An employer gave salary advances, which will be recorded in the accounting logs as loans during lockdown (an advance (loan) is based on the difference between the employee's salary and the TERS Benefit). Is the employer obligated to raise PAYE on the sala
Author: The Payroll Authors Group of South Africa
Important:
This answer is based on tax law year ending 28 February 2021.
Answer:
The definition of remuneration in paragraph 1 of the Fourth Schedule states: “means any amount of income which is paid or is payable to any person by way of any salary, leave pay, wage, overtime pay, bonus, gratuity, commission, fee…” This means if the employer has paid the remuneration to the employee although it has not become due to the employee yet, it is remuneration as defined and PAYE should be deducted in terms of paragraph 2(1) of the said Schedule from such remuneration. Paragraph 2(1) of the Fourth Schedule states: “who pays or becomes liable to pay any amount by way of remuneration to any employee shall, ……, deduct or withhold from that amount, ……, by way of employees’ tax ……..an amount which shall be determined as provided in paragraph 9, 10 or 11 or section 95 of the Tax Administration Act, whichever is applicable, ………….., pay the amount so deducted or withheld to the Commissioner within seven days after the end of the month during which the amount was deducted or withheld…………”