SOURCE CODE DESCRIPTIONS IRP5 code 3605

Normal Income Codes

in the electronic file IRP5 code 3605 is used for: Annual payment (PAYE). An amount paid or payable to an employee which is defined as an annual payment excluding any Long Service Cash Award required to be declared under code 3622/3672. Code 3655 MUST only be used for foreign service income.
Examples include:
· Annual bonus
· Incentive bonus
· Leave pay (on resignation or encashment of leave credits)
· Merit awards
· Bonus/incentive amount paid to an employee to retain his/her service for a specific period; etc.

The prescribed Length of IRP5 code 3605 in the electronic file is: N15

All income and deduction components (e.g. salary, commission, allowances, benefits, medical contributions, employer information, etc.) must be reported against the applicable code as prescribed in the GUIDE FOR CODES APPLICABLE TO EMPLOYEES’ TAX CERTIFICATES PAYE-AE-06-G4.

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