Who gets paid in another currency? How does it work?

[Nerfherder]

So recently the owner of the company I work for merged with two UK companies, this effectively made us a UK company with an SA office.

So one of the benefits he touted to us was that we would be able to get paid in pounds, he said we could have UK account and pay tax there.

Who else gets paid like that? How does it work for you and what happens with SARS? What happens when the exchange rate changes?

My dad actually works overseas and gets paid in $. He is waiting for a payment now... He is smiling.

 

[Spizz]

I get paid in euro's. Basically I get a notification from FNB once a month saying you have a forex payment pending and you have 10 days to action it.

That's simply a phone call from me to accept their exchange rate and they transfer the money into my normal cheque account in Rands. You can also have a foreign currency account and transfer some/all into that if you want.

So recently the owner of the company I work for merged with two UK companies, this effectively made us a UK company with an SA office.

So one of the benefits he touted to us was that we would be able to get paid in pounds, he said we could have UK account and pay tax there.

I'd imagine that would be a bad move because you'll pay tax in SA if you are working in SA. So you'll pay tax in SA and UK because their system is very different and not as straight forward as SA. I stand to be corrected because things change all the time, but in the UK you are given a tax code and pay as you earn (PAYE) then claim back at the end of the tax year.

So if you pay tax in UK but don't work there, you'll be due a full rebate (I'd imagine), but you'll need to go through the hassle of claiming it back from British revenue service (HMRS).

IN SA the tax issue is all about how much you spend in and out of the country. So if you work in SA full time but your employer doesn't PAYE, you'll have to submit a tax return once a year like normal and they'll tell you how much you need to pay in.

Who else gets paid like that? How does it work for you and what happens with SARS? What happens when the exchange rate changes?

I'm guessing here, but I'd imagine it'll all be about the amount of Rands you earn. You'll declare your salary was R100 in Jan, R101 in Feb, R98 in March etc. The exchange rate won't come into it.

My dad actually works overseas and gets paid in $. He is waiting for a payment now... He is smiling.

I should be smiling as well, but to be honest, the long term implications are frightening.

 

[Spizz]

I should add, if you have the choice to get pounds or rands, I'd say that getting paid in another currency is quite a comfort just now as the rand tanks.

Not just for the short term gains, but you know you have a safe salary and a whole host of options should the rand go t!ts up Zim style.

 

[bwana]

I'd imagine that would be a bad move because you'll pay tax in SA if you are working in SA. So you'll pay tax in SA and UK because their system is very different and not as straight forward as SA. I stand to be corrected because things change all the time, but in the UK you are given a tax code and pay as you earn (PAYE) then claim back at the end of the tax year.

So if you pay tax in UK but don't work there, you'll be due a full rebate (I'd imagine), but you'll need to go through the hassle of claiming it back from British revenue service (HMRS).

While you would get issued a tax code it would be one that reflects your non resident status so they wouldn't actually deduct anything on payday. That's the arrangement I have. I do still pay my monthly national insurance but you can also opt out of that.

 

[Spizz]

While you would get issued a tax code it would be one that reflects your non resident status so they wouldn't actually deduct anything on payday. That's the arrangement I have. I do still pay my monthly national insurance but you can also opt out of that.

That makes sense, thanks.

 

[Nerfherder]

I should add, if you have the choice to get pounds or rands, I'd say that getting paid in another currency is quite a comfort just now as the rand tanks.

Not just for the short term gains, but you know you have a safe salary and a whole host of options should the rand go t!ts up Zim style.

Yes if I do take the pound salary I'll keep savings that side.

 

[pwstraton]

Just to clear things up - you won't necessarily pay tax in RSA on that income if you are taxed in the UK.

You'll be eligible for either a s6quat or s6quin (unsure off the top of my head) rebate which could result in you not having to pay RSA tax.

You essentially will "deduct" whatever taxes you paid in the UK from your RSA tax liability.

That said, I have no idea what the PAYE consequences are due to this.

 

[Toothless]

I have an online membership-based website. Last year I decided to implement Paypal for all credit card payments and charge member fees in Dollars. I still do have an EFT payment option (which is charged in Rands), but strangely, EFT payments is in the minority. I opened an HSBC bank account and transfer my income from Paypal there.

So, currently, the majority of my online income is in Dollars.