SOURCE CODE DESCRIPTIONS IRP5 code 4589

Deduction codes

In the electronic file IRP5 code 4589 is used for: The total amount repaid by the employee in the tax year for a s11(nB) recoupment, i.e. restraint of trade. This amount will NOT be used by the ITR12 assessment process, and the employee must still declare the repayment in source code 4058 on the ITR12 return.

Code 4589 is Applicable from 2026 year of assessment

The prescribed Length of IRP5 code 4589 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

SOURCE CODE DESCRIPTIONS IRP5 code 4588 – Validation Rules

The Validation Rules for IRP5 code 4588 in the electronic file are:
• Conditional. All deductions and contributions that have a value must be reported, and those that do not have a value must not be reported
• A maximum of 12 deduction codes must be used. If there are more than 12 codes to be output, they must be combined in accordance with the rules defined
• If the certificate type is ITREG this field must not be completed.
• Cents must be omitted (decimal amount is invalid)
• No negative amounts are allowed
• Code 4587 is only valid from 2021 year of assessment
• If no foreign service income codes are completed, then code 4587 MUST NOT be completed
• If any of the foreign service income codes allowable for the s10(1)(o)(ii) exemption (listed under 4587 in par 6.6) is completed, then code 4587 MUST be completed
• The value of code 4587 may be zero
• The value of source code 4587 cannot exceed the lower of R1.25 mil or the total of the values declared under the s10(1)(o)(ii) allowable foreign service income codes

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

SOURCE CODE DESCRIPTIONS IRP5 code 4588

Deduction codes

In the electronic file IRP5 code 4588 is used for: The total amount repaid by the employee in the tax year for a s11(nA) recoupment. This amount will be used by the ITR12 assessment process

Note:
• The inclusion of this code on the IRP5/IT3(a) certificate replaces the repayment confirmation letter that the employer issued to the employee in the past.

Code 4588 is Applicable from 2026 year of assessment

The prescribed Length of IRP5 code 4588 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

SOURCE CODE DESCRIPTIONS IRP5 code 4042

Deduction codes

In the electronic file IRP5 code 4042 is used for: Amounts deducted for the purposes of calculating PAYE in the current year of assessment in terms of s11(nA) and Fourth Schedule paragraph 2(4)(g) in respect of remuneration amounts paid to an employee in the current or a previous year of assessment that were refunded by the employee to the employer in the current year of assessment, i.e. recoupment of overpaid remuneration / clawback of commission received by the employee for his or her own benefit, excluding administration errors.

Code 4042 is Applicable from 2026 year of assessment.

Note:
• The original remuneration amount paid to the employee by the employer in either the current or an earlier tax year, for the benefit of the employee, which has accrued, must be declared under the relevant income code.
• This code can only be used for s11(nA) deduction and will be used in the ETV calc

The prescribed Length of IRP5 code 4042 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

SOURCE CODE DESCRIPTIONS IRP5 code 4042 – Validation Rules

The Validation Rules for IRP5 code 4042 in the electronic file are:
• Conditional. All deductions and contributions that have a value must be reported, and those that do not have a value must not be reported
• A maximum of 12 deduction codes must be used. If there are more than 12 codes to be output, they must be combined in accordance with the rules defined
• If the certificate type is ITREG this field must not be completed.
• Cents must be omitted (decimal amount is invalid)
• No negative amounts are allowed
• Code 4030 is only valid from the 2010 year of assessment

