Understanding the Tax Trace

SimplePay provides a tax trace that allows you to see how the PAYE for an employee was calculated. The tax trace can be viewed by clicking on the Tax (PAYE) link for the relevant payslip when on an employee’s profile. Each section is explained below.

Section	Details
YTD Regular Income	This is the total of all regular income from the beginning of the tax year (1 March) until the current payslip.
YTD Irregular Income	This is the total of all irregular income from the beginning of the tax year (1 March) until the current payslip.
YTD Total Income	This is the sum of the YTD Regular Income and YTD Irregular Income
Tax on Annualised Total Income	The year-to-date figures are used to project a total income for the year, called the annualised total income. This is the tax that would be payable if the employee earns the projected annualised total income for the year. It is calculated in two steps: First, the annualised total income is calculated as follows: (YTD Regular Income x Annualisation Ratio) + YTD Irregular Income. The annualisation ratio is not shown on this page, but it is the inverse of the de-annualisation ratio, which is shown in the YTD Tax calculation near the bottom of the page. Once the annualised total income has been calculated, the tax on this figure is calculated using the SARS tax tables.
Tax on Annualised Regular Income	Next, the annualised regular income is calculated as follows: Annualised total income – Irregular Income. Once the annualised regular income has been calculated, the tax on this figure is calculated using the SARS tax tables.
Tax on Irregular Income	The tax on irregular income is calculated as the difference between the tax on the annualised total income and the tax on the annualised regular income.
YTD Tax	This is calculated by de-annualising the tax on the regular income and adding the tax on the regular income. This represents the tax that the employee should have paid up until this payslip.
Tax for Current Payslip	The PAYE due for the current payslip is the difference between the year-to-date tax calculated and the tax paid on previous payslips, less any year-to-date medical aid tax credits.