The tax year, also called the year of assessment, is the twelve months over which an individual's income tax is measured. For South African individuals and payroll it runs from 1 March to the last day of February.
What it means
The tax year sets the boundaries for almost everything in payroll. Tax tables, rebates and thresholds are published per tax year. Year-to-date earnings and PAYE accumulate within it and reset at the start of the next one. An employee's IRP5 covers exactly one tax year.
Where it fits in
Pay periods are numbered from the 1 March start of the tax year. PAYE annualisation works against the full tax year, and the EMP501 reconciles all the monthly EMP201 declarations for the year against the IRP5 certificates. Mid-year onboarding needs take-on figures precisely because totals are tracked per tax year.
Key rules
- Runs 1 March to the end of February for individuals and payroll.
- Tax tables, rebates and thresholds are set per tax year.
- Year-to-date totals accumulate within it and reset at the next year's start.
- The IRP5 and the EMP501 reconciliation each cover one tax year.
