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For the sake of this federal government solar power rebate example, (and to keep to a single tax year s rate tables) were going to imagine that its June 2016 and that her income since March 2016 has been the following: Month Salary Commission Taxable Income Tax Paid March 2016.Now, we multiply the tax amount by number of pay periods, and then subtract the tax thats already been paid for the same period.A tax directive makes sense in cases where commission due (and subsequently your total income) varies by only a small margin each month, and you have a fairly predictable track-record on which to base an estimate.The confusion comes from the fact that tax is calculated on a different amount each month (depending on your performance, of course and this can result in different tax rates being applied month to month.The allowable deduction for retirement funding income is limited.5 of gross salary, to a maximum of R350,000 and cant exceed actual contributions.Christine is younger than 65 and therefore eligible for the primary rebate of R13,500.Annual tax R61,296 31 x (R312,000 R293,600).This entry was posted in TaxTim's Blog and tagged Salary / IRP5, Independent Contractor, Donations, Deductions, Commission, Rental Income, Retirement, Depreciation / Wear and Tear, Penalties, Travel Allowance, Audit / Verification.As per our first example, then her total tax paid to date would have been R8,119.34, or R394.66 more than required.See the two sheets on the Dividends, tax, tables - Summary of DTA rates.She receives a fixed salary of R5,000 plus commission on all treatments and product raffles group career sales, which can vary from month to month quite drastically depending on her shifts and bookings.As with most commission earners, Christines commission component can vary month to month.Christine is a 38-year-old sales representative for a printing company.Christines contributions only amount to R12,000 a year, which is well below 27,5 of her annual gross salary so shes able to deduct her full contribution.
R324,000, next, we need to subtract any tax deductions to determine the annual taxable income.