How does fixed percentage tax directive for commission earners get implemented on Sage?

SOLVED

I  obtained a fixed percentage tax directive from SARS in 2019 as I am a commission earner. Payroll has advised me that when a fixed tax directive is implemented in the Sage Payroll system, the year to date tax is recalculated. In my case my taxable earnings were approx 41% to 45%, the tax directive is 34%. They did a dummy payslip on normal earnings (no commission) based on the 34% directive and came out with Tax value of over R57k, about twice the usual tax I was paying as per tax tables on the 41%. To me this does not make sense at all, if the directive is lower than the tax tables, then why is the system calculating my tax owed to SARS to be such a ridiculous amount on my normal earnings. In addition SARS rule is that the directive should only be applied when there is a commission, otherwise the employer must ignore it. My tax practioner advised me that all payroll systems have such a rule built into the software, however our payroll vendor claims its not possible to do this. This issue has been going on since November 2019. Please provide some clarity, is it the Sage payroll system or the vendor who does not know what they are doing?

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    Good day, 

    Please advise what is your Site Code? 

    Regards, 
    Luanne

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    verified answer

    Good day Felicia 

    Thank you for your post,

    Kindly advise us which Sage Payroll system are you referring to in your post or you site code , so we can investigate the history of the issue.

    We can't speak on behalf of your tax practitioner, however, we can advise that in Sage Pastel Payroll there is no way to separate the Commission from the rest of the remuneration, if you have a tax directive, the system has no way of know what it is for and calculate certain values at different annual incomes.

    Also, bear in mind that once you apply a tax directive, you will no longer be entitled to any type of tax relief, ie. tax deductible deductions, medical aid tax credits, tax rebates.  This could cause the tax to be more than it was previously stated.

    Kind Regards

    Siphiwe