{"id":69452,"date":"2022-03-14T10:19:18","date_gmt":"2022-03-14T08:19:18","guid":{"rendered":"https:\/\/www.sage.com\/en-za\/blog\/?p=69452"},"modified":"2026-01-29T14:21:57","modified_gmt":"2026-01-29T12:21:57","slug":"2022-23-tax-amendments-how-they-affect-your-payroll","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-za\/blog\/2022-23-tax-amendments-how-they-affect-your-payroll\/","title":{"rendered":"2022\/23 tax amendments: How they affect your payroll"},"content":{"rendered":"
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\n\t\t\t\t\t\t2022\/23 tax amendments: How they affect your payroll\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t

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A few important amendments have been made to the Taxation Laws Amendment Act, 2021 and the Tax Administration Laws Amendment Act, 2021 that affect both employers and employees. Changes were also made to the Basic Conditions of Employment Act (BCEA) earning threshold and the National Minimum Wage rates.<\/p>\n\n\n\n

Here are the amendments, effective from 1 March 2022 unless mentioned otherwise, that might affect you:<\/p>\n\n\n\n

PAYE withholding from annuities\/pension<\/strong><\/h2>\n\n\n\n

As it stands, if a taxpayer is entitled to a monthly annuity from a pension fund, it is taxable in the hands of the taxpayer and is subject to a PAYE withholding by the fund.<\/p>\n\n\n\n

Should the taxpayer have another source of income, for example, a salary, that income is added to the annuity amount to calculate the final tax liability on assessment. Usually, the taxpayer\u2019s tax liability exceeds the PAYE withholding, resulting in an additional tax liability on an assessment that could cause cash flow problems for the taxpayer.<\/p>\n\n\n\n

To alleviate this burden, the Income Tax Act was amended to allow SARS to give the fund\/insurer a fixed rate to determine the amount of PAYE to withhold for those taxpayers who receive other remuneration in addition to an annuity. An employer doesn\u2019t apply for a directive \u2013 it is automatically applied by SARS using the latest data at its disposal. This rate is applicable for the entire tax year unless the taxpayer\u2019s circumstances change.<\/p>\n\n\n\n

A pensioner may request that additional PAYE or the original PAYE rate still be withheld, in which case the employer may comply.<\/p>\n\n\n\n

* This applies to payrolls of funds or insurers (under the Insurance Act) which are used to pay annuities to pensioners \u2013 therefore, not employers in general.<\/em><\/p>\n\n\n\n

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Download our Quick Guide to Payroll Compliance<\/a><\/div>\n<\/div>\n\n\n\n

Long service awards<\/strong><\/h2>\n\n\n\n

Long service awards are a popular way for employers to show that they value the commitment and loyalty of their employees. Previously, these awards were only tax-exempt if they took the form of assets not exceeding the value of R5,000. Should the value exceed that, the excess becomes subject to PAYE.<\/p>\n\n\n\n

\u201cLong service\u201d is defined as an initial uninterrupted period of service of 15 years and any ensuing unbroken period of service of at least 10 years. Employers often provide a range of benefits in exchange for long service, but if the award is not in the form of an asset, it does not qualify for the exemption.<\/p>\n\n\n\n

To cater for a wider variety of extended service awards, these may now be received in the form of:<\/p>\n\n\n\n