I will be starting a business soon, I just wanted to know, if the business earns more than R10 0000 profit a year, what will the tax amount be? an if I pay myself a salary from it will I have to pay tax on it?
Will you be registering a company or running the business as a sole trader?
Ashsays: 1 May 2014 at 15:35
I will be registering it.
TaxTimsays: 1 May 2014 at 15:38
If the company has only you as an employee then it will be paying 28% tax on profits. However if you are paying yourself a salary then the company can reduce the profits by the salary and therefore the tax. You would pay tax as per the tax rates set out in the 2015 Budget.
Ashsays: 1 May 2014 at 17:30
If I use the profits of the company which I pay tax on, for my personal purposes, is it fine? Seeing that tax was paid on it?
TaxTimsays: 2 May 2014 at 9:32
If you use the profits of the company then you would be declaring a dividend and a further 15% tax must be paid. You cannot just use the profits as the company is a separate legal entity. What is the profit of the company before salaries?
Ashsays: 2 May 2014 at 12:00
I'm just trying to figure out how much it will cost if I should start a business, so I'm assuming R100000 profit per annum which is like R8400 profit a month, what I would pay on that?
TaxTimsays: 2 May 2014 at 16:50
It would be cheaper to run the business in your own name than start an actual company based on that turnover and profit. R100 000 per annum in your own name would amount to about R5 000 in tax.
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