Tier 1 provisional taxpayer:
Tier 1 provisional taxpayers have a taxable income of less than R1 million.
If you're a tier 1 provisional taxpayer, you must make sure that your estimated tax
due is within 90% of the actual final tax
assessed by SARS.
In other words, you have 10% leeway (grace) on the final tax
payable to SARS to be incorrect.
For example, you estimate that your final tax
is around R95 000, and you pay this as provisional tax
But upon assessment, it turns out that you earn more than that, let's say R100 000, you still fall within the 10% grace, and so you shouldn't be penalised for you under-estimation.
Continue reading to see the other tier…
Tier 2 provisional taxpayer:
You'll be paying a tax penalty of up to R4 000 to SARS on 28 February…
If you haven't submitted your provisional tax
return by 28 February 2016, then SARS will add a R4 000 penalty to your tax
Errors mean double penalties – one for the error, and one for not following the rules!
Don't know where to start?
Or how to calculate the tax
to get your hands on a tell-all guide today! It'll walk you through every step in the provisional tax
process, so you'll never put a foot wrong again!
Tier 2 provisional taxpayers have a taxable income of more than R1 million.
If you're a tier two provisional taxpayer, then you must make sure that your estimated tax
due is within 80% of the actual tax
SARS. In other words, you'll have a 20% leeway, or grace, to be incorrect.
*Those were the two types of provisional tax
tiers, namely tier 1 and tier 2. Make sure you know which tier you fall under.
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