Tax season is here and, as a South African taxpayer, it is important to know how much you need to earn to pay tax. This article will provide an overview of the 2021 South African tax threshold so you can determine whether or not you need to pay income tax.
Tax Threshold in South Africa 2021
In 2021, individuals who are below 65 years old and earn below R79,000 do not need to pay income tax. This amount is known as the primary tax threshold. For individuals who are over 65 years old, the amount is R122,000. This is known as the secondary tax threshold.
How Much You Need to Earn to Pay Tax
In 2021, individuals who earn below R79,000 do not need to pay income tax. For those who are over 65 years old, the amount is R122,000. In other words, if you are below 65 and earn R80,000 or more, you need to pay income tax. Similarly, if you are over 65 and earn R123,000 or more, you need to pay income tax.
In conclusion, it is important to know the 2021 South African tax threshold so you can determine whether or not you need to pay income tax. If you are below 65 and earn below R79,000, you do not need to pay tax. For those who are over 65, the amount is R122,000. If you are below 65 and earn R80,000 or more, or if you are over 65 and earn R123,000 or more, you need to pay income tax.
South Africa is a country known as having various tax requirements for its citizens. Depending on whether you are employed, self-employed, or investing, the amount you are required to pay in taxes could differ significantly. This article will explain how much you need to earn to pay tax in South Africa in 2021.
If you are employed in South Africa, your employer will deduct taxes from your wages each pay period. Under the current regulations, the amount of tax individuals must pay is based on the amount of taxable income they earn per year. This income is summarized on your IRP5 form and submitted to South African Revenue Service (SARS) annually. The 2021 tax rates range from 18% to 45%, depending on the level of income earned.
At the lowest rate of 18%, anyone earning up to R74 750 or less per year is exempt from paying tax. For income earned between R74 750 and R181 930, the tax rate ranges from 18% to 27.5%. Between R181 930 to R302 690, the rate ranges from 27.5% to 35%, and for any income earned above R302 690 the rate is a flat rate of 45%.
For self-employed individuals, the amount of tax you must pay will depend on your level of income. For 2021, the tax brackets operated in much the same way as those outlined above. However, the rate of tax for each bracket is slightly higher due to the lack of PAYE deductions from wages. If you are self-employed and earn up to R74 750 per year, then you will be exempt from paying tax. For income between R74 750 and R181 930, the rate range is from 19% to 28%. For income between R181 930 to R302 690, the rate ranges from 28% to 36.5%, and any income earned above R302 690 is taxed at a rate of 45%.
For investors, such as those who earn an income from renting out a property or dividend income, the tax rate also depends on your level of income. Any income earned up to R64 587 is tax-free, whilst any income earned between R64 587 and R442 225 is taxed at rates ranging from 18% to 36%, depending on the bracket. Lastly, income earned above R442 225 is taxed at the rate of 45%.
In conclusion, the amount of income tax you must pay in South Africa in 2021 depends on the type of income you are earning and the amount of income you are earning. Employed individuals must pay taxes based on the IRP5 form, whilst self-employed individuals and investors must pay taxes based on their respective income and brackets. It is important to remember that any income earned up to R74 750 is exempt from tax, whilst any income earned above this amount is subject to different tax rates.
