Most South African taxpayers earn income from a single source, their employer, which is called taxable remuneration. Employers deduct tax (PAYE) each month according to SARS tax tables, with rates ranging from 18% to 45% depending on earnings. These deductions are reported and paid to SARS monthly via the EMP201 process.
At the end of the tax year (February), employers reconcile total PAYE payments through the EMP501 process, which includes detailed employee earnings and deductions shown on IRP5 tax certificates. SARS uses this to verify whether the correct tax was paid; discrepancies can lead to refunds or additional payments.
Tax becomes more complex when individuals earn income from multiple sources, such as side hustles, commissions, investments, or rental income, on top of, or instead of, formal employment.