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pension, superannuation allowance, retiring allowance or stipend, whether incash or otherwise, and whether or not in respect of services rendered.In addition to the general definition above, the following items are specificallyincluded in remuneration:• annuities,• any amount received for services rendered by virtue of any employment orthe holding of any office,• restraint of trade payments,• any amount received in respect of the relinquishment, termination, loss,repudiation, cancellation or variation of any office or employment, excludinglump sum awards from a pension, provident or retirement annuity fund,• lump sum benefits from a pension, provident or retirement annuity fund,• any amount received in commutation of amounts due under any contractof service,• the cash equivalent of any fringe benefits calculated in accordance with theprovisions of the Seventh Schedule (see Fringe Benefits, section 6),• an allowance or advance included in taxable income by section 8(1)(a)(i),other than a travel, subsistence or public office allowance,• 80% of any travel allowance,• 50% of any allowance granted to the holder of a public office to defrayexpenditure incurred for the purposes of his office,• gains made by the exercise, cession or release of any right to acquiremarketable security as contemplated in section 8A,• gains made from the disposal of any qualifying equity share ascontemplated in section 8B, and• gains made as a result of the vesting of any equity instrument ascontemplated in section 8C.The following items are specifically excluded from the definition of remuneration:• amounts paid in respect of services rendered by a person ordinarilyresident in South Africa in the course of any trade carried on independently,• any pension payable under the Aged Persons Act, 1967 or the BlindPersons Act, 1968,• any disability grant or allowance under the Disability Grants Act, 1968,• any grant or contribution under the Children’s Act, 1960,• any amount paid to an employee wholly in reimbursement of expenditureactually incurred by the employee in the course of his employment, and• any annuity under an order of divorce or decree of judicial separation, orunder any agreement of separation.10 Payroll Pocket Guide 2010 |11
2.3.1 Balance of Remuneration (Paragraph 2(4), 4th Schedule)The amount of employees’ tax (PAYE and SITE) to be withheld from theemployee is calculated on the balance of remuneration, which is theremuneration remaining after deducting:• current and arrear contributions to approved pension fund schemes andretirement annuity funds that are processed on the payroll, within specifiedlimits (see Deductions, section 5),• at the option of the employer, current and arrear contributions to approvedretirement annuity funds which the employee has paid directly and suppliedproof thereof annually, within specified limits (see Deductions, section 5),• at the option of the employer, income replacement policy contributionswhich the employee has paid directly and supplied proof thereof annually,not subject to any limit,• contributions made by an employee to a registered medical scheme thatare processed on the payroll, within specified limits (see Deductions,section 5),• at the option of the employer, contributions to a registered medical schemewhich the employee has paid directly and supplied proof of, within specifiedlimits (see Deductions, section 5) and• any donation by the employee, made by the employer for which theemployer received a S18A(2)(a) receipt, within specified limits (seeDeductions, section 5).Employees’ tax calculated in terms of a directive is based onremuneration and not on the balance of remuneration.2.3.2 Net Remuneration (Paragraph 11B(1), 4th Schedule)Net remuneration is used to calculate the amount of SITE and PAYE that anemployee must pay. Net remuneration is calculated by excluding certain items,which are only subject to PAYE, from balance of remuneration. These itemsinclude amongst other:• remuneration paid to employees who are not in standard employment(temporary employees),• remuneration paid to a director of a private company or a member of aclose corporation,• travel allowances,• public office allowances,• annuities from benefit funds and• lump sums from retirement funds.Payroll Pocket Guide 2010|1111
Page 2 and 3: Quick ReferenceSubsistence Allowanc
Page 4 and 5: DISCLAIMERThis document includes am
Page 6: 5. Tax Deductible Deductions 255.1
Page 10 and 11: 2.2.2 Personal Service Providers (P
Page 14 and 15: 2.3.3 Deemed Remuneration and Direc
Page 16: Employees that work less than 22 ho
Page 19 and 20: allowance will be granted, and the
Page 21 and 22: This calculated allowance is an ann
Page 23 and 24: 3.6.2 Taxation of Broad-Based Emplo
Page 25 and 26: uniform, as is reasonable, is exemp
Page 29 and 30: The maximum value of any donation t
Page 31 and 32: • 4% of the determined value if t
Page 33 and 34: • full ownership of the accommoda
Page 35 and 36: Be aware that under certain conditi
Page 37 and 38: Employers are not allowed to issue
Page 39 and 40: 9. INCOME AND ASSESSMENTIncome tax
Page 41 and 42: The Unemployment Insurance Act is a
Page 43 and 44: 11.1 EmployerAll employers register
Page 45 and 46: The W.As 8 form gives an interpreta
Page 47 and 48: Fringe Benefit Codes3801 General Fr
Page 49 and 50: STATUTORY RATES OF TAX FOR 2010/11I

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