Taxes. Just the word is enough to sends shivers down one’s spine.
A friend recently told me that he would rather pull off his own toenails with pliers than redo his tax return. I told him he was being melodramatic, soothed his nerves with a stiff Jack Daniels and pushed the horrid image of him doing his taxes to the back of my mind.
Well for those of you required to fill out a tax directive, that time is nigh. But who is required to fill one of these out, you ask? Erm…well…this is where we turn to GalbraithRushby for assistance:
- Anyone who earns independent contractor/freelancer income (coded 3616)
- Anyone who earns mainly (more than 50%) commission from their employer (commission code 3606)
- Anyone that receives a lump sum form of a retirement fund
- Employees that receive a retrenchment, death or retirement payout from their employers
- Personal service companies
OK, so we have that cleared up. So what is a tax directive then? Again, we thank GalbraithRushby:
A tax directive serves as an instruction issued by SARS to an employer on how to deduct your employees’ tax from certain payments where the prescribed tax tables do not cater for a particular situation…[it] is not a final tax, [and the] employee’s tax that is deducted from remuneration acts as a credit against your end of year income tax liability.
In English please?
If your salary isn’t set and you freelance, or get paid in commission, you are being taxed at a certain rate for each job that may be too high or too low depending on what your gross annual income ends up being. The tax directive helps you mediate this, meaning you can better establish what you should be taxed at and avoid any nasty end-of-year surprises.
Should you need to fill out a tax directive, and the task seems too daunting to take on without assistance, the good folk at GalbraithRushby are here to help. We can’t promise they will offer soothing Jack Daniels, but what they do offer in terms of expertise and tax know-how is far more valuable.
