What Is The Meaning Of Personal Income Tax?
Personal income tax is a form of tax imposed by governments on income earned by individuals.
This form of income tax is charged on an individual’s wages, salaries, and other types of earnings.
According to law, taxpayers must submit an income tax return on a yearly basis in order to determine their tax obligations.
Governments collect revenue through income taxes. They are utilized to pay for public services, fulfill government obligations, and provide items to citizens.
The following are examples of amounts that an individual may receive and from which taxable income is calculated :
Who Must Pay Personal Income Tax?
For the 2024 tax year, (1st March 2023 to 29th February 2024)
- R95 750 – if you are under the age of 65.
- R148 217 – If you are between the ages of 65 and 75.
- R165 689– for taxpayers aged 75 and older.
You must pay income tax when you have earned more than :
For the 2023 tax year, (1st March 2022 to 28th February 2023)
- R91 250 – if you are under the age of 65.
- R141 250 – If you are between the ages of 65 and 75.
- R157 900 – for taxpayers aged 75 and older.
Examples of payments that an individual may earn from which taxable income is calculated include :
- Compensation (employment income) for example : salary, wages, bonuses, overtime, fringe benefits (taxable), allowances and some lump sum benefits.
- Business or trade profits and losses.
- Profits or income derived from an individual’s status as a trust beneficiary.
- Director’s fees.
- Investment income (Interest and Foreign Dividends).
- Rental income/losses.
- Royalties income.
- Annuities.
- Income from pension.
- Specific capital gains tax.
