MTC and AMTC rebates, and the calculation rules should be changed accordingly.
The drawback to this suggestion could be if the employee has multiple employment, then these rebates might be applied by each employer. However, it is almost a certainty that only one of the employers will take the MTC into account because only one employer will contribute to a medical scheme, and the same logic applies in principle to AMTC.
Note for payroll suppliers
It appears that this decision has been reversed by SARS from a ‘Yes’ (as applied by payrolls since 2012) to a ‘No’ during the recent discussions. If so, this means a change to the payroll system.
4. Cells 4C and 4D: The MTC and AMTC calculations for the ‘Par 2(2B) Effective Tax rate’:
4 Par 2(2B) Effective rate
(Multiple remuneration) ‘Gross’ Remuneration (?) No No Yes (?)
Firstly, if there is no medical scheme contribution, there is no MTC and no AMTC to be applied in the payroll’s PAYE calculation, and the instructions in the table for the payroll’s calculation are moot.
Secondly, it is important to remember that PAYE calculations in terms of paragraph 10 (the Par 10 25% tax rate) and paragraph 11 (the Par 11 Fixed tax rate) are based on an employee, whereas the PAYE calculation in terms of paragraph 2(2B) is based on the annuity.
This is a major difference. There is only one employee, but one employee can have more than one annuity, each of which is either paid by the same fund or by more than one fund.
It follows that the rebates that are linked to the employee, cannot be applied per annuity, otherwise this would be double-dipping – the rebates would be applied more than once for the same employee.
It therefore makes sense to not allow the MTC because otherwise it might be applied per annuity, but why then did the Commissioner allow the AMTC in the latest SARS letter in the next section?
Again, the following is not an interpretation, but simply an explanation of a complex area of the Fourth Schedule that throws some light on this issue.
Paragraph 2(2B) operates differently because the law in paragraph 2(2B) must be read “Notwithstanding the provisions of subparagraph (1)”. This means that ‘something’ in paragraph 2(1) must be ignored or replaced by that outlined in paragraph 2(2B).
Paragraph 2(1) contains the withholding obligation, but paragraph 2(2B) would not remove the withholding obligation, since this would be nonsensical under the law and would make paragraph 2(2B) superfluous. Instead, it removes the requirements to apply the provisions of paragraphs 9, 10 or 11 or section 95 of the TA Act.
The withholding obligation therefore remains, but paragraph 2(2B) requires that the Commissioner prescribe a rate in terms of paragraph 2(2B) itself, making no reference to paragraphs 9, 10 or 11 or section 95 of the TA Act.
The Commissioner has prescribed that only the additional medical expenses tax credit can be taken into account after applying the fixed rate to the balance of remuneration.
It would be nonsensical to deduct the same MTC from every annuity to which paragraph 2(2B) applies – in the same way it would be nonsensical to allow a section 6 rebate against each annuity (thus preventing duplication). To do otherwise would not achieve what paragraph 2(2B) wishes to achieve.
11.4 SARS Notices – Paragraph 2(2B)
Starting in February 2022, SARS have issued several notices explaining the purpose and principles of paragraph 2(2B) as well as outlining the application of the ‘Par 2(2b) Effective Rate’ (or the ‘SARS Fixed Rate’ as SARS sometimes refers to it in their notices) when calculating PAYE for pensioners.
The purpose of these notices is to clarify how Retirement Fund administrators and Insurers that pay annuity income to pensioners and their payroll systems must apply the SARS Par 2(2B) Effective Tax rates to calculate PAYE for those pensioners that according to the SARS records, have more than one stream of remuneration.
It is logical to assume that at the time of issuing the earlier notices that the latest information available to SARS at that stage would have been sourced from the pensioner’s 2022 Interim (August 2021) certificates.
The second round of SARS par2(2B) effective rates that were issued recently might (I am not sure of this) have included data from the 2022 tax year-end certificate submissions that would result in more up to date and accurate calculations.
Dated 29 July 2022, a notice was sent directly to only those retirement fund administrators that received a file containing revised SARS Effective Fixed rates. This notice was not issued to employers in general and can unfortunately not be included in this Newsflash.
However, point 9.3 of this notice is pertinent to the discussion that follows, and is included for your information:

