An indirect tax on the consumption of goods and services in the economy
VAT registration
Compulsory when turnover exceeds R1 million
Permissible when turnover exceeds R50,000
VAT increased from 14% to 15% from 1 April 2018
How VAT is paid over to SARS
1. Calculate output tax
2. Calculate input tax
3. Output tax - input tax = VAT owing to SARS
Output tax
VAT charged on sales invoices
Input tax
VAT paid on purchase invoices
If input tax > output tax, SARS owes you VAT
Calculating VAT
1. Value of sales excluding VAT
2. VAT = value of sales excluding VAT x 15%
3. Value of sales including VAT = value of sales excluding VAT + VAT
Unemployment Insurance Fund (UIF)
Provides insurance against the risk of loss of earnings arising from unemployment, payment of benefits for temporarily unemployed, on sick or maternity leave, and dependents of deceased contributors
UIF contributions
2% of employee's salary, 1% paid by employer, 1% paid by employee
Capped for employees earning above R17,712 per month, maximum contribution of R177.12 per month
Calculating UIF payable
1. Employer pays 1% of payroll
2. Employee pays 1% of payroll
3. Total UIF = 2 x (1% of payroll)
UIF applies to all employers and workers, except workers working less than 24 hours per month, learners, public servants, foreigners on contract, workers receiving state pension, and workers earning only commission
Other calculations to note: Skills Development Levy, Dividend Tax
