A fixed-percentage directive tells the employer to deduct PAYE at a set percentage of an employee's remuneration rather than running the normal calculation. SARS marks this type with the directive indicator F.
What it means
The standard PAYE tables can over- or under-tax people whose income is irregular or variable, such as commission earners. A fixed-percentage directive smooths this by fixing one rate SARS considers appropriate for the year, which the employer applies to each payment regardless of how it fluctuates.
Where it fits in
The directive's percentage replaces the table calculation for the employee it covers, for the period it is valid. It is one of the two main directive indicators alongside the lump-sum directive (L). The directive number and percentage must be captured and applied exactly as SARS issued them.
Key rules
- Withholds PAYE at a flat percentage instead of the tax tables.
- Carries the SARS directive indicator F.
- Common for commission earners and other variable-income employees.
- Applied exactly as issued, for the validity period of the directive.
