Income Tax Act, 1962 (Act No. 58 of 1962)SchedulesFourth Schedule : Amounts to be Deducted or Withheld by Employers and Provisional Payments in respect of Normal TaxPart I : Definitions1. Definitions |
For the purposes of this Schedule, unless the context otherwise indicates—
[Definition deleted by section 6(a) of the Income Tax Amendment Act, 1984 (Act No. 30 of 1984)]
"employee"
means—
| (a) | any person (other than a company) who receives any remuneration or to whom any remuneration accrues; |
| (b) | any person who receives any remuneration or to whom any remuneration accrues by reason of any services rendered by such person to or on behalf of a labour broker; |
| (c) | any labour broker; |
| (d) | any person or class or category of person whom the Minister of Finance by notice in the Gazette declares to be an employee for the purposes of this definition; |
[Paragraph (d) substituted by section 6(1)(a) of the Tax Administration Laws Amendment Act, 2015 (Act No. 23 of 2015)]
| (e) | any personal service provider; or |
| (f) | [Paragraph (f) deleted by the Revenue Laws Amendment Act No. 60 of 2008] ; and |
| (g) | [Paragraph (g) deleted by section 4(1) of Notice No. 16, GG 42169, dated 17 January 2019 (Tax Administration Laws Amendment Act, 2018 (Act No. 22 of 2018) - effective 1 March 2019)]; |
[Definition substituted by section 6(1)(a) of the Tax Administration Laws Amendment Act, 2015 (Act No. 23 of 2015)]
"employees' tax"
means the tax required to be deducted or withheld by an employer in terms of paragraph 2 from remuneration paid or payable to an employee;
"employees' tax certificate"
means a certificate required to be issued by an employer in terms of paragraph 13;
"employer"
means any person (excluding any person not acting as a principal, but including any person acting in a fiduciary capacity or in his capacity as a trustee in an insolvent estate, an executor or an administrator of a benefit fund, pension fund, pension preservation fund, provident fund, provident preservation fund, retirement annuity fund or any other fund) who pays or is liable to pay to any person any amount by way of remuneration, and any person responsible for the payment of any amount by way of remuneration to any person under the provisions of any law or out of public funds (including the funds of any provincial council or any administration or undertaking of the State) or out of funds voted by Parliament or a provincial council;
"labour broker"
means any natural person who conducts or carries on any business whereby such person for reward provides a client of such business with other persons to render a service or perform work for such client, or procures such other persons for the client, for which services or work such other persons are remunerated by such person;
"month"
means any of the twelve portions into which any calendar year is divided;
"personal service company"
[Definition deleted by the Revenue Laws Amendment Act No. 60 of 2008]
[Definition deleted by the Revenue Laws Amendment Act No. 60 of 2008]
means any company or trust, where any service rendered on behalf of such company or trust to a client of such company or trust is rendered personally by any person who is a connected person in relation to such company or trust, and—
| (a) | such person would be regarded as an employee of such client if such service was rendered by such person directly to such client, other than on behalf of such company or trust; or |
| (b) | where those duties must be performed mainly at the premises of the client, such person or such company or trust is subject to the control or supervision of such client as to the manner in which the duties are performed or are to be performed in rendering such service; or |
| (c) | where more than 80 per cent of the income of such company or trust during the year of assessment, from services rendered, consists of or is likely to consist of amounts received directly or indirectly from any one client of such company or trust, or any associated institution as defined in the Seventh Schedule to this Act, in relation to such client, |
[Paragraph (c) substituted by section 6(1)(b) of the Tax Administration Laws Amendment Act, 2015 (Act No. 23 of 2015)]
except where such company or trust throughout the year of assessment employs three or more full-time employees who are on a full-time basis engaged in the business of such company or trust of rendering any such service, other than any employee who is a holder of a share in the company or settlor or beneficiary of the trust or is a connected person in relation to such person;
"provisional tax"
means any payment in respect of liability for normal tax required to be made in terms of paragraph 17;
[Definition substituted by section 6(1)(c) of the Tax Administration Laws Amendment Act, 2015 (Act No. 23 of 2015)]
"provisional taxpayer"
means—
| (a) | any person (other than a company) who derives income by way of— |
| (i) | any remuneration from an employer that is not registered in terms of paragraph 15; or |
| (ii) | any amount which does not constitute remuneration or an allowance or advance contemplated in section 8(1); |
[Paragraph (a) substituted by section 8(1)(a) of the Tax Administration Laws Amendment Act, 2017 (Act No 13 of 2017)]
| (b) | any company; and |
| (c) | any person who is notified by the Commissioner that he or she is a provisional taxpayer, |
