Resignation payouts

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SCLittle

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I resigned from my job, gave my notice the 30th September and left the 31 October, a month as required. When I got my final payout they had deducted an excessive amount of income tax. When I queried it I was told that the payroll company calculates tax in advance and when I left they deducted what was left for the year. Is this allowed? Doesn't sound right as I didn't get the money so how can they tax me on it. Also I earned hourly and my tax fluctuated as my pay did so how can they say its calculated for the year in advance if it changes every month?
 
SCLittle said:
I resigned from my job, gave my notice the 30th September and left the 31 October, a month as required. When I got my final payout they had deducted an excessive amount of income tax. When I queried it I was told that the payroll company calculates tax in advance and when I left they deducted what was left for the year. Is this allowed? Doesn't sound right as I didn't get the money so how can they tax me on it. Also I earned hourly and my tax fluctuated as my pay did so how can they say its calculated for the year in advance if it changes every month?
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Ask them for this in writing so that you can query with SARS. See how fast they'll say "oh sorry we made a mistake!"

And please don't vanish like the dozen other new members who ask us for advice. Please come back and tell us what happened in the end.
 
No, that makes no sense.

One, it isn't up to them - it is up to SARS. Your company does not know much money you will earn over the next few months, so how do they know how much tax you owe?

The only possible explanation is that they undertaxed you for some reason before, which would be very very strange.
 
3WA said:
It's Pay As You Earn, not Pay Before You Earn. How can you pay tax on money you never earned?
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Has happened to me.. I was taxed on a bonus I never received many years ago. In the end however, SARS did fix up the issue, and I received threatening Whatsapp messages from them about how they were going to "sort me out" because SARS hammered them apparently.
 
ArtyLoop said:
Has happened to me.. I was taxed on a bonus I never received many years ago. In the end however, SARS did fix up the issue, and I received threatening Whatsapp messages from them about how they were going to "sort me out" because SARS hammered them apparently.
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Could be that OP's company is trying to do something illegal here.

OP, get a final payslip and get that explanation in writing.
 
ArtyLoop said:
Has happened to me.. I was taxed on a bonus I never received many years ago. In the end however, SARS did fix up the issue, and I received threatening Whatsapp messages from them about how they were going to "sort me out" because SARS hammered them apparently.
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Means they were trying to pocket the money. Must have done it before too but you were smart enough to query so their game was up.
 
ArtyLoop said:
Has happened to me.. I was taxed on a bonus I never received many years ago. In the end however, SARS did fix up the issue, and I received threatening Whatsapp messages from them about how they were going to "sort me out" because SARS hammered them apparently.
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Were you working for the mafia?
 
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ArtyLoop said:
Has happened to me.. I was taxed on a bonus I never received many years ago. In the end however, SARS did fix up the issue, and I received threatening Whatsapp messages from them about how they were going to "sort me out" because SARS hammered them apparently.
Click to expand...

Very dodgy. SARS won't bill them for that money unless they outright lie about how much they paid in salaries.
 
SCLittle said:
I resigned from my job, gave my notice the 30th September and left the 31 October, a month as required. When I got my final payout they had deducted an excessive amount of income tax. When I queried it I was told that the payroll company calculates tax in advance and when I left they deducted what was left for the year. Is this allowed? Doesn't sound right as I didn't get the money so how can they tax me on it. Also I earned hourly and my tax fluctuated as my pay did so how can they say its calculated for the year in advance if it changes every month?
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Did you receive any commissions or bonuses or have a change in salary between March and now?
 
If you take your pension as a lump sum expect to be taxed upto 40 percent or more. Same with any leave owing.
 
OP you will need to get a pay slip and see what your resignation pay out was described as. If the company simply increased your basic salary for the month then in the tax increase is reasonable however you will be able to claim it back when you file your tax in 2019. The reason you would be over taxed is so that the same amount of tax is paid every month. The payroll system will take you annual salary calculate the annual tax and spread it equally over the year however if they increased your salary for only 1 month the payroll system will calculate tax for the remainder of the year less any tax already paid.

I am not 100% but you might have been able to get a sars directive to recalculate your taxable income and pay less tax on the payout.
 
SCLittle said:
I resigned from my job, gave my notice the 30th September and left the 31 October, a month as required. When I got my final payout they had deducted an excessive amount of income tax. When I queried it I was told that the payroll company calculates tax in advance and when I left they deducted what was left for the year. Is this allowed? Doesn't sound right as I didn't get the money so how can they tax me on it. Also I earned hourly and my tax fluctuated as my pay did so how can they say its calculated for the year in advance if it changes every month?
Click to expand...

If memory serves me right : your company would have lodged for a tax directive from SARS, that generally calculates your tax liability on your previous year's return. Anything above or below will be corrected next tax session.....
 
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