Budget 2023: Highlights and Useful Links for Payrolls
The Minister of Finance presented the 2023 Budget Review in Parliament on 22 February 2023. The following documents and information are now available on the SARS website:
2024 Tax tables: https://www.sars.gov.za/tax-rates/employers/tax-deduction-tables/
Medical fees tax credit: https://www.sars.gov.za/tax-rates/medical-tax-credit-rates/
Budget Tax Guide: https://www.sars.gov.za/wp-content/uploads/Docs/Budget/2023/Budget-2023-Tax-Guide.pdf
Budget documents: https://www.sars.gov.za/about/sas-tax-and-customs-system/budget/
Statutory Rates of Tax: 2024 Year of Assessment (1 March 2023 — 28 February 2024)
The following tax rates, tax rebates and tax thresholds proposed by the Minister of Finance in his Budget speech come into effect on 1 March 2023. Statutory rates applicable to individuals
Taxable Income (R)
Rates of Tax (R)
0
—
237 100
18% of each R1
237 101
—
370 500
42 678
+
26%
of the amount above
237 100
370 501
—
512 800
77 362
+
31%
of the amount above
370 500
512 801
—
673 000
121 475
+
36%
of the amount above
512 800
673 001
—
857 900
179 147
+
39%
of the amount above
673 000
857 901
—
1 817 000
251 258
+
41%
of the amount above
857 900
1 817 001
and above
644 489
+
45%
of the amount above
1 817 000
Tax rebates applicable to individuals
Primary rebate R17 235
Secondary rebate (for persons 65 years and older) R9 444
Tertiary rebate (for person 75 years and older) R3 145
Tax thresholds applicable to individuals
Persons under 65 years R 95 750
Persons 65 to 74 years old R148 217
Persons 75 years and older R165 689
Medical Scheme Contribution Tax Credit
The medical scheme tax credits that will be effective from 1 March 2013 are:
R364 in respect of the taxpayer
R364 for the first dependent
R246 for each additional dependent
Rate per Kilometer
The “Cost scale Table” for 2023/24 can be access via the following link:
https://www.sars.gov.za/wp-content/uploads/Legal/SecLegis/Legal-LSec-IT-GN-2023-003-Budget-2023-Vehicle-cost-tables-3-March-2023.pdf
The prescribed rate per kilometer has been increased from R4,18 per km to R4,64 per km. This rate is applicable at the option of the recipient where no other form of compensation is received for business travel purposes. Subsistence Allowances and Advances
The daily amounts for overnight allowance in respect of travelling for business purposes (including at least one night away from home) in the Republic are:
R522 per day for meals and incidental costs
R161 for each day for incidental costs only
https://www.sars.gov.za/wp-content/uploads/Legal/SecLegis/Legal-LSec-IT-GN-2023-002-Budget-2023-Subsistence-Allowances-Rates-Day-Overnight-Allowance-3-March-2023.pdf
The daily amount for daily business trip reimbursements (not away from home for a night) is:
R161. https://www.sars.gov.za/wp-content/uploads/Legal/SecLegis/Legal-LSec-IT-GN-2023-001-Budget-2023-Subsistence-Allowances-Rates-Day-Allowance-3-March-2023.pdf
The Gazette Notice 268 GG 42258 which became effective on 1 March 2019 remains in force for daily expense amounts in respect of travelling outside the borders of the Republic:
Income Tax Notices 2023
The Budget 2023 proposals to change the employment related tax legislation will be issued in a PAGSA Newsflash shortly. Regards,
Rhona van Taak
Admin Manager Payroll Authors Group of South Africa
All information provided by the PAGSA is subject to our DISCLAIMER

KZN Floods – Tax Relief Measures
As we all know, a National State of Disaster has recently been announced to facilitate the process of repairing the severe damage to infrastructure, and to assist the many thousands of individuals who are experiencing horrendous personal hardship. Extending the state of disaster to the whole country is apparently necessary because the negative impact of the floods, while experienced mostly within KZN, ripples through to the rest of the country. As I am sure we all remember very clearly, the 2020 Covid-19 lockdowns, and the July 2021 Civil unrest, resulted in various forms of tax relief legislation being put in place in a very short space of time to provide financial assistance for both employers and employees. Because this is now a declared national state of disaster, the PAGSA has been asked whether there is a likelihood of another set of tax relief measures being rolled out to assist those that have experienced hardship because of the floods. At this stage, we can report that there is no indication of any changes to the legislation to provide tax relief. Whether or not simpler administrative changes will be introduced to facilitate donations, or any other form of assistance, remains to be seen. If there are any changes to the status of the roll-out of special tax relief provisions, the PAGSA will update you as soon as possible, but to repeat, at this stage this seems to be unlikely. Regards,
Rob Cooper
Chairman Payroll Authors Group of South Africa
All information provided by the PAGSA is subject to our DISCLAIMER.

