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How to calculate totals under source codes 3696, 3697 and 3698
Posted 29 July 2014 under
If you tried to submit your tax return and got an error relating to 3696, 3697 or 3698 then you might have simply left an amount out! Check your IRP5 to make sure you answered TaxTim's questions for these amounts correctly.
Your IRP5 can show one or more amounts with source codes describing the income you received from your employer that year.
A common example would be:
Salary R240,000 - source code 3601 Medical aid contribution R14,400 - source code 3810 RAF annuity received R24,000 - source code 3610
These amounts and source codes vary from person to person, from job to job, but on every IRP5 the amounts get added up and summarised in total under three further source codes 3696, 3697 and 3698. If income was earned or benefits received, there MUST be totals included for 3696, 3697 and 3698.
3696 - Non-taxable income Only income that is considered non-taxable - that SARS should not be charging you tax on and no PAYE deducted - is included here. This does not include your basic salary in most cases. Add up the amounts next to the following source codes, if you have them, 3602 (Non-taxable income), 3604 (Pension), 3609 (Arbitration award), 3612 (Purchased annuity), 3703 (Reimbursive travel<8000km), 3705 (Subsistence allowance), 3709 (Uniform allowance), 3714 (Other Allowances), 3716 (Subsistence foreign), 3652, 3654, 3659, 3662, 3753, 3755, 3759, 3764, 3766 and 3908 (Surplus apportionments) for whichever of these have been declared. If none of these source codes appear on your IRP5, the amount for 3696 must be 0.
3697 - Gross retirement funding income Generally if you or via your employer, you contribute to a pension fund then your basic income such as your salary will be added with your bonus to be Gross retirement funding income.
3698 - Gross non-retirement funding income This is income that is both taxable and not related to pension fund contributions.
Important! 1. The sum of all the amounts under your Income Received column must match the sum of 3696 + 3697 + 3698. 2. No income can be listed in more than one of either 3696, 3697 or 3698.
Steps to take if the IRP5 from your employer is wrong: If your employer has provided you with an incorrect IRP5 where the amounts under 3696, 3697 and 3698 do not add up to the amounts if you total them under all the incomes then you need to go back to your employer and request them to correct this. If you do not see any of these codes on your IRP5, also go back to your employer and find out why not... SARS will not accept IRP5s' that do not have these source codes on them.
As per our example above: 3696 would be R0 3697 would be R254,400 3698 would be R24,000
Remember: No negative amounts and no cents can be included in 3696, 3697 and 3698.