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Will he be taxed and will he be able to claim a deduction?.

Posted 18 August 2015

Jane said:
18 August 2015 at 13:42

A sole trader, pays himself a salary of R4000 per month. Will he be taxed on this amount?. Will he be able to claim a deduction of this amount from his business profits?.

TaxTim Marc TaxTim Marc said:
18 August 2015 at 16:28

A monthly salary of R4,000 is below the tax threshold and therefore there will be no tax payable on this amount.
If the business is registered as a company, then he could deduct the monthly salary as a business expense to reduce the company's taxable income. However, a sole trader cannot deduct the salary expense as he is effectively paying himself within the same legal entity.

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