Hi all, I'm considering starting a Sole Proprietor business. I'm not exactly sure regarding the tax implications. Let say for example I receive R10,000 per month (independent contractor I receive this from 3 different sources)... All this income goes into my personal bank account... Should I now pay personal tax on the whole amount of R10,000 or do I just pay personal tax on the net amount after my deductions for bringing forth the income?And if I hire one employee and I get R5k and he gets 5K per month, on what amount must I pay personal tax? The R10,000 or R5,000?
If you earn income as an independent contractor, you would need to register for provisional tax and pay tax 2-3 times per year only if you earn taxable income above the tax threshold. This amount is R73,650 per year for the current tax year.