A company wants to enter into a service level agreement (SLA) with an ex-employee. The position is IT support. He will provide the company with 3 hours a day and attend to tickets which require resolution. He will use a company laptop for control and conf
Author: The Payroll Authors Group of South Africa
Important:
This answer is based on tax law year ending 28 February 2021.
Answer:
A person who renders services is an employee if any one of the following is present: 1. Subject to control or supervision with regards to the manner in which the services are performed 2. Person is part of the organisation for which the services are rendered 3. Person has worked for at least 40 hours per month over the last 3 months 4. The person is economically dependent on the employer for who services is rendered 5. The person is provided with tools of trade or work equipment 6. Person only render services to this single employer. Based on the information in your query, please note that following: · Hours of work (3 hours a day is prescribed) which exceed the 40 hours a month (see 3 above) · Uses company laptop (see 5 above) · Communicate with supervisor daily (see 1 above) SARS has issued an Interpretation Note no. 17 to assist employers incorrectly identifying a worker as an independent worker. In our opinion and the information provided in the query, this is not an independent contractor. The normal tax deduction tables should be applied to all remuneration paid to this person unless there is a valid tax directive issued by SARS, then the employer should apply the instructions on the tax directive.