SOURCE CODE DESCRIPTIONS IRP5 code 4150

Employees’ tax deduction, Employment Tax Incentives and Reason codes

In the electronic file IRP5 code 4150 is used for: Reason code for IT3(a) where:
01 or 1 = Director’s remuneration prior to 2003 year of assessment (Invalid from 1 March 2002)
02 or 2 = Earn less than the tax threshold
03 or 3 = Independent contractor or Directors fees for RSA resident NED (only valid from 1 March 2017)
04 or 4 = Non-taxable earnings, including:
· nil directives and
· income protection annuities from 1 March 2015 (see notes under code 3602)
05 or 5 = Exempt foreign employment income
06 or 6 = Director’s remuneration – income quantified in the following year of assessment (only valid from 1 March 2002)
07 or 7 = Labour Broker with valid IRP 30 (only valid from 1 March 2004)
08 or 8 = No Tax to be withheld due to Medical Scheme Fees Tax Credit allowed (only valid from 1 March 2014) and/or Additional Medical Expenses Tax Credit if employee ≥65 allowed (only valid from 1 March 2016)
09 or 9 = Par 11A(5) Fourth Schedule notification – No withholding possible (only valid from 1 March 2013)

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

The prescribed Length of IRP5 code 4150 in the electronic file is: N2