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How do I calculate Monthly PAYE correctly

Posted 23 June 2015 under Tax Q&A


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Sharon says:
26 May 2015 at 20:04

When calculating and employee's monthly PAYE shouldn't the tax rebate amount be deducted off the taxable salary amount upfront?

So an employee (28 years of age) earning R 10 500. 00 per month = Annual Salary of R 126 000. 00. Should the monthly PAYE be calculated as follows:

R 126 000. 00 * 18 % = R 22 680 - (2016 rebate amount) R 13 257. 00 = R 9 423. 00/12 = R 785. 25 monthly PAYE due. Or Should the calculation be done as follows R 126 000. 00 * 18% = R 22 680. 00/12 = R 1890. 00 monthly PAYE due. I believe the first calculation is the correct way to deduct the monthly PAYE for 2016 and would really appreciate it if you could confirm or correct my logic.

This entry was posted in Tax Q&A and tagged , . Bookmark the permalink.

TaxTim TaxTim says:
26 May 2015 at 22:38

Yes the first option is correct, the primary rebate comes off the taxes owing based on the income earned.


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