Betty Bookkeeper explains how to calculate PAYE on commission earners – July 2017

Hi Betty

I would like to know how PAYE is calculated when an employee works on commission only? He received R9,000 and a medical benefit of R900 from the employer.

Please help!


Hi Linda

PAYE on commission earners is calculated in the same way as for ordinary salary earners, unless the commission earner has a tax directive – a document from SARS that dictates the fixed rate at which it should be withheld on earnings. Therefore, your commission earner would have the following PAYE withheld:

(R 9,000 + R 900) x 12 = R118,800
R 118,800 x 18% (as per marginal tax rate tables) = R 21,384
Tax less 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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