Betty Bookkeeper explains how to calculate PAYE for commission earners – July 2016

Hi Betty 

I would like to know how PAYE is calculated when an employee works on commission only?

He received R 9,000 and a medical benefit from the employer of R 900.

Please help!


Hi Ryan

PAYE on commission earners would be calculated in the same way as ordinary salary earners, unless the commission earner had a tax directive (i.e. a document from SARS dictating the fixed rate at which should be withheld on earnings). Therefore the commission earner would have the following PAYE withheld:

  • (R 9,000 + R 900) x 12 = R 118,800
  • R 118,800 x 18% (per marginal tax rate tables) = R 21,384
  • Tax minus rebates (assuming the commission earner is under 65 and the sole member of the medical aid) = R 21,384 – R 12,726 – R 257 = R 8,401
  • Monthly PAYE = R 8,401 / 12 = R 700.08

Hope that helps!

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