but shall exclude—
| (aa) | any public benefit organisation as contemplated in paragraph (a) of the definition of "public benefit organisation" in section 30(1) that has been approved by the Commissioner in terms of section 30(3); |
| (bb) | any recreational club as contemplated in the definition of "recreational club" in section 30A(1) that has been approved by the Commissioner in terms of section 30A(2); |
| (cc) | any body corporate, share block company or association of persons contemplated in section 10(1)(e); |
| (dd) | any— |
| (A) | person in respect of whose liability for normal tax for the relevant year of assessment payments are required to be made under section 33; |
| (B) | natural person who does not derive any income from the carrying on of any business, if— |
| (AA) | the taxable income of that person for the relevant year of assessment does not exceed the tax threshold; or |
| (BB) | the taxable income of that person for the relevant year of assessment which is derived from interest, dividends, foreign dividends, rental from the letting of fixed property and any remuneration from an employer that is not registered in terms of paragraph 15 does not exceed R30 000; |
[Paragraph (c)(dd)(B)(BB) substituted by section 5(1)(b) of the Tax Administration Laws Amendment Act, 2016 (Act No. 16 of 2016)]
| (ee) | a small business funding entity; |
| (ff) | a deceased estate; and |
| (gg) | any entity as defined in section 30B that has been approved by the Commissioner in terms of section 30B(2); |
[Paragraph (gg) inserted by section 6 of the Tax Administration Laws Amendment Act, 2020 (Act No. 24 of 2020), GG44080, dated 20 January 2021]
[Definition substituted by section 6(d) of the Tax Administration Laws Amendment Act, 2015 (Act No. 23 of 2015)]
"remuneration"
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, emolument pension, superannuation allowance, retiring allowance or stipend, whether in cash or otherwise and whether or not in respect of services rendered, including—
| (a) | any amount referred to in paragraph (a), (c), (cA), (cB), (d), (e), (eA), (eD) or (f) of the definition of "gross income" in section 1 of this Act; |
[Paragraph (a) Part 1 of the Fourth Schedule substituted by section 5(1) of the Revenue Laws Amendment Act, 2024, Notice No. 4924, GG50750 dated 4 June 2024 - comes into operation on 1 September 2024 and applies in respect of years of assessment commencing on or after that date (section 5(2))]
| (b) | any amount required to be included in such person's gross income under paragraph (i) of that definition excluding an amount described in paragraph 7 of the Seventh Schedule; |
| (bA) | any allowance or advance, which must be included in the taxable income of that person in terms of section 8(1)(a)(i), other than- |
| (i) | an allowance in respect of which paragraph (c) or (cA) applies; or |
| (ii) | an allowance or advance paid or granted to that person in respect of accommodation, meals or other incidental costs while that person is by reason of the duties of his or her office obliged to spend at least one night away from his or her usual place of residence in the Republic: Provided that for the purposes of this paragraph a person shall be deemed not to carry on a trade independently as aforesaid if the services are required to be performed mainly at the premises of the person by whom such amount is paid or payable or of the person to whom such services were or are to be rendered and the person who rendered or will render the services is subject to the control or supervision of any other person as to the manner in which his or her duties are performed or to be performed or as to his or her hours of work: Provided that where— |
[Paragraph 1(ii) Part 1 of the Fourth Schedule first proviso substituted by section 36 of the Taxation Laws Amendment Act, 2021 (Act No. 20 of 2021), Notice No. 770, GG45787, dated 19 January 2022]
| (aa) | such an allowance or advance was paid or granted to a person during any month in respect of a night away from his or her usual place of residence; and |
| (bb) | that person has not by the last day of the following month either spent the night away from his or her usual place of residence or refunded that allowance or advance to his or her employer, |
that allowance or advance is deemed not to have been paid or granted to that person during that first-mentioned month in respect of accommodation, meals or other incidental costs, but is deemed to be an amount which has become payable to that person in that following month in respect of services rendered by that person;
| (c) | 50 per cent of the amount of any allowance referred to in section 8(1)(d) granted to the holder of a public office contemplated in section 8(1)(e); |
| (cA) | 80 per cent of the amount of any allowance or advance in respect of transport expenses referred to in section 8(1)(b), other than any such allowance or advance contemplated in section 8(1)(b)(iii) that is based on the actual distance travelled by the recipient: Provided that where the employer is satisfied that at least 80 per cent of the use of the motor vehicle for a year of assessment will be for business purposes, then only 20 per cent of the amount of such allowance or advance must be included; |
[Paragraph (cA) substituted by section 8(1)(b) of the Tax Administration Laws Amendment Act, 2017 (Act No. 13 of 2017)]
