Anyone can start up a business. Registration at the city council is not necessary, except in certain circumstances. One can trade as a sole proprietor, or form a trading entity i.e. private company.

Only if your business turnover exceeds R1 000 000 per annum, registration is compulsory. One may register on a voluntary basis if turnover is less than R1 000 000.

Apart from income tax, and depending on your business, one should register for:

UIF – (Unemployment insurance fund)
PAYE – (Employees tax)
WCA – (Workmen’s compensation)
SDL – (Skills development levy)

Anyone who is in business to lose money should rather do nothing and sit at home. To pay tax, means that you made money. To grow your business, one needs money. Rather make it your goal to be profitable from day one.

Capital Gains Tax is not a separate tax system. It is merely a way to tax profits on gains not of an income nature. It is calculated using a base cost, which is subtracted from the proceeds. Certain exemptions apply, and one may choose from a few methods to calculate the gain to be included in the year’s taxable income.

It is very important to draw up a will as soon as you have gathered assets, have life insurance, got married or entered into a permanent relationship seen to be the same as a marriage, or when you have children.

All employees working more than 24 hours per month should contribute to the Fund.

All monies received from the employer, whether in cash or in kind, except for commission are regarded as earnings and contributions must be calculated on them. All allowances are regarded as earnings and are liable for contributions.

Entertainment allowances are excluded from the UIF calculation. Learners are also exempt from paying UIF.

Yes there is a limit. The limit exist for a total monthly earning of R 14 872.00, which means that a person earning more than R 14 872.00 per month will only contribute R 148.72 (1% on the total earnings of R 14 872.00) to the Unemployment Insurance Fund.

Yes, the salaries of directors and members should be included on the W.As08 form.

The workmen’s compensation commissioner uses a formula based on estimated salary and wages figures for the next year. This should also include directors / members’ salaries.

If your annual income exceeds the tax threshold, you are obliged to register for income tax. The tax threshold is determined annually by the Minister of Finance during the annual budget speech.