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How would I handle tax for freelance work?



I've just started at a company doing part time work (22nd May). I get paid on an hourly basis, and the amount hours I work is up to me (very flexible - I am a student). I work about 120 hours a month which returns over R10 000 per month. Since it wont be a fixed amount every month (could be less, could be up to R16K), am I provisional tax payer? The first IRP6 is at the end of August, how would I go about handling this?

Would I be expected to pay 25% of all the income from June 2013- February 2014, on payment #2 IRP6 (February 2014)?

In terms of business expenses, I constantly need an ADSL line and will have to upgrade the computer I work on within the next coming month for better productivity. The ADSL line is not on my name, but I do have to pay some portion of it per month to the owner (its very mutual - as in, cash in hand, no invoice). How would I handle both these cases?

When would I potentially claim for these business expenses?

TaxTim TaxTim says:
18 June 2013 at 9:21

Do you only provide work for this company? Does the company provide you with a monthly payslip?

Nicolas says:
18 June 2013 at 15:00

Yes I only provide work for this company. I get paid every 25th of each month, but the salary varies depending on hours of work I put in. So its never a set salary of 10K and never a set amount of hours I work every month. I work from home, but am employed by them. I do however have to sort out my own tax, which is why I am unsure of how to go about it.

Thank you for your swift response.

TaxTim TaxTim says:
18 June 2013 at 19:45

Your company will have to apply for a tax directive in determining how much PAYE to take off each month. However sometimes companies don't do this and mistakenly leave their employees to do it.

If that is the case then you would have to register as a provisional taxpayer

Provisional Tax Guide

Your tax would be based on the annualised earnings and then subject to the tax tables. As a commisison based earner you can deduct any expenses which are directly related to you earning the income - business expenses. For the new computer bought you can write off a part of the expense to a wear and tear allowance.

Home Office Expenses

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