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!

Regards,
Linda

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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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