Different Tax Types
When someone registers a new company there are many reasons for doing so. People get all the necessary documents in place. Research on the competition is done so that they can get the upper edge. Through all of the hussle and bussle many important milestones are overlooked and missed in the life of a registered entity, until someone comes knocking on the door telling you that you owe them money with additional penalties.
This post will highlight some of the compulsory milestones that needs to be taken care of if you want to run a compliant business:
Income Tax – SARS automatically registers all new entities for income tax which is due as per the entity's financial year end. This is due annually
UIF (Unemployment Insurance Fund) – this gives short term relief to workers when they become unemployed or are unable to work because of maternity, adoption leave, or illness. Your company should be contributing towards UIF when you employ your first employee.
PAYE (Pay As You Earn) – is a withholding tax on income payments to employees. Amounts withheld are treated as advance payments of income tax due. This tax becomes payable once you pay an employee a salary above the threshold (R6,312.50).
SDL (Skills Development Levy) – is a levy imposed to encourage learning and development in South Africa and is determined by an employer's salary bill (payroll). The funds are used to develop and improve skills of employees. It becomes applicable when the annual payroll is more than R500,000.00 per annum
VAT (Value Added Tax) – is an indirect tax on consumption of goods and services in the economy. It is compulsory to register for VAT if your annual turnover is R1 million or more.