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How to calculate Tax on Overtime

Question from Kelly:

How do you calculate tax on overtime?
Does the overtime put you in a higher bracket (pay higher tax percentage) for one month only if you received overtime in one month only?
e. G. Monthly income = R12050
Overtime = R4600
No benefits
How much tax for that month?

TaxTim reply:

Yes for that month you will be taxed at a higher rate as the PAYE is deducted based on the tax tables which are annualized.

Please have a look at this:

This is your take home pay: R14662

This is how you work it out:

Taxable income = Annual gross salary - Pension / Provident / RAF (limited to 27.5% of salary, limited to R350k) - 20% of travel allowance
(You are taxed on 80% of the travel allowance in your Gross salary, so we subtract 20% for the calculation of Taxable income.)
Taxable income = R 199,800.00 - R 0.00 - R 0.00
Taxable income for the year: R 199,800.00
Tax you will pay / PAYE (Pay As You Earn) for your age group and income bracket: R 1,838.33  (as per PAYE tables provided by SARS)
Take home pay = Gross salary - PAYE - UIF
(UIF / Unemployment Insurance Fund is levied at 1% of your gross income, at most R177.12)
Take home pay = R 16,650.00 - R 1,838.33 - R 148.72
Take home pay: R 14,662.95 per month :)

You can make use of our SARS income tax calculator to work out what the tax will be for any other month too.

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