In my opinion, point 9.3 is in line with normal PAYE annualisation forecasting that recalculates PAYE from month-to-month to ensure accurate PAYE withholding, and it should not be difficult for payroll suppliers to comply with.
At the same time as the above notice, SARS issued another notice to all employers titled:
“Updated Par 2(2B) Fixed Rate Directive Rules and Incorrect File Information”.
Extracts from this notice are discussed in the next section.
[Payroll and Associate members of the PAGSA can refer to PAGSA Newsflash 2022-34 that includes the full SARS notice in the Annexure of the Newsflash]
11.5 Comments on Extracts from the SARS Notice
The SARS notice states as follows:
“However, where the revised fixed rate directive file prescribes a higher fixed PAYE rate than previously, the administrator must apply the higher fixed rate only from a current month and not backdated from 1 March/April 2022.” [my emphasis added]
Applying a new higher tax rate from a current month and not backdated from 1 March/April 2022 means that normal annualising (forecasting) methods that would include the include the first month of the tax year cannot be applied and two tax records must be created, one for the first period of the tax year at the lower tax rate, and the second for the period of the increased tax rate.
In the interests of calculating PAYE as accurately as possible over the year using the SARS fixed rates, the PAGSA requested SARS to interpret the word “must” in their own notice to be “may”.
This would allow employers and payrolls, at their option, to apply annualisation calculations when calculating PAYE with the revised SARS fixed rate.
At the time of writing this workbook, these discussions are ongoing, but it appears that a legal interpretation of the application of paragraph 2(2B) will not allow the full year to be annualised using the SARS latest fixed rate.
The other uncertainty is whether separate tax certificates must be created for every change in the rate or the method of PAYE calculation (see code 3220 in the Tax Certificate chapter).
The SARS notice goes on to state that:
“As advised in the latest directive letter, where the revised fixed rate directive file prescribes a lower fixed PAYE rate than previously, the administrator may reduce PAYE to be withheld for subsequent periods with amounts over-deducted in previous pay periods during the same year of assessment.
The over-deduction in previous pay periods may be used to reduce the PAYE to be deducted in any of the subsequent pay periods.”
This paragraph correctly allows payrolls to annualise using the lower fixed rate over the full tax year.
[Payroll and Associate members of the PAGSA can refer to PAGSA Newsflash 2022-39]
11.6 Tax Certificate Requirements for Fixed Rate Calculations
The SARS Business Requirements Specification (PAYE BRS) version 21.2 for the February 2023 tax year end, has recently changed the reporting rule for tax certificate code 3220 (Fixed Rate Taxation Indicator).
Code 3220 must be set to ‘Y’ if the PAYE was calculated using one of the following fixed rates:
1. Non-standard employment (25%), or
2. Paragraph 2(2B) of the Fourth Schedule.
Note that code 3220 used to, but no longer provides an option for SARS Fixed-rate Directives.
If a fixed rate directive is reported on the tax certificate, this is indicated in code 3230 (Directive number) that must be completed if one of the income codes that require a directive are reported on the tax certificate. These income codes are listed in code 3230’s validation rules in the BRS and also in the Tax Certificate chapter in this workbook.
Importantly, the rule goes on to state that if the employee’s PAYE tax calculation method is changed from one of the two fixed rate methods of calculation provided for by code 3220 to the statutory tables, or vice versa, a separate tax certificate must be submitted for each period of different tax calculation.
It makes no sense for SARS to check the tax during a certain period in the tax year by using a different method of PAYE calculation from that used by the payroll. This rule was put in place to align the ETV (Employment Tax Validation) calculation of PAYE with the payroll’s calculation of PAYE per tax certificate. ETV is not applied if there is a directive reported on the tax certificate.
Very recent discussions resulted in agreement that the rule specifying a ‘single tax certificate per tax calculation method’ will be removed, and this has just been published in SARS PAYE BRS version 22.0.
11.7 PAYE Calculations: Relevant Legislation
If you wish to check the legislation yourself, here are the main references:
1. Standard employment: Annual statutory table Fourth Schedule paragraph 9
2. Non-standard employment: 25% tax rate Fourth Schedule paragraph 10
3. SARS Fixed rate Directive Fourth Schedule paragraph 11
4. ‘SARS Par 2(2B) Effective Tax rate’ Fourth Schedule paragraph 2(2B).
The legislation that underpins the four methods of PAYE calculation is lengthy and in places has been shortened to make it more readable without changing the thrust of the requirement.
Paragraph 2(1)
This is an important paragraph.
It provides the imperative for employers to withhold PAYE and is referred to in the new paragraph 2(2B) and in paragraph 9 that allows the Commissioner to prescribe the rates of normal tax (the annual statutory tax table) and the manner in which the tables must be applied.
It applies to SA resident employers as well as representative employers in SA, and abbreviated, states that:

