The tax threshold is the annual income amount a person can earn before any income tax is payable. It follows directly from the rebates: the threshold is the income at which the tax from the tables exactly equals the rebate.
What it means
Because the rebates are age-based, so is the threshold - higher for those 65 and over, higher still from 75. An employee earning under the threshold for their age has no PAYE withheld at all. The threshold is a useful single number, but it is a consequence of the rebates rather than a separate rule.
Where it fits in
In payroll the threshold determines whether an employee has any PAYE at all. SARS publishes the thresholds each tax year alongside the tables and rebates, and they shift whenever those change.
Key rules
- The income level below which no PAYE is due.
- Derived from the age-based rebates, not set independently.
- Rises at age 65 and again at 75.
- Updated by SARS each tax year with the tables and rebates.
