A client called asking if this is correct. Having never heard of this, and after trolling the SARS website I could find no reference to buyback of annual leave. I googled and found correspondences to old payroll and HR explanations (2009-2010) saying it's deemed a bonus and thus taxed at 50 to 55% tax (??? really not sure how valid this is)
TaxTimsays: 15 January 2014 at 12:55
That is incorrect, the highest marginal tax bracket is only 40% and the employer could withhold that percentage, but it will reverse out at the time of filing. Else apply for a tax directive of the lesser percentage.
As for 50%, we are not aware of anything like that.
Renesays: 15 January 2014 at 13:29
Thank you so much for your confirmation - I didn't think it was correct, but because I couldn't find anything definitive I wanted another's opinion
TaxTimsays: 15 January 2014 at 17:43
Only a pleasure!
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