Income tax is the normal tax which is paid on your taxable income.
Examples of amounts an individual may receive, and from which taxable income is determined, include the following –
- Remuneration (income from employment), such as, salaries, wages, bonuses, overtime pay, taxable (fringe) benefits, allowances and certain lump sum benefits
- Profits or losses from a business or trade
- Income or profits arising from an individual being a beneficiary of a trust
- Director’s fees
- Investment income, such as interest and foreign dividends
- Rental profit or losses
- Income from royalties
- Annuities
- Pension income
- Certain capital gains
Expenses allowed by the law for different types of income are the following:
Salary
- Pension fund contributions
- Retirement annuity fund contributions
- Provident fund contributions (only from 1 March 2016)
- Legal costs – under certain qualifying circumstances
- Wear–and-tear – in respect of certain assets
- Donations – to approved bodies
- Repayable amounts – amount received for services rendered as refunded by that person
- Bad and doubtful debts – employment related.
Important: Salary earners who receive certain allowances (for example a travel or car allowance or a taxable subsistence allowance) can claim against the allowance.
Property owners who earn rental income from a property can claim certain expenses relating to the property.
Individuals involved in a trade (a sole proprietor, partnership or a farmer, etc.) can claim certain expenses relating to the production of that income.
