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Tax Take-On Balances

Tax take-on balances can be entered only for employees whose appointment date does not fall within your first payroll period and where this period is not the first one of the tax year (i.e. in March). Entering these balances allows SimplePay to generate complete bi-annual filing submissions (IRP5s) for your employees. The balances can also be used to calculate payslip tax going forward, depending on the tax total method selected. These balances can be captured individually or in bulk.

Filing Documentation Generation

For our system to generate the required filing documentation and tax certificates for bi-annual filing, there must be at least one finalised payslip on SimplePay for that financial period. Therefore, if you are backdating to a previous financial period, you would create a pay frequency starting in February of that financial period, enter the tax take-ons, and duplicate and then finalise the February payslip. This will prompt the system to use the February payslip and tax take-on values to generate the filing documentation for that financial period.

Tax Total Method

The tax total method determines whether or not the employee’s take-on balances are included for the purposes of performing the payslip tax calculation. SimplePay uses SARS’s cumulative tax calculation, and we recommend including the take-on balances in this calculation to achieve the most accurate results by the end of the financial year. More information on the tax calculation can be found in the following section:

Selecting “IRP5” as the tax total method will tell the system to include the take-on balances in the tax calculations going forward whereas selecting “None” will cause them to be excluded. As mentioned, we generally recommend the first option.

Please note: The take-on balances will be included in the employees’ IRP5s irrespective of which one of the above methods is chosen.

Adding Tax Take-On Balances Individually

Take-ons can be added/edited individually for each employee as follows:

  • Go to the employee’s profile, and click on Edit Info > Take-On Balances > Edit Balances.
  • Select the tax total method (as discussed above).
  • Enter the relevant totals in the boxes for the corresponding code(s). Note that certain take-ons require more than one input – please see below.
  • Select the Retirement Funding Income determination, if applicable.
  • Complete the ETI section, if applicable.
  • Click Save.

Adding Tax Take-On Balances in Bulk

Take-ons can also be entered in bulk by going to Employees > Bulk Actions > Take-On Tax Totals, and entering the relevant totals for each employee in the corresponding columns. Please see the section below on codes requiring multiple inputs.

These balances can also be uploaded using an Excel template, which can be downloaded directly from the Bulk Inputs page for Take-On Tax Totals. This is discussed in greater detail on the following help page:

RFI and ETI

RFI and ETI information cannot be entered in bulk currently and will need to be captured individually as indicated above, if necessary.

Codes Requiring Multiple Inputs

Please take note of the following tax codes that require multiple inputs in order to be captured correctly:

Company Car (4582/3802)

  • Code 4582 - Company car taxed portion (80% or 20% of above figure) must be between 20% and 80% of the value entered for 3802 - Use of motor vehicle.
  • Code 4582 - Company car on operating lease taxed portion (80% or 20% of above figure) must be between 20% and 80% of the value entered for 3816 - Company car acquired under operating lease.

Medical Aid (3810/4474)

  • Code 3810 - Medical aid must be equal to 4474 - Employer's medical aid contributions in respect of employees.
  • Code 4474 - Employer's medical aid contributions in respect of employees must be equal to 3810 - Medical aid.
  • Code 3810 - Medical aid must not be completed if there is no value for 4005 - Medical aid contributions (Including any employer contributions).

RAF Employer Contribution (3828/4006)

  • Code 4006 - Total retirement annuity fund contributions paid and 'deemed paid' by employee (if applicable) is required if there is a value for 3828 - Employer retirement annuity fund contributions.
  • Code 4006 - Total retirement annuity fund contributions paid and 'deemed paid' by employee (if applicable) must be greater than or equal to the value entered for 3828 - Employer retirement annuity fund contributions.

Travel Allowance (3701/4582)

  • Code 4582 - Travel allowance taxed portion (80% or 20% of above figure) must be between 20% and 80% of the value entered for 3701 - Travel allowance.