Paying Commission to a sales Person - TAX Question

[mh348]

I have a small side business offering a digital product to businesses. I'm currently doing everything my self, but have a family member interested in doing sales to his existing clients and earning a commission only (no salary).

How would it work from my side? The business is registered as a PTY (private company). If The 'rep' does x sales per month and earns a commission of say 5000, would I just reflect this Commission of 5000 paid as an expense and deduct from taxible income? or is there something else?

 

[gfmalan]

If you list that person as a employee, you have to deduct taxes for that employee according to tax tables.

If you say he has clients, does it mean he has a business? Then why not ask him to to invoice you on a monthly basis?

Then you pay the services invoice and you have no need to register and pay taxes over etc.

 

[mh348]

If you list that person as a employee, you have to deduct taxes for that employee according to tax tables.

If you say he has clients, does it mean he has a business? Then why not ask him to to invoice you on a monthly basis?

Then you pay the services invoice and you have no need to register and pay taxes over etc.

He works as an agent and sells other products, so he just does the sale and whichever company's product it was will invoice & collect payment.

Rep/Agent sell product/s >> My Company will then Invoice, deliver & collect payment from client >> I'll pay commission after

 

[gfmalan]

He works as an agent and sells other products, so he just does the sale and whichever company's product it was will invoice & collect payment.

Rep/Agent sell product/s >> My Company will then Invoice, deliver & collect payment from client >> I'll pay commission after

Easiest for you would be to calculate his commision, and ask him to invoice you the amount. You pay invoice as expense and you don’t need to-do extra tax stuff..

 

[Ray7905]

Easiest for you would be to calculate his commision, and ask him to invoice you the amount. You pay invoice as expense and you don’t need to-do extra tax stuff..

+1

 

[mh348]

Easiest for you would be to calculate his commision, and ask him to invoice you the amount. You pay invoice as expense and you don’t need to-do extra tax stuff..

Thanks

 

[blowdart18]

Commission / Incentive is still seen as a taxable income, as an employer you will still be obliged to pay tax on behalf of the employee aka PAYE, and submit relevant details according to the relevant government agency.

You will also need to give this person a payslip reflecting the details of the income earned together with tax deducted.

Like mentioned above, much easier for said person to send you a tax invoice and you pay him for services rendered and then he will be liable for any tax liabilities if any.