How does SARS calculate tax return?

SARS (South African Revenue Service) calculates tax returns in South Africa based on the information provided by individual taxpayers and businesses. The tax return process in South Africa is somewhat similar to tax systems in many other countries. Here’s a general overview of how SARS calculates tax returns:

  1. Filing a Tax Return:
    • Taxpayers are required to submit their annual tax returns to SARS. The tax return form used depends on the taxpayer’s status (individual, company, trust, etc.) and the type of income they earned during the tax year.
  2. Income Reporting:
    • Taxpayers must report all sources of income accurately. This includes salary income, rental income, investment income, business income, and any other sources of income.
  3. Deductions and Allowances:
    • Taxpayers can claim deductions and allowances to reduce their taxable income. These may include deductions for medical expenses, retirement contributions, donations to registered charities, and more. SARS provides guidelines on what deductions and allowances are eligible.
  4. Taxable Income Calculation:
    • SARS calculates the taxpayer’s taxable income by subtracting allowable deductions and allowances from their total income. This gives the taxpayer’s net taxable income.
  5. Tax Liability Determination:
    • Once the taxable income is determined, SARS uses the applicable tax rates and thresholds to calculate the taxpayer’s tax liability. In South Africa, the tax rates are progressive, meaning higher income levels are taxed at higher rates.
  6. Tax Credits and Rebates:
    • SARS provides various tax credits and rebates that can further reduce the taxpayer’s final tax liability. For example, there are tax credits for individuals aged 65 and older, as well as for specific tax categories like employment tax incentives.
  7. Payment and Refund:
    • If the taxpayer has already paid taxes through PAYE (Pay As You Earn) deductions or provisional tax payments during the tax year, those payments are considered. If the taxpayer has overpaid, they will be eligible for a tax refund. If they haven’t paid enough, they will have to make an additional payment to cover their tax liability.
  8. Assessment:
    • SARS reviews the taxpayer’s return and verifies the information provided. They may conduct audits or request additional documentation to ensure accuracy.
  9. Issuing the Assessment Notice:
    • SARS issues an assessment notice to the taxpayer, which outlines the final tax calculation. This notice will indicate whether the taxpayer is due a refund or owes additional taxes.
  10. Payment or Refund:
    • Taxpayers are responsible for paying any outstanding taxes or, if eligible, claiming their tax refund. SARS will provide instructions on how to do this.
See also  How do I submit an outstanding return to SARS?

It’s important for taxpayers to keep accurate records of their income and expenses and to file their tax returns on time to avoid penalties and interest charges. Additionally, tax laws and regulations can change, so it’s advisable to consult with a tax professional or refer to SARS guidelines for the most up-to-date information on tax return calculations in South Africa.


Top 15 Online Courses and Degrees to improve your employability

Technology and Computer Science Online Courses and Online degrees:

– Computer Science 101 Online Course from Stanford University through edX is a beginner-friendly course that introduces the core concepts of Computer Science, available for free with an option for certification for a fee.
– Programming for Everybody Online degree — Getting Started with Python** by the University of Michigan on Coursera is intended as an entry-level coding class, freely accessible with an optional paid certificate.

Web Development: Online Courses and Online degrees

– Introduction to HTML offered by Codecademy covers HTML basics for free, with advanced options available through paid upgrades.
– Dash by General Assembly is a free course that teaches HTML, CSS, and JavaScript through hands-on project learning.

AI and Data Science: Online Courses and Online degrees

Introduction to Big Data Online Courses provided by the University of San Diego via Coursera delves into the fundamentals of big data, available at no cost with a certificate available for an extra charge.
Machine Learning Online Degrees by Stanford University on Coursera is a broad course on machine learning, data mining, and statistical pattern recognition, free to access with optional certification.

See also  How do I get my SARS certificate via email?

Business and Management: Online Courses and Online degrees

The PG Diploma in Data Science Online Course from IIIT-B focuses on a variety of programming languages and tools and is developed in partnership with leading industry players.
– A Business Analytics Certification Online degree draws attention especially for those targeting analyst and managerial roles, covering essential tools for analytics and data visualization.

Cloud Computing: Online Courses and Online degrees

– The Advanced Certification in Cloud Computing is targeted at engineering graduates looking to fill roles such as Cloud Developer or Cloud Architect.

Project Management and Software Development: Online Courses and Online degrees

Online degrees in Project Management from leading universities incorporate essential management concepts and business communication.
– The MSc. in Computer Science Online degree from Liverpool John Moores University provides the same level of quality and exposure as on-campus degrees through an 18-month online format.

Cybersecurity: Online Courses and Online degrees

The Advanced Certificate Programme in Cyber Security by upGrad and IIIT-B offers an in-depth learning experience over 12 months, combining content hours, projects, and live sessions.

Platforms Offering Diverse Learning Opportunities: Online Courses and Online degrees

FutureLearn offers accelerated courses, microcredentials, and professional certificates across multiple fields with various payment options including subscriptions.
Coursera partners with over 275 universities and organizations worldwide, offering a wide range of degrees and professional certificates.
Udacity specializes in IT and technology courses, with nanodegrees and programs designed in collaboration with industry leaders.
– Codecademy focuses on coding and programming, providing free learning opportunities in various coding languages with additional professional development programs.

See also  How do I claim tax back from SARS?

These courses and degrees are designed to equip individuals with in-demand skills across various sectors, enhancing employability and providing valuable certifications. Whether interested in technology, data science, business, or other areas, these online resources offer flexible and comprehensive ways to learn and advance in your career.