Tax Year 2023/2024

Taxable income Rates of tax – 2023/2024

Tax Thresholds

Companies Income Tax Rates – (Please see small business corporations) 2023/ 2024 : 27%

Small Business Corporations Tax Rates – 

Rates of Tax

Years of assessment ending between 1 April 2023 and 31 March 2024

Rates of tax – Years of assessment ending between 1 April 2022 and 31 March 2023

Applies if:

• All shareholders or members throughout the year of assessment are natural persons who hold no shares in any other private companies or members interest in any other close corporations or co-operatives other than those which:
  • are inactive and have assets of less than R5 000; or
  • have taken steps to liquidate, wind up or deregister (effective for years of assessment commencing on or after 1 January 2011).

• Gross income for the year of assessment does not exceed R20 million.
• Additionally, not more than 20% of the gross income and all the capital gains consist collectively of investment income and income from rendering a personal service. Additionally, investment income includes any annuity, interest, rental income, royalty or any income of a similar nature, as well as dividends and any proceeds derived from investment or trading in financial instruments (including futures, options and other derivatives), marketable securities or immovable property.
• Personal service includes any service in the field of accounting, actuarial science, architecture, auctioneering, auditing, broadcasting, consulting, draughtsmanship, education, engineering, financial service broking, health, information technology, journalism, law, management, real estate broking, research, sport, surveying, translation, valuation or veterinary science, which is performed personally by any person who holds an interest in the company or close corporation. Except where such small business corporation employs three or more unconnected full-time employees for core operations.
• The company, co-operative or Close Corporation is not an employment entity.

Turnover tax for micro businesses

Financial years ending on any date between 1 March 2023 and 29 February 2024

Deductions – Employees

Current Pension Fund Contributions

27,5% of remuneration from retirement-funding employment or R350 000, whichever is the lower. Retirement-funding employment refers to income which is taken into account to determine contributions to a pension or provident fund. Therefore, excess contributions are not carried forward to the next year of assessment but are accumulated for the purpose of determining the tax-free portion of the lump sum upon retirement.

Arrear Pension Fund Contributions

Any contributions in excess of the limitations will be rolled forward and will be available for deduction in future tax years, subject to the annual limitations applicable in those tax years. However, any non-deductible contributions will be available against retirement lump sums or annuity income.

Medical Expenses and Medical Aid Deductions

• Taxpayers 65 and older may claim all qualifying expenditure.
• Taxpayers under 65, where the taxpayer or the taxpayer’s spouse or child is a person with a disability may in determining tax payable deduct monthly contributions to medical schemes (a tax rebate to be known as a medical scheme fees tax credit) up to R364 for each of the taxpayer and the first dependent on the medical scheme and R246 for each additional dependent. When determining taxable income they can also claim a deduction for medical scheme contributions exceeding four times the amount of the medical schemes fees tax credits and claim all qualifying medical expenses (which excludes medical scheme contributions).

• Other taxpayers under 65 may in determining tax payable deduct monthly contributions to medical schemes (a tax rebate to be known as a medical scheme fees tax credit) up to R364 for each of the taxpayer and the first dependent on the medical scheme and R246 for each additional dependent. When determining taxable income they can also claim a deduction for the aggregate of medical scheme contributions exceeding four times the amount of the medical schemes fees tax credits and any other medical expenses, limited to the amount which exceeds 7,5% of taxable income (excluding retirement fund lump sums).

Qualifying expenditure includes:

• • own contributions to medical aid funds in excess of capped amount
  • medical aid fringe benefit determined by the employer in excess of
  • capped amount
  • payments to medical practitioners, nursing homes and hospitals
  • payments to pharmacists for prescribed medicines
  • payments for physical disabilities, including remedial teaching and
  • expenditure incurred for mentally handicapped persons
  • payments for the benefit of any dependents.

Disability means a moderate to severe limitation of a person’s ability to function or perform daily activities as a result of physical, sensory, communication, intellectual or mental impairment, if the limitation lasts more than a year and is diagnosed by a registered medical practitioner.

• Recoveries of expenses (including amounts received from medical aid savings account) reduce the claim

• Expenditure paid by a taxpayer on behalf of a spouse or children. This must be claimed by the spouse who paid the expense.