“Every employer … who pays … any amount by way of remuneration to any employee shall … deduct or withhold from that amount … by way of employees’ tax an amount which shall be determined as provided in paragraph 9, 10 or 11 or section 95 of the Tax Administration Act, whichever is applicable, in respect of the liability for normal tax of that employee, … and shall … pay the amount so deducted or withheld to the Commissioner within seven days after the end of the month during which the amount was deducted or withheld …”

Paragraph 2(4)

(4) The amount required to be deducted or withheld from any remuneration under this Schedule by way of employees’ tax must be calculated on the balance of the remuneration remaining after deducting therefrom—
(a) any contribution by the employee concerned to any pension fund or provident fund which the employer is entitled or required to deduct from that remuneration, but limited to the deduction to which the employee is entitled under section 11F having regard to the remuneration and the period in respect of which it is payable;
(b) at the option of the employer, any contribution to a retirement annuity fund by the employee in respect of which proof of payment has been furnished to the employer, but limited to the deduction to which the employee is entitled under section 11F having regard to the remuneration and the period in respect of which it is payable;
(bA) any contribution made or amount paid by the employer to any retirement annuity fund on behalf of or for the benefit of the employee, but limited to the deduction to which the employee is entitled under section 11F having regard to the remuneration and the period in respect of which it is payable;
(f) so much of any donation made by the employer on behalf of the employee—
(i) as does not exceed 5 per cent of that remuneration after deducting therefrom the amounts contemplated in items (a), (b) and (bA); and
(ii) for which the employer will be issued a receipt as contemplated in section 18A (2) (a):

Fourth Schedule paragraph 2(2B) [the ‘SARS Par 2(2B) Effective’ tax rate]
“ Notwithstanding [Rob: i.e. in spite of, or ignoring] the provisions of subparagraph 2(1), a person that pays an annuity and is a pension fund, pension preservation fund, provident fund, provident preservation fund, retirement annuity fund or is licensed as an insurer under the Insurance Act shall, when deducting or withholding employees’ tax in respect of any year of assessment, apply the fixed tax rate that the Commissioner directs must be used in determining the amount of employees’ tax to be withheld, where the person to whom that annuity is paid receives an amount of remuneration from more than one employer.

