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I freelance now and again but have a very low monthly income. Do I need to declare & register?

Posted 7 March 2014

I love your business model, very innovative.

I have a full time job and started offering to do freelance web designing for people. I have been told some conflicting information about tax, from being taxed 40% on additional income to additional income not being necessary to declare if its non-recurring.

I have a full time job and don't charge much for creating websites and there is the recurring income of web hosting that I charge clients monthly. I probably create a site once a month for about R2000 and hosting comes to a total of R400 a month (for all the sites I host). So additional monthly income is max around R2400 and that is not every month.

Firstly, do I need to declare this and secondly, is it better if I register as a company?

TaxTim TaxTim says:
7 March 2014 at 10:07

Registering a company for tax purposes on this additional income would only make sense if you earn more than about R500 000 per year from normal income, if not then the costs and increased tax do not make it worthwhile.

You would need to declare this income, if you have any expenses against it then you can deduct these. The extra income would be taxed at your marginal rate of tax, so the bracket you fall into.

If you earn more than R20 000 from this income (after deducting expenses) then you would need to register as a Provisional taxpayer? and submit further returns.

Thando says:
7 March 2014 at 11:41

Will the additional net income be added to my "normal income" and then I'm taxed on the total or is additional net income taxed from zero?

TaxTim TaxTim says:
7 March 2014 at 16:07

It will be added and you will be taxed on the total.

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