SOURCE CODE DESCRIPTIONS IRP5 code 4055

Deduction codes

In the electronic file IRP5 code 4055 is used for: COVID-19 Solidarity Fund Donations:Donations deducted from the employee’s remuneration and paid by the employer to the Solidarity Fund.
· A maximum donation to be allowed as a deduction by the employer when calculating the monthly PAYE is a percentage of the employee’s remuneration after deducting allowable retirement fund and retirement annuity fund contributions over specific months:
o 33.33% for 3 months (April, May, and June 2020); or
o 16.66% for 6 months (April to September 2020).
Only applicable FOR 2021 year of assessment.

The prescribed Length of IRP5 code 4055 in the electronic file is: N15

The abbreviations used within the description of the relevant codes mean:
• PAYE: Income is subject to the deduction of Employees’ Tax and will also be taxed when the income tax assessment for the employee is processed.
• IT: Income is not subject to the deduction of Employees’ Tax but will also be taxed when the income tax assessment for the employee is processed.
• Excl: Income is not subject to the deduction of Employees’ Tax and will also not be taxed when the Income Tax assessment for the employee is processed.
• Excl/PAYE: Depending on the circumstances described in the legislation, the income is either subject to both PAYE and Income Tax, or it is excluded from both PAYE and Income Tax