Fourth Schedule paragraph 9
Paragraph 9 allows the Commissioner to prescribe the rates of normal tax (the annual statutory tax table) and the manner in which the tables must be applied, taking into account the applicable ‘age’ rebates in terms of section 6, subject to subparagraphs 3 and 4, and also subject to paragraph 10 (the 25% non-standard employment rate) and paragraph 11 (the IRP3e Fixed rate Directive).
9.
(1) The Commissioner may from time to time, having regard to the rates of normal tax as fixed by Parliament or foreshadowed by the Minister in his budget statement and to any other factors having a bearing upon the probable liability of taxpayers for normal tax, prescribe—
P9(1)(a)
(a) deduction tables applicable to such classes of employees as the Commissioner may determine, taking into account the rebates applicable in terms of section 6; and
(b) the manner in which such tables shall be applied,
and the amount of employees’ tax to be deducted from any amount of remuneration shall, subject to the provisions of subparagraphs (3) and (4) of this paragraph and paragraphs 10 and 11 and section 95 of the Tax Administration Act, be determined in accordance with such tables or where subparagraph (3) or (4) is applicable, in accordance with that subparagraph.
(3) (a) The amount to be deducted or withheld in respect of employees’ tax from any lump sum to which paragraph (d) or (e) of the definition of “gross income” in section 1 or section 7A applies, shall be ascertained by the employer from the Commissioner before paying out such lump sum, and the Commissioner’s determination of the amount to be so deducted or withheld shall be final.
(4) The amount to be deducted or withheld in respect of any amount contemplated in paragraph (eA) of the definition of “gross income” in section 1 of this Act, shall be ascertained by the employer on inquiry from the Commissioner before the date of transfer or conversion of any amount for the benefit or ultimate benefit of any member as contemplated in such paragraph and the Commissioner’s determination of the amount to be so deducted or withheld shall be final.
(6) There must be deducted from the amount to be withheld or deducted by way of employees’ tax as contemplated in paragraph 2 the amount—
(a) of the medical scheme fees tax credit that applies in respect of that employee in terms of section 6A; and
(b) where the employee is entitled to a rebate under section 6 (2) (b), of the additional medical expenses tax credit that applies in respect of that employee in terms of section 6B (3) (a) (i),
if—
(i) the employer effects payment of the medical scheme fees as contemplated in section 6A (2) (a); or
(ii) the employer does not effect payment of the medical scheme fees as contemplated in section 6A (2) (a), at the option of the employer, if proof of payment of those fees has been furnished to the employer.

Fourth Schedule paragraph 10 [the non-standard employment 25% tax rate]
10. (1)
If the Commissioner is satisfied that the circumstances warrant a variation of the basis provided in paragraph 9 for the determination of amounts of employees’ tax to be deducted or withheld from remuneration of employees in the case of any employer, the Commissioner may agree with such employer as to the basis of determination of the said amounts to be applied by that employer, and the amounts to be deducted or withheld by that employer in terms of paragraph 2 shall, subject to the provisions of paragraph 11 and section 95 of the Tax Administration Act, be determined accordingly.

Fourth Schedule paragraph 11 [Provides for the IRP3e Fixed tax rate Directive]
11. The Commissioner may, having regard to the circumstances of the case, issue a directive—
(a) to an employer authorising that employer—
(i) to refrain from deducting or withholding any amount under paragraph 2 by way of employees’ tax from any remuneration due to any employee of that employer; or
(ii) to deduct or withhold by way of employees’ tax from any remuneration in terms of paragraph 2, a specified amount or an amount to be determined in accordance with a specified rate or scale,

in order to alleviate hardship to that employee due to circumstances outside the control of the employee or to correct any error in regard to the calculation of employees’ tax, or in the case of remuneration constituting commission or where the remuneration is paid or payable to a personal service provider and that directive must be complied with; or

Tax Administration Act Section 95
Estimation of assessments.—
(1) SARS may make an original, additional, reduced or jeopardy assessment based in whole or in part on an estimate, if the taxpayer—
(a) does not submit a return;
(b) submits a return or relevant material that is incorrect or inadequate; or
(c) does not submit a response to a request for relevant material under section 46, in relation to the taxpayer, after delivery of more than one request for such material.
(2) SARS must make the estimate based on information readily available to it.
[continues].
In Closing
It would not surprise me if some of the above fixed tax rate calculation rules are revisited and changed at some stage in the future.