SARS Income Tax Return notice – Filing Season
SARS has issued the notice to be published in the Government Gazette relating to the “Returns to be submitted by persons in terms of Section 25 of the Tax Administration Act, 2011”. Although this notice has not yet been published in the Gazette, it is expected to be published on 3 June 2022. Summary
Individuals who received remuneration from one source and do not have any other allowances or benefits, only need to submit an income tax return of their total remuneration does not exceed R500 000 and PAYE has been deducted according to the prescribed tax deduction tables. Income tax returns to be submitted before or on 24 October 2022, if it is not a provisional taxpayer. Income tax returns to be submitted before or on 23 January 2023 if it is a provisional taxpayer using eFiling platform. Although only a few points in the notice is mentioned above, the notice is hereto attached for your convenience. Regards,
Rhona van Taak
Admin manager: Payroll Authors Group of South Africa
All information provided by the PAGSA is subject to our DISCLAIMER

Employment Tax Incentive Act Amendments – Curbing ETI Abuse
Before discussing the details of the amendments to the ETI Act (Employment Tax Incentive Act) to curb ETI abuse that are effective from 1 March 2022, I would like to thank National Treasury for their help from a policy perspective, and to thank SARS for putting up with my many emails, for their support during the past weeks, and for their clarification of the new ETI requirements. Included in the appendix to this Newsflash is the result of our discussions with SARS in the form of an NBPO (Non-Binding Private Opinion) that was issued by SARS dated 7 March 2022. The issuing of the NBPO was followed by an investigation by the PAGSA Exco into the practical application of the NBPO, resulting in an example of the calculation of ETI ‘monthly remuneration’ that is included, after approval by SARS, in a later section of this newsflash as guidance for the payroll supplier members of the PAGSA. The correct calculation of ETI ‘monthly remuneration’ is of huge importance to all parties. If ‘monthly remuneration’ is incorrectly calculated, the ETI amount will be calculated incorrectly, resulting in an incorrect reduction of the employer’s PAYE liability on the EMP201. Apologies to our payroll supplier members that it has taken some time to reach the point where we are now with this Newsflash. It has been a difficult time for payroll suppliers – how can you change a payroll system when you don’t know what the changes are? The challenges that payroll suppliers face with the timeous implementation of the new ETI requirements has been formally communicated to SARS by the PAGSA. The final changes to the ETI Act were made in October/November 2021 by the Standing Committee on Finance and were published in the TLAA (Taxation Laws Amendment Act) that was issued on 19 January 2022, accompanied by a final Explanatory Memorandum that was issued a week later on 25 January 2022. The limited amount of time available between the publication of the TLAA on 19 January 2022 and the effective date of 1 March 2022, coupled to the fact that ETI is calculated monthly, has put a lot of pressure on everybody. Purpose of the ETI Act
The purpose of the ETI Act is to encourage employers to hire young people between the ages of 18 and 29 by subsidising their wage cost. The ETI is therefore an employment incentive, not a training incentive. As an aside, Government subsidises the cost of training employees in two ways that I am aware of:
1.Learnership Incentive (Allowance)
If the studies are in the form of a SETA-provided learnership in terms of the Skills Development Act, the Learnership Incentive (as it is now called) has been available from 2001 to assist employers with these costs. 2.Bursaries and Scholarships
Bursary schemes reduce the taxable value of the fringe benefit that results from the payment by the employer on behalf of the employee to a recognised training institution for the training of either the employee, or the relatives of the employee. The bursary training expenses paid by the employer on behalf of the employee are allowed as a deduction in the hands of the employer. Background to ‘ETI Schemes’
Several years ago SARS became aware of what is now referred to as ‘ETI Schemes’, and after investigation, the action that Treasury and SARS decided to take first appeared in the public domain in the 2021 Budget Review, as follows:
“Some taxpayers have devised certain schemes using training institutions to claim the ETI for students. To counter this abuse, it is proposed that the definition of an “employee” be changed in the Employment Tax Incentive Act (2013) to specify that work must be performed in terms of an employment contract that adheres to record‐keeping provisions in accordance with the Basic Conditions of Employment Act (1997). The Problem with ‘ETI Schemes’
According to the final Explanatory Memorandum issued by National Treasury and SARS on 25 January 2022, these schemes while varying in nature, are broadly along the following lines. 75 of 1997). As soon as we get clarity, a Newsflash will be issued.

A Tribute to Dave Teron on his Passing
It was with great sadness that I heard the news of the passing of Dave Teron on Tuesday 28th February 2023. Some of those who are new to payrolls might not know of him, but Dave played a major role in achieving recognition for payrolls in South Africa as a financial system that stands independently of other systems on its own feet. Besides opening his own payroll supplier company, Paywell, in the early 1980’s, Dave also established both the South African Payroll Association as well as the Payroll Academy that has helped thousands of learners over the years to achieve a National Diploma in Payroll Administration Services, putting them in a position to be able to seek job opportunities in this field. In 1989, with the assistance of the SARS Director of law at the time, Mr Ian Meikeljohn, the Payroll Authors Group was established to assist both SARS and payroll suppliers to provide for the complexity of the administration of the SITE requirements in their respective systems. The five payroll provider companies that were instrumental in the establishment of the PAG were Accsys, Paywell (represented by Dave), Paywise, QPAC, and VIP Payroll. In short, Dave can only be described as a ‘baanbreker’ of the South African payroll world. He was a regular figure in the gym and spent much of his free time in diving spots around the world, including Indonesia (particularly Bali) and the remote waters of New Guinea, taking beautiful underwater photographs of the reefs and seawater life. Dave’s surviving family includes his wife, two children, and grandchildren. We send our condolences to them during this difficult time. From the PAGSA and from me in particular, thank you Dave for your massive contribution to payrolls over the years. Rest in peace. Rob Cooper
Chairman Payroll Authors Group of South Africa
All information provided by the PAGSA is subject to our DISCLAIMER.