What Amount of Your Salary Is PAYE?

By Trev Gami •  Updated: 01/23/24 •  4 min read

According to the Income Tax Act, all employees who earn taxable income must pay a tax known as Pay-As-You-Earn (PAYE). The employer deducts this tax from the worker’s remuneration and pays it to the South Africa Revenue Service (SARS). The employer pays a net salary after deducting PAYE from the gross amount earned by the employee. However, there are certain aspects of the worker’s earnings that are subject to tax at certain rates. Other sources of income are exempt from tax. 

The determination of tax liability, particularly PAYE, differs due to different factors. Therefore, the Income Tax rate is not fixed or universal. This article explains some basic concepts of PAYE as they apply to employees in various sectors. 

What Amount of Your Salary Is PAYE?

Workers in South Africa are liable to pay PAYE if they earn money above the tax threshold shown below.

Tax Threshold 2024

The above tax thresholds are based on cumulative income earned per year by workers belonging to different age groups. 

In some cases, you will not pay tax if your taxable income falls below a certain level, depending on your age group. One crucial aspect you should know about PAYE is that when you earn higher taxable income, it means you will pay more tax to SARS. 

How Is PAYE Tax Calculated on Salary?

Tax Threshold 2024

The SARS table below is used to determine your tax.

Tax Table 2024

Taxable income (R) Rate of Tax

1-237 000 18% of taxable income

237 101-370 500 42 678 + 26% of taxable income above 237 100

370 501 – 512 800 77 362 + 31% of taxable income above 370 500

512 801 – 673 000 121 475 + 36% of taxable income above 512 800

673 001 – 857 900 179 147 + 39% of taxable income above 673 000

857 901 – 1 817 000 251 258 + 41% of taxable income above 857 900

1 817 001 and above 644 489 + 45% of taxable income above 1 817 000

Tax Rebates 2024 

Primary (Below 65 years) R17 235

Secondary (65 years & older& R9 444

Tertiary (75 years & older R3145

Assuming that you earn a regular salary of R10 000 per month in 2024, you can calculate your PAYE by following the steps below. 

When the employer pays contributions like medical aid, retirement annuity, or pension fund on behalf of the employee, they must deduct these expenses from the worker’s earnings when calculating PAYE. 

Is PAYE Calculated on Gross or Net Salary?

PAYE is calculated from your gross salary, which includes salaries, allowances, bonuses, and benefits paid before deductions of tax. Income tax is calculated every month, and the employer pays it to SARS monthly. If you earn per week, your PAYE will be calculated using the formula above to determine the annual amount using the SARS tables. 

What Is the Minimum Wage for PAYE?

The minimum wage for PAYE in South Africa is determined by the tax threshold below. 

Tax Threshold 2024

Your employer is supposed to deduct tax every month when you earn a taxable salary or commission. The amount you earn is taxed according to the benefits and other sources of income you have. 

All employees who earn taxable income in South Africa are supposed to pay income tax also known as PAYE. As long as your annual income exceeds the threshold determined by SARS, you are liable to pay tax. The employer deducts the tax from the amount earned by an employee and pays it to SARS every month. PAYE is calculated using the tables provided by SARS every year, but this can be confusing at times. If you’re uncertain about how to calculate SARS, it is a good idea to enlist the services of a tax professional to handle that task for you. 

Keep Reading

How Much Is PAYE Tax Deduction In South Africa?

How Much Is PAYE Tax Deduction In South Africa?

The Difference Between Income TAX And PAYE Reference Number

The Difference Between Income TAX And PAYE Reference Number

The Difference Between Income TAX And PAYE Reference Number. In this section, we will highlight what distinguishes the various terms mentioned above.

How Do I Find My PAYE Reference Number

How Do I Find My PAYE Reference Number

The reference number is extremely important for a variety of tax-related tasks, including filing tax returns, making payments, etc

How Do I Apply For A PAYE Reference Number?

How Do I Apply For A PAYE Reference Number?

How Do I Apply For A PAYE Reference Number? Not sure how to do this? Then this is the article for you!

How Much Interest & Penalties Do You Pay For Late Payment Of PAYE?

How Much Interest & Penalties Do You Pay For Late Payment Of PAYE?

In this blog post, we will discuss the penalties, fines, and consequences that can be imposed on individuals who fail to comply with certain rules or regulations. 

How to Pay PAYE Online

How to Pay PAYE Online

While this blog post may address PAYE in South Africa, the focus will be on how to pay PAYE online.

How to Capture PAYE Submissions on Pastel Partner

How to Capture PAYE Submissions on Pastel Partner

With this program, you can accurately process your payroll and manage your tax affairs efficiently. Read on to learn how to capture PAYE submissions on Pastel Partner. 

Requirements for Applying for a PAYE Certificate

Requirements for Applying for a PAYE Certificate

What are the requirements for applying for a PAYE certificate. This blog post will answer the common queries on PAYE certificates and registration. 

How to Claim Back Your SARS PAYE As A Student

How to Claim Back Your SARS PAYE As A Student

How to Claim Back Your SARS PAYE As A Student. This guide explains how to reclaim your SARS PAYE as a student. 

What Documents Are Needed to Apply For A PAYE Number?

What Documents Are Needed to Apply For A PAYE Number?

Below is the comprehensive list of documents needed to apply for a PAYE number in South Africa. 

How to Use Unallocated Payments to Allocate to PAYE

How to Use Unallocated Payments to Allocate to PAYE

In this informative guide, we will explore the details of using unallocated payments to make your PAYE process more efficient.

How to Submit Supporting Documents For PAYE Audit Letters

How to Submit Supporting Documents For PAYE Audit Letters

As we continue to talk about the need for supporting documents, we will share with you how one can submit supporting documents for PAYE audits.

What Does A PAYE Minus Mean On Payslip

What Does A PAYE Minus Mean On Payslip

The systematic approach mentioned here aims to simplify tax compliance for employees and tax authorities.

Why Does PAYE TAX Change Each Month

Why Does PAYE TAX Change Each Month

Why Does PAYE TAX Change Each Month. Learn more about the changes in tax every month, the PAYE calculation

How to Request PAYE SDL Transfers On SARS eFiling

How to Request PAYE SDL Transfers On SARS eFiling

In this blog post, we will share with you how to request a PAYE SDL transfer on the popular SARS eFiling system.