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Tax on Sole Trader

Posted 26 August 2015 under Tax Questions



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Tader says:
26 August 2015 at 6:23

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?

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TaxTimTaxTim says:
26 August 2015 at 16:08

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.

See more details at the links below.
What is Provisional Tax? How and when?


Am I a Provisional taxpayer?

Tax is payable on the "net" amount only - this is income less all your business related expenses.

Please register for TaxTim and let us assist you to complete your provisional and tax returns correctly!
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