[FAQ] Should benefits received from the South African Future Trust be included on the IRP5?


A client qualified for a SA Future Trust(SAFT) loan and received R750 per week for 15 weeks towards his employees’ salaries. SAFT advised that the amount must not be subject to PAYE even though it will be a taxable income and will have to be reported on the IRP5. SARS’ August 2020 Employer Interim Reconciliation Submission letter states that this income should be declared under source code 3724 but doesn’t indicate whether this amount is a taxable or non-taxable amount.

Should benefits received from SAFT be included or excluded from the IRP5?


The Income Tax Act

Paragraph 2(4) of the Fourth Schedule provides for employees’ tax to be calculated on the balance of the remuneration remaining after the deduction of, amongst other things, qualifying retirement fund contributions and bona fide donations. The “remuneration” referred to in paragraph 2(4) is the remuneration as defined in paragraph 1 of the Fourth Schedule.

SARS previously confirmed that the allowances, salaries and wages paid by a Disaster Relief Organisation (DRO) are subject to income tax, and that it is only employees’ tax (PAYE) that should not be deducted therefrom in terms of paragraph 2(4) of the Fourth Schedule, but that such amounts nevertheless remain remuneration as defined.

Application of the principles

Relief Trust benefits should be reported under code 3724 on the IRP5 and UIF should be deducted from it, as it is only excluded from “balance of remuneration” as defined in the Fourth Schedule.

Furthermore, no SDL is payable on this as the SDL calculation also refers to balance of remuneration.

In terms of Section 8 of the Disaster Management Tax Relief Bill, payouts from Covid-19 disaster relief trusts are excluded from the balance of remuneration (par 2(4) of the 4th Schedule).

Webinar Commentary

Further webinar commentary on 2020 Tax Relief Measures during Covid-19: Webinar 2 - Supporting Liquidity through grants and government aid - Free Webinar can be accessed here.


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