Tax directives are often issued by SARS to instruct employers how to deduct employees’ tax from certain payments such as termination lump sums and arbitration awards. More information about these types of directives can be found in the following article:
However, this page deals with another type of tax directive, which might be issued in circumstances such as the following:
- to alleviate potential hardship faced by an employee
- to correct previous tax calculation errors
- where an employee earns commission income
The procedure to add a tax directive in the above-mentioned cases is the following:
- Go to an employee’s profile and click on Add next to Regular Inputs.
- Click on Tax Directive under Other.
- Then select the Directive Type from the drop-down menu:
- “Fixed Amount – IRP3(c)” – this means that a fixed amount of tax will be deducted on each payslip to which this regular item applies. Enter the Amount.
- “Fixed Percentage – IRP3(b) and IRP3(pa)” – this means that a fixed percentage of tax will be calculated on the taxable income, before taxable income deductions are taken into account. Enter the Percentage.
- Enter the Directive Number.
- Click Save.