| (cB) | 80 per cent of the amount of the taxable benefit as determined in terms of paragraph 7 of the Seventh Schedule: Provided that where the employer is satisfied that at least 80 per cent of the use of the motor vehicle for a year of assessment will be for business purposes, then only 20 per cent of such amount must be included; |
| (cC) | 100 per cent of so much of the amount paid or granted as an allowance or advance referred to in section 8(1)(b)(iii) as exceeds the amount determined by applying the rate per kilometre for the simplified method in the notice fixing the rate per kilometre under section 8(1)(b)(ii) and (iii) to the actual distance travelled; |
[Paragraph (cC) substituted by section 8(1)(c) of the Tax Administration Laws Amendment Act, 2017 (Act No. 13 of 2017)]
| (d) | any gain determined in terms of section 8B, which must be included in that person’s income under that section; |
| (e) | any amount referred to in section 8C which is required to be included in the income of that person; |
| (f) | any amount deemed to be income accrued to that person in terms of section 7(11); |
| (g) | any amount received by or accrued to that person by way of a dividend contemplated in— |
| (i) | paragraph (dd) of the proviso to section 10(1)(k)(i); |
| (ii) | paragraph (ii) of the proviso to section 10(1)(k)(i); |
| (iii) | paragraph (jj) of the proviso to section 10(1)(k)(i), |
[Paragraph (g) substituted by section 5(1)(c) of the Tax Administration Laws Amendment Act, 2016 (Act No. 16 of 2016)]
but not including—
| (ii) | any amount paid or payable in respect of services rendered or to be rendered by any person (other than a person who is not a resident or an employee contemplated in paragraph (b), (c), (d) or (e) of the definition of “employee”) in the course of any trade carried on by him independently of the person by whom such amount is paid or payable and of the person to whom such services have been or are to be rendered: Provided that for the purposes of this paragraph a person shall not be deemed to carry on a trade independently as aforesaid if the services are required to be performed mainly at the premises of the person by whom such amount is paid or payable or of the person to whom such services were or are to be rendered and the person who rendered or will render the services is subject to the control or supervision of any other person as to the manner in which his or her duties are performed or to be performed or as to his hours of work: Provided further that a person will be deemed to be carrying on a trade independently as aforesaid if he throughout the year of assessment employs three or more employees who are on a full time basis engaged in the business of such person of rendering any such service, other than any employee who is a connected person in relation to such person; |
[Proviso paragraph (g)(ii) substituted by section 5(1)(d) of the Tax Administration Laws Amendment Act, 2016 (Act No. 16 of 2016)]
| (iii) | any pension or additional pension under the Aged Persons Act, 1967 (Act No. 81 of 1967), or the Blind Persons Act, 1968 (Act No. 26 of 1968), any disability grant or additional or supplementary allowance under the Disability Grants Act, 1968 (Act No. 27 of 1968), or any grant or contribution under the provisions of section 89 of the Children’s Act, 1960 (Act No. 33 of 1960); |
| (vi) | any amount paid or payable to any employee wholly in reimbursement of expenditure actually incurred by such employee in the course of his employment; |
| (viii) | any annuity under an order of divorce or decree of judicial separation or under any agreement of separation; |
[Definition substituted by section 6(f) and (g) of the Tax Administration Laws Amendment Act, 2015 (Act No. 23 of 2015)]
"representative employer"
means—
| (a) | in the case of any company, the public officer of that company, or, in the event of such company being placed under business rescue in terms of Chapter 6 of the Companies Act, in liquidation or under judicial management, the business rescue practitioner, liquidator or judicial manager, as the case may be; |
[Paragraph (a) substituted by section 7(1)(d) of the Tax Administration Laws Amendment Act, 2014 (Act No. 44 of 2014)]
| (b) | in the case of any municipality or any body corporate or unincorporate (other than a company or a partnership) any manager, secretary, officer or other person responsible for paying remuneration on behalf of such municipality or body; |
| (c) | in the case of a person under legal disability, any guardian, curator, administrator or other person having the management or control of the affairs of the person under legal disability; or |
| (d) | in the case of any employer who is not resident in the Republic, any agent of such employer having authority to pay remuneration, |
who resides in the Republic, but nothing in this definition shall be construed as relieving any person from any liability, responsibility or duty imposed upon him or her by this Schedule; and
"tax threshold"
in relation to a natural person means the maximum amount of taxable income of that person in respect of a year of assessment which would result in no tax payable when the rates of tax contemplated in section 5 of this Act and the rebates contemplated in section 6 of this Act for that year of assessment are applied to the taxable income of that person;