Why is there a difference betweem online income tax calculators and SARS docs

[Grubby]

I am using this onloine tax calculator to calculate my tax but it differs from the result i get if i use this document from SARS. Why ?
For exmple, say i earn a gross salary of 70000.00 a month and I contribute R132000.00 annualy towards an R.A. So using the online calc. i get this.

Taxable income for the year: R 708,000.00
Tax you will pay / PAYE: R 16,105.00
Take home pay: R 42,746.28 per month

This adds up with the online PAYE tax tables. '
'
However if i use the rates of tax for individuals i get this:

Taxable income = gross minus R.A.
T.I. =840000.00-132000.00 = 708000.00
So my taxable income is 708000.00
And according to the rate of tax table my annual tax i owe sars is:
R147891.00 + 39% of taxable income above 555 600
so this is 147891 + 39% of (708000-555600)
which is 147891+59436
=207327
so my my monthly tax is 207327/12
17277.00

but the online calc says 16105 ?

Why the difference ?

 

[rh1]

Not a tax practioner but a taxpayer: did you take into account the primary rebate.

Secondly if in doubt speak to an expert. Someone that actually specialised in tax.

Like financial advisors, no tax expert would be able to give you advice over a forum.

You can also go to a SARS branch who should be able to give you advice as well.

 

[Grubby]

Not a tax practioner but a taxpayer: did you take into account the primary rebate.

From what i understand the primary rebate only applies to individuals who earn under a certain amount a year. But even if it did apply to everyone it would futher lower the amount owed to sars every month making the discrepancy even bigger

 

[phoneJunky]

Taxable income = gross minus R.A.
T.I. =840000.00-132000.00 = 708000.00
So my taxable income is 708000.00
And according to the rate of tax table my annual tax i owe sars is:
R147891.00 + 39% of taxable income above 555 600
so this is 147891 + 39% of (708000-555600-14067)
which is 147891+59436
=201840.87
so my my monthly tax is 201840.87/12
16820.07 - 310 - 310 (if two medical dependants)
=16200.07

Taking into account medical and rebate. There might be more stuff that you are doing to reduces it - Just showing that you could get close

 

[krono9]

From what i understand the primary rebate only applies to individuals who earn under a certain amount a year. But even if it did apply to everyone it would futher lower the amount owed to sars every month making the discrepancy even bigger

The primary rebate is available to every tax payer. It only reduces your tax payable. If you earn up to R78 150, tax on this would be @18% = R14 067, therefore your salary "seeming" tax free because the rebate cancels it out.

On your example:

Annual Salary   R840 000
RA Deduction    R132 000
Taxable Income  R708 000

Tax on taxable income per tax tables:
a. R147 891  +
b. (R708 000 - R555 600) * 39%
Less Primary Rebate of R14 067
Tax Payable for the year R193 260
Per month R16105

 

[KalMaverick]

From what i understand the primary rebate only applies to individuals who earn under a certain amount a year. But even if it did apply to everyone it would futher lower the amount owed to sars every month making the discrepancy even bigger

No. TaxTim takes it into account, your calculation doesn't.

Therefore one is overstated, reducing it will bring it into line.

 

[Grubby]

Thanks Krono9

That make a lot of sense!