Statutory deductions

Question

Hello 
 I have a South African company who has employed a resident of Botswana to work in Botswana for their company. What South African statutory deductions are compulsory for this employee?

Avril.Ramdhunee · Answer

Dear Estelle Wilsnagh thank you for using Sage city 
 I managed to locate the following information from the payroll pocket guide (Page 10) Residence Based Taxation (section 1) 
 Payroll Tax Pocket Guide 2021/2022 
 From 1 March 2001 the &ldquo;residence based&rdquo; taxation system replaced the &ldquo;source based&rdquo; taxation system that was previously used in South Africa. 
 The residence based system states that an employee must be taxed on his world-wide income in the country where he is resident. Note that citizenship is not equivalent to residency - a non-South African citizen can become a resident of South Africa by virtue of the physical presence test, and is then liable for income tax in South Africa on his world-wide income. 
 Non-residents must be taxed on income derived from a source within South Africa, that is, where the services are actually rendered. According to section 1 of the Income Tax Act, a person can either be ordinarily resident or a &lsquo;deemed&rsquo; resident by means of the physical presence test 
 The following SARS link contains the various tax guides, that may also provide you with guidance: https://www.sars.gov.za/types-of-tax/pay-as-you-earn/ 
 
 While other Sage city member may offer input, you can work with your Business Partner or SARS for guidance on your query. Once you have received advice you can always contact the support team for guidance on how to apply this in your Sage payroll product. 
 Thank you 
 Avril Ramdhunee

Sage Payroll Professional

Statutory deductions

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