What's new in Legislation

2017/2018 Tax Changes

Employment Tax Incentive (ETI) changes

SARS wants to know how many hours an employee actually spent working during a specific month. Therefore we suggest that you always process the number of hours for overtime worked and unpaid leave taken to allow us to provide a more accurate ETI estimation.

Director’s deemed remuneration

Deemed remuneration will be repealed and directors of private companies (and members of closed corporations) will only be taxed on their actual remuneration.

Retirement Funding Income (RFI)

RFI will be defined as income (taxable earnings + taxable perks + taxable company contributions), however it will include the full value of a travel allowance, company car and a public office allowance on which the employer or pension fund or provident fund contribution towards the pension/provident fund is based on.

To clarify the new proposed legislation:

  • RFI will include 100% of a travel allowance or use of a motor vehicle perk and 100% of a public office allowance and not only the taxable value anymore.

To ensure RFI is calculated when the fund itself contributes the retirement fund contribution on behalf of the members/employees to the fund. This means there will also be a fringe benefit amount even though it is the fund that actually contributes.

Where it will be changed in Sage One Payroll

When opening your fund, ensure that the Travel Allowance 100% is selected in the Calculation will be based on section.

Prescribed rate per kilometre

Where the distance travelled for business purposes does not exceed 12 000 kilometres per annum, no tax is payable on an allowance paid by an employer to an employee up to the rate of R 3.55 per kilometre, regardless of the value of the vehicle.

Where it will be changed in Sage One Payroll

Click on Company…Global payslip definitions and find the Reimbursed kilometres over limit definition. Change the value to R 3.55.

Individual tax rates

Click here to download the Tax Rates for employees.