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

SOURCE CODE DESCRIPTIONS IRP5 code 3957

Lump sum codes

In the electronic file IRP5 code 3957 is used for: Other lump sums (PAYE). Other lump sum payments.
Examples include:
· A Lump sum payment paid/payable by an employer due to normal termination of service (e.g. resignation or retirement), which is NOT a ‘severance benefit’, MUST be reflected under this code
· ‘Antedate salary/pension’ extending over previous years of assessment for years of assessment prior to 2025. From 2025 year of assessment, this must be reflected under source code 3623/3673 (updated in BRS v24 during July 2025)
· Lump sum payments from unapproved funds
· Gratuities paid due to normal termination of service (e.g. Resignation or a lump sum paid upon retirement where employee is below 55 years of age)
· Proceeds from an employer owned insurance policy (risk policy) where the employer premiums were NOT included as a taxable benefit in the employee’s income since the later of:
o The date on which employer become policy holder; or
o From 1 March 2012.
o (i.e. proceeds/benefits are not exempt i.r.o. section 10(1)(gG) of the Income Tax Act)
· Proceeds paid from an employer owned insurance policy (other than a risk policy) where the employer premiums were NOT included as a taxable benefit in the employee’s income since commencement date of policy (i.e. proceeds/benefits are not exempt i.r.o. section 10(1)(gG) of the Income Tax Act).
Code 3957 MUST only be used for foreign service income.

The prescribed Length of IRP5 code 3957 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

SOURCE CODE DESCRIPTIONS IRP5 code 3907

Lump sum codes

In the electronic file IRP5 code 3907 is used for: Other lump sums (PAYE). Other lump sum payments.
Examples include:
· A Lump sum payment paid/payable by an employer due to normal termination of service (e.g. resignation or retirement), which is NOT a ‘severance benefit’, MUST be reflected under this code
· ‘Antedate salary/pension’ extending over previous years of assessment for years of assessment prior to 2025. From 2025 year of assessment, this must be reflected under source code 3623/3673 (updated in BRS v24 during July 2025)
· Lump sum payments from unapproved funds
· Gratuities paid due to normal termination of service (e.g. Resignation or a lump sum paid upon retirement where employee is below 55 years of age)
· Proceeds from an employer owned insurance policy (risk policy) where the employer premiums were NOT included as a taxable benefit in the employee’s income since the later of:
o The date on which employer become policy holder; or
o From 1 March 2012.
o (i.e. proceeds/benefits are not exempt i.r.o. section 10(1)(gG) of the Income Tax Act)
· Proceeds paid from an employer owned insurance policy (other than a risk policy) where the employer premiums were NOT included as a taxable benefit in the employee’s income since commencement date of policy (i.e. proceeds/benefits are not exempt i.r.o. section 10(1)(gG) of the Income Tax Act).
Code 3957 MUST only be used for foreign service income.

The prescribed Length of IRP5 code 3907 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

SOURCE CODE DESCRIPTIONS IRP5 code 3673 – Validation Rules

Normal Income Codes

The Validation Rules for IRP5 code 3673 in the electronic file are:
· Code 3623/3673 is only applicable from 2025 year of assessment
· A maximum of 20 income codes must be used. If there are more than 20 codes, they must be combined in accordance with the rules defined in section 5 of this document
· At least one income code with a value greater than zero must be completed, except if code 3615/3616 is used and years of assessment is 2003 to 2018
· Cents must be omitted (decimal amount is invalid)

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

SOURCE CODE DESCRIPTIONS IRP5 code 3673

Normal Income Codes

in the electronic file IRP5 code 3673 is used for: ‘Antedated salary/pension’ extending over previous years of assessment (PAYE) from foreign Income. Employees’ tax (taxable) accrued in previous year/s due to a settlement agreement or arbitration award or court-order that relates to previous years. This also includes awards granted via settlements out of court and Labour Court disputes. The employer must apply for a tax directive to determine the amount of employees’ tax to be deducted. These are only applicable to foreing income sources.
· Valid from 2025 Year of Assessment
Updated in BRS v24 during February 2025

The prescribed Length of IRP5 code 3673 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

SOURCE CODE DESCRIPTIONS IRP5 code 3623 – Validation Rules

Normal Income Codes

The Validation Rules for IRP5 code 3623 in the electronic file are:
· Code 3623/3673 is only applicable from 2025 year of assessment
· A maximum of 20 income codes must be used. If there are more than 20 codes, they must be combined in accordance with the rules defined in section 5 of this document
· At least one income code with a value greater than zero must be completed, except if code 3615/3616 is used and years of assessment is 2003 to 2018
· Cents must be omitted (decimal amount is invalid)

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