CATEGORIES
- (47)Accounting & Financial Reporting
- (1)Accounting for Income Tax
- (1)Application of tax rates, s6(2) rebates
- (1)Assessed losses
- (10)Blogs
- (1)Business Advisory
- (8)Capital Gains Tax
- (1)Capital Gains Tax - Individuals Tax
- (1)Capital Gains Tax Implications of Trusts
- (2)Case study: Home office expense
- (1)Case study: Travel allowances
- (1)Company Formations
- (136)Corporate Tax
- (10)Customs and Excise
- (2)Deceased Estate
- (1)Deductions Pre-trade and prepaid expenses
- (1)Deregistration
- (2)Employer and Employee (PAYE and UIF Specific)
- (1)Estate Duty
- (1)Events / Webinars
- (11)Faculty News
- (2)Farming
- (168)Individuals Tax
- (1)Input - Customs Duty
- (3)Interest
- (18)International Tax
- (1)Nature of the rights of beneficiaries
- (1)Notional input tax
- (9)Payroll
- (2)Practical Payroll
- (2)Provisional tax (Link with other Taxes)
- (4)SARS Issues
- (156)Tax Administration
- (2)Tax Administration Part 2B: Resolving Problems with SARS using the Tax Ombud
- (1)Tax Administration Part 3B Dispute Resolution - Objection and appeal
- (3)Tax Dispute Resolution
- (1)Tax Opinions
- (3)Tax Update
- (1)Tax implications of loans to trusts
- (1)Tax residence
- (1)Tax returns and payments
- (3)Transfer-Pricing
- (1)Trust Income / Gain Allocations
- (1)Trust types and income allocations
- (10)Trusts
- (84)VAT
- (3)VAT periods
- (1)Wear and tear allowances
- (13)Wills, Estates & Succession
- (1)Zero Rated
- (2)eFiling
- Show All
GAYE Contributions as a Deduction
- 07 August 2024
- Individuals Tax
- The Tax Faculty Tax Specialist
This article is based on tax law for the year ending 28 February 2025.
1. The Problem / Facts
A South African taxpayer who works abroad, makes contributions towards Give As You Earn (GAYE). SARS did not allow the GAYE contributions as a deduction. Is GAYE tax deductible in South Africa?
2. Applicable Law
ITA 58 of 1962, Section 18A
3. Application of the Law to the Facts
The Give As You Earn (GAYE) scheme, prevalent in the UK, allows employees to make charitable donations directly from their salaries before tax is deducted. Section 18A of the Income Tax Act, 1962 contains the criteria to be met for charitable donations to be considered tax-deductible in South Africa. Specifically, section 18A provides for deductions in respect of donations made to certain public benefit organizations (PBOs) within South Africa.
The key requirements are:
- The donation must be made to a PBO approved by the Commissioner.
- The taxpayer must receive a receipt from the PBO indicating that the donation qualifies under Section 18A.
- The deduction is generally limited to 10% of the taxpayer's taxable income (before the deduction of medical expenses).
Given that the GAYE scheme is based in the UK and the donations are likely going to UK-based charities, the contributions made through the GAYE scheme would not meet the criteria set out in Section 18A for tax deductibility in South Africa. This is likely why SARS has not allowed the GAYE portion as a deductible expense.