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All about PAYE - Pay-As-You-Earn - Employee Tax

What is PAYE (Pay-As-You-Earn)?

PAYE, or Employees’ tax, is the tax that employers must deduct from the employment income of employees – such as salaries, wages and bonuses, this should be paid over to SARS monthly. 

It's withheld daily, weekly, or monthly, when these amounts are paid or become payable to the employees. 

It ensures that an employee's income tax liability (amount of tax owed) is settled on an ongoing basis, while the income is being earned. 

The advantage of this is that the tax liability for the year is settled over the course of the whole year of assessment.

The amount of PAYE you pay depends on how much you earn and is calculated using tax tables issued annually by SARS.

Who is PAYE for?

The amounts deducted or withheld must be paid by the employer to SARS monthly, by completing the Monthly Employer Declaration (EMP201). 

The EMP201 is a payment declaration in which the employer declares the total payment together with the allocations for PAYE, SDL, UIF and/or Employment Tax Incentive (ETI), if applicable. 

A unique Payment Reference Number (PRN) will be pre-populated on the EMP201, and will be used to link the actual payment with the relevant EMP201 payment declaration.

Ukomelela-HR Outsourced Payroll Specialists

At Ukomelela-HR we help you stay tax compliant by managing your payroll properly.

Contact Us.


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