24 August 2015 at 11:55
how do i work out the estimated profits for provisional tax payment to be effected end of august?
This entry was posted in Tax Q&A and tagged Salary / IRP5, Provisional Tax, Medical, Donations, Deductions, Retirement, Dividends, Audit / Verification. Bookmark the permalink.
24 August 2015 at 16:27
You need to estimate your taxable income (i.e profits) for the full year based on the six months to date (i.e March - August). If your income is reasonably regular, then you simply double the earnings to date. Otherwise, estimate based on known contracts/clients for the rest of the year.
Your estimated taxable income is all your income minus the business-related expenses incurred in earning that income. Also subtract any medical deductions, pension fund, retirement annuity fund contributions, donation deductions and any exempt income.
The SARS form will automatically calculate the related tax and rebates and then halve the tax due to be paid end of August.
You can make a more accurate estimate of taxable income for the full year when you make your second payment in Feb next year.