Page 8 - Employees tax

PROVISIONAL TAX

Explanation of the example

• Assume a basic amount of R500 000, as assessed for the 2015 year of
assessment. If you are busy with the 1st payment for the 2017 year

of assessment’s provisional tax payment (i.e. on 31 August 2016), the
basic amount will be R500 000. No increase in the basic amount is
necessary as not more than 18 months have passed since the
previous’ year of assessment being 28 February 2015. If you are busy

with the 2nd payment for the 2017 year of assessment’s provisional
tax payment (i.e. on 28 February 2017), the basic amount must be
increased. An increase in the basic amount is necessary as more than

18 months have passed since the previous’ year of assessment being
28 February 2015.

• The increase is calculated @ 8% per annum on the simple interest i.e.
8% x R500 000 = R40 000 per annum. The last year that the taxpayer
was assessed was 2015, thus you will have to add the 8% two times.

• The basic amount for the 2017 2nd provisional tax payment
calculation will be:

• R500 000 (2015) + R40 000 (2016) + R40 000 (2017) = R 580 000.

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