My company is not paying employees taxes... advice for a n00b in regards to this?

[fatzessack]

So I recently started working for a consulting company. I have been there for almost a year now and even though I have been receiving a salary (albeit late most times), I have not received payslips.

The company sometimes pay us in cash, and sometimes in our account.

In addition to the income I receive from their Durban branch, I also do after-hours work for their Pretoria branch and earn quite a bit from that, thereby doubling my income, which is paid into my account.

Now, being straight out of university, I have not registered for tax as yet. I am quite concerned because I am receiving quite a sizable monthly income from both branches combined (ranges from 16k-18k at times). The employees have raised the tax issue with the employers; however, they just ask us for our ID's and then we never hear about it again or they push it under the carpet.

I am worried about not paying tax given my monthly income. Will I be held liable for this? Can SARS still catch on, even though I am not registered to pay taxes? I do have a personal bank account in which my income goes into.

Any advice will be appreciated. Thanks.

 

[Hemi300c]

Start looking for another job, when lined up report them to SARS.

 

[cr@zydude]

Start looking for another job, when lined up report them to SARS.

Yip. Basic conditions of employment call for a salary slip with all deductions noted to be given to you on day of payment.

Small companies try crap like this, you're better off looking for a company doing things legally.

 

[fatzessack]

I shall. Hell, we don't even have a contract of employment. It is all round shady.

 

[j4ck455]

I have been receiving a salary (albeit late most times), I have not received payslips.

The company sometimes pay us in cash, and sometimes in our account.

Right there are the WARNING signs that you need to find another job, the company you are working for is dodgy and fly-by-night and will definitely crash and burn leaving many employees suddenly unemployed and probably without 2 months worth of salary.

Since the employees have no employment contracts (which is a labour law issue), the "employer" could claim that it didn't employ anyone, and that payments made were made to provisional tax payers who are responsible for their own tax payments.

If you do a bit of digging away from work, you will probably find that info on the company's letterhead is fraudulent (company not registered, VAT registration fraudulent).

If you report the company to SARS, do it anonymously and do not apply for a tax amnesty.

 

[fatzessack]

Right there are the WARNING signs that you need to find another job, the company you are working for is dodgy and fly-by-night and will definitely crash and burn leaving many employees suddenly unemployed and probably without 2 months worth of salary.

Since the employees have no employment contracts (which is a labour law issue), the "employer" could claim that it didn't employ anyone, and that payments made were made to provisional tax payers who are responsible for their own tax payments.

If you do a bit of digging away from work, you will probably find that info on the company's letterhead is fraudulent (company not registered, VAT registration fraudulent).

If you report the company to SARS, do it anonymously and do not apply for a tax amnesty.

I hear you. The funniest thing is these people do work for lawyers (RAF claims), and have been in operation for over 3 years now. It astounds me how your clients are LAWYERS, yet you're getting away with doing dodgy **** like this.

 

[moklet]

(RAF) Lawyers are also dodgy.

 

[Nick_K]

Before you decide to do anything try and get more clarity from the company. You do not have to have a tax number in order for the company to be paying PAYE on a monthly basis for you. Twice a year they have to submit and EMP501 and when submitting the final one for the tax year it generates an IRP5 certificate which is how SARS knows how much tax was paid for each employee. SARS recommends that each employee who has an IRP5 also has a tax number but at present this is not actually a legal requirement. As long as you have an ID number or a passport number they will use that to identify you.

The only time that you have to have a tax number is when you file your tax return. At this point if you earn less than R350,000.00 for the year and all of the income is from one employer and it is all a regular salary (no travel or commission for example) then you would not actually need to file a tax return.

They do have to give you a payslip every month, they do have to pay PAYE and UIF across to SARS for you every month and they have to make a UIF declaration to the Department of Labour for you every month. The only way that this would not be the case is if you were an independent contractor but I highly doubt that is happening here.

Take your concerns to them, tell them that you have certain expectations that must be met (legally) and see where it goes from there.

 

[rietrot]

Lol you're living the dream. Everybody wants to boycott taxes but their employers doesn't allow it.
You should phone up your boss or HR and thank them. Stop being ungrateful.

Worst case scenario SARS will require you to pay the tax. So invest that money now wisely.

 

[fatzessack]

Before you decide to do anything try and get more clarity from the company. You do not have to have a tax number in order for the company to be paying PAYE on a monthly basis for you. Twice a year they have to submit and EMP501 and when submitting the final one for the tax year it generates an IRP5 certificate which is how SARS knows how much tax was paid for each employee. SARS recommends that each employee who has an IRP5 also has a tax number but at present this is not actually a legal requirement. As long as you have an ID number or a passport number they will use that to identify you.

The only time that you have to have a tax number is when you file your tax return. At this point if you earn less than R350,000.00 for the year and all of the income is from one employer and it is all a regular salary (no travel or commission for example) then you would not actually need to file a tax return.

They do have to give you a payslip every month, they do have to pay PAYE and UIF across to SARS for you every month and they have to make a UIF declaration to the Department of Labour for you every month. The only way that this would not be the case is if you were an independent contractor but I highly doubt that is happening here.

Take your concerns to them, tell them that you have certain expectations that must be met (legally) and see where it goes from there.

