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Is my previous company suppose to apply for a tax directive on retrenchment?

Posted 19 February 2016 under Tax Questions


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Shana says:
17 February 2016 at 11:38

I was retrenched last year July (2015) Once I had received my notice and my retrenchment package I noticed that they had taxed me on my retrenchment package. I asked the Payroll/HR department if they had applied for a tax directive to which they replied that it was not necessary. I told them that as far as my understanding went it was necessary to determine how much tax I should pay if any.

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TaxTimTaxTim says:
18 February 2016 at 9:42

The company needs to do this unfortunately. What was their reasoning for refusing?


Shana says:
18 February 2016 at 16:29

They didn't have a reason.

Just told me that it is not necessary.
But I have contacted SARS and they told me it is always necessary in the case of a retrenchment.

Is that correct?


TaxTimTaxTim says:
19 February 2016 at 18:05

Yes it is, your company is in violation of the Tax Act and needs to remedy this.


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