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8 Simple steps to calculate provisional tax using the latest SARS tax tables

by , 05 April 2016
Provisional tax is where taxpayers estimate and pay their taxes in two payments. In other words, it will be one payment every six months, instead of having to pay one big amount at the end of the tax year.

Here are 8 simple steps you can use to calculate your provisional tax, using the SARS tax tables...

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If you haven't submitted your provisional tax return by 28 February 2016, then SARS will add a R4 000 penalty to your tax bill…
 
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Step#1:

Calculate your estimated taxable income for the tax year.

This is your most important step.

Step#2:

Calculate the amount of tax you'll pay on this taxable income.

You can do this by referring to the SARS tax tables in Chapter P01 of your Practical Tax Loose Leaf Service handbook.

Step#3:

Subtract the annual tax rebate from this amount.

Again, you should refer to the SARS tax tables in your handbook.

This will give you the total amount that you'll have to pay for the tax year.

Step#4:

If it's the first provisional tax return you're calculating, then take away half of the total tax payable for the tax year, after which you'll be left with the amount due for the first period of the tax year.

If you're calculating the second provisional tax return, you can skip this step.

Step#5:

Subtract any employee's tax deducted for the tax year.

Only subtract the first six months if you're calculating the first provisional tax return.

Step#6:

Subtract any allowable foreign tax credits for the tax year. But only if you're completing your first provisional tax return.

Step#7:

Add any outstanding SARS penalties and interest on this amount.

This information will either already be on your provisional tax return, or you can get it from SARS and include it in your tax return.

Step#8:

If it's the second provisional tax return you're calculating, then make sure you subtract any provisional tax which you paid for the first provisional tax period.
 
 

*It's worth noting that, while all companies and close corporations are provisional taxpayers, there are certain criteria which you should meet, as a natural person, in order to qualify as a provisional taxpayer.

To see if you, as an individual qualify, as a provisional taxpayer, as well as to learn examples, for both companies and individuals, for the above-mentioned steps, simply page over to Chapter P 01 in your Practical Tax Loose Leaf Service handbook.

If you don't already have this invaluable resource, click here. 


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