1. What is PAYE in South Africa?

Definition: PAYE (Pay As You Earn) is the system used by SARS (South African Revenue Service) to collect income tax from employees' salaries.

Purpose: Employers deduct tax monthly from employees' remuneration based on SARS tax tables and pay it directly to SARS.

2. How Does PAYE Calculation Work?

The calculator uses the formula:

Where annual tax is calculated using progressive tax brackets:

• R0 - R97,100: 18%
• R97,101 - R129,300: 26%
• R129,301 - R165,600: 31%
• R165,601 - R195,850: 36%
• R195,851 - R237,100: 41%
• Above R237,100: 45%

Explanation: Tax is calculated on annual income and then divided by 12 for monthly PAYE deduction.

3. Importance of PAYE Calculation

Details: Accurate PAYE calculation ensures compliance with tax laws, avoids under/over payment, and helps with financial planning.

4. Using the Calculator

Tips: Enter your gross monthly income (before deductions) to calculate your estimated PAYE tax, annual liability, and take-home pay.

5. Frequently Asked Questions (FAQ)

Q1: Are these the official 2025 tax rates?
A: These are projected rates based on recent trends. Always verify with SARS for official rates.

Q2: Does this include other deductions like UIF?
A: No, this calculator only estimates PAYE. Other deductions may apply to your salary.

Q3: How often are tax brackets adjusted?
A: SARS typically adjusts brackets annually in the budget speech (February).

Q4: What about tax rebates and medical credits?
A: This calculator provides basic PAYE estimation. Rebates would reduce your final tax liability.

Q5: Is this calculator suitable for provisional taxpayers?
A: No, this is designed for employees with standard PAYE deductions.