I guess I will. I am certainly not an independent contractor. It's a 9-5 type of job and I, in terms of the LRA stipulations, am an employee. Difference is there aren't any payslips or tax deductions, which is what concerns me. I know employees who have been asking them for years to sort this out, but nothing came of it. Nevertheless, I will speak to them, failing which, I'll jump ship.

The drawback is that the salary I currently earn is quite lucrative and it is difficult to find someone who will match it in my field.

 

[fatzessack]

Lol you're living the dream. Everybody wants to boycott taxes but their employers doesn't allow it.
You should phone up your boss or HR and thank them. Stop being ungrateful.

Worst case scenario SARS will require you to pay the tax. So invest that money now wisely.

Lol I'm trying to be above board here I did see it as a tax revolt at first though... Just that my fears did get the better of me. That being said, I do have a reserve for worst case scenario. I would ideally like to milk it tbh.

 

[SauRoNZA]

Yes ultimately the tax is a personal problem and you are liable for it.

If you have been there for a year why haven’t you registered for tax yet if you know you should be paying it.

In the long run this will just be ending badly for you, not the company so get it sorted out now.

If you have a bank account SARS is already very much aware of it.

 

[RedViking]

See also this thread:

https://mybroadband.co.za/vb/showthread.php/461787-Previous-employer-didn-t-pay-tax-now-what-do-I-do

 

[j4ck455]

I guess I will. I am certainly not an independent contractor. It's a 9-5 type of job and I, in terms of the LRA stipulations, am an employee. Difference is [highlight]there aren't any payslips or tax deductions[/highlight], which is what concerns me. I know employees who have been asking them for years to sort this out, but nothing came of it. Nevertheless, I will speak to them, failing which, I'll jump ship.

The drawback is that the salary I currently earn is quite lucrative and it is difficult to find someone who will match it in my field.

I previously thought you meant that the company was deducting PAYE and UIF but not paying it over to SARS.

Arguably the company is breaking both the labour and tax laws (and then some), but you don't have an employment contract / payslips / IRP5 which is a big problem if you were required to provide evidence that you are an employee.

If the company is not deducting PAYE or anything else, SARS will require you to pay up as a provisional tax payer.

If you decide to make an issue of this with your employer, you will most likely be told to take a hike since the company already has no problem with operating illegally and could care less if you report the company to the CCMA and SARS. The company will say you were an independent contractor and you will have to struggle to prove that you were an employee whilst putting yourself on the hook with SARS which is already trying to squeeze blood out of tax payers.

You should take your time to find another job and leave it at that.

 

[Willie Trombone]

This you will have to nip in the bud. It happened to me - I had my company deduct tax but not pay to SARS and when I left I had to sort out a tax issue to discover they had never paid my tax over. My tax was held up and not cleared for more than three years after that. The worst experience I'd ever had with SARS. Many years ago but mind numbingly painful. Just go to SARS and tell them your story and let them sort it out.

 

[tRoN]

OP. Please clarify. Are they deducting tax and not paying it to SARS (how do you know this) OR are they not deducting any tax at all?

 

[RedViking]

I am not a Tax expert but this is how I understand it.

For 18K income a Month I think you owe ZARS around R2300 per month. That can be allot of money you gonna need to pay SARS excluding penalties and interest if you don't do something about it and the zuma clan finds out about it.

One option is to register for Tax, get your tax number, and tell your unprofessional company to give you all the documents (IRP5? And Payslip) so you can pay your taxes and tell them SARS is waiting for it. If they don't provide it, you report them. You will need to decide how your company is going to react. But in order to pay your income tax you will need all the documents from your company.

The other option is to register for provisional TAX, and you submit your tax twice a year (or three times) through the IRP6 form and eFiling. Usually provisional tax is for an income beside your monthly salary.

In the mean time, find a company that does stuff right even if it means starting with a bit lower salary and working yourself up. The company you work for now sounds like one of those that makes a lot of promises but won't deliver. The least they can do is pay you on time or before a specified time.

Personally I registered for Provisional Tax being in a similar situation , maybe slightly different as I work from home. The company I get my main income from doesn't care about rules and regulations and tax and I am also a Freelancer. So now I just pay provisional tax and make sure everything is up to date and it gives me ease of mind and I don't have to stress about it anymore.

 

[Splinter]

Before you decide to do anything try and get more clarity from the company. You do not have to have a tax number in order for the company to be paying PAYE on a monthly basis for you. .

Nonsense.

 

[AlphaJohn]

Long time ago I was in a similar environment. Got hold of a Company called Highveld personnel and had my co pay them for my services. Highveld then "paid" me a "Salary" with Payslip and all and did all the TAX reqs including filing and so on for me for a small fee. Must admit I did get a substantial amount more than OP but was in the same predicament re TAX.

Edit: I see they now part of Eoh so don't know if its good or bad thing, maybe give them a call you have nothing to lose. https://eohhighveld.co.za/contractors/

 

[SaiyanZ]

Nonsense.

He's right. When I first started working, the company paid my tax without me having a tax reference number. I only needed to sign up and get a tax reference number half a year later when I needed to file my tax return. I also got back a tidy sum from SARS after filing my tax because I had only worked for half the tax year.

This was in 2006 though so maybe things have changed.