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Statutory deductions
PAYE, UIF, SDL, OID and the other deductions South African law requires on every payslip.
Additional medical expenses tax credit The additional medical expenses tax credit (Section 6B) gives extra tax relief for qualifying out-of-pocket medical costs and excess scheme contributions above a threshold.Section 18A donation deduction The Section 18A deduction lets an employee deduct donations to an approved public benefit organisation from taxable income, capped at 10% of taxable income.ETI ETI (Employment Tax Incentive) is a SARS incentive that lets employers reduce their PAYE liability for hiring qualifying youth employees, claimed monthly via the EMP201.ETI wage floor The ETI wage floor is the minimum wage basis an employee must be paid for the employer to claim the Employment Tax Incentive - the national minimum wage, a sectoral measure, or a set floor where neither applies.Medical scheme fees tax credit The medical scheme fees tax credit (Section 6A) is a fixed monthly amount subtracted from PAYE for each person covered by a medical aid - R364 for the main member and first dependant, R246 for each further dependant.National minimum wage The National Minimum Wage (NMW) is the legally required minimum hourly rate South African employers must pay, reviewed annually and used to test eligibility for incentives like ETI.OID OID (Occupational Injuries and Diseases) is the employer-funded levy under COIDA that pays compensation when an employee is injured or falls ill because of their work.PAYE PAYE (Pay-As-You-Earn) is the income tax an employer withholds from an employee's pay each period and pays over to SARS on the employee's behalf.SDL SDL (Skills Development Levy) is a payroll levy employers pay to fund national skills development, collected alongside PAYE and UIF via the EMP201.SDL exemption An SDL exemption frees an employer from paying the Skills Development Levy where its total annual payroll falls below R500 000.Section 11F retirement deduction cap Section 11F caps the retirement fund contributions deductible for tax at 27.5% of the greater of remuneration or taxable income, limited to a yearly rand amount.Statutory deduction A statutory deduction is one the law requires from pay - PAYE and the employee's UIF - as opposed to a voluntary deduction the employee agrees to.Tax bracket A tax bracket is one band of the PAYE sliding scale - a range of taxable income taxed at a set marginal rate, with the rate rising for each higher band.Tax rebate A tax rebate is a fixed amount subtracted from an employee's PAYE based on age - the primary rebate for everyone, with secondary and tertiary rebates added with age.Tax threshold The tax threshold is the income level below which no PAYE is due, derived from the tax rebates and rising with age.UIF contribution The UIF contribution is a small percentage of pay that both employee and employer pay into the Unemployment Insurance Fund, funding benefits for unemployment, illness, maternity and similar events.UIF remuneration ceiling The UIF remuneration ceiling is the monthly pay cap - R17 712 - above which no further UIF contribution is charged, limiting the maximum UIF per employee.
