South Africa – 2023 Legislation changes

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Effective from 1 March 2023, the South African Government announced the following Amendments to its income tax law:

Under the amendments the below changes have been implemented:

National Minimum wage has been amended as below:
- 42 per hour
- Farm Workers – R25.42 per hour.
- Domestic Workers – R25.42 per hour.
- Workers employed on an expanded public works programme – R13.97 per hour.
- Workers who have concluded learnership agreements contemplated in section 17 of the Skills Development Act, new rates are indicated in Schedule 2 of the Government Gazette – R13.97 per hour.
The new OID Maximum earnings limit is R563 520.
The prescribed reimbursement rate per kilometre has change to R4.64.
The subsistence allowance has been altered as follows.
- Meals and incidentals – R522.00 per day/part of a day.
- Incidentals only – R161.00 per day/part of a day.
The annual tax rebates have been modified as follows.
- Primary – R17 235.00
- Secondary – R9 444.00
- Tertiary – R3 145.00
- The annual tax thresholds have been adjusted as follows.
  - Under 65 – R95 750.00
  - 65 and older – R148 217.00
  - 75 and older – R165 689.00

Table for calculation of rate per km/travel allowance has been revised as follows:

Value of the vehicle (including VAT) (R)	Fixed Cost (R.p.a)	Fuel Cost (c/km)	Maintenance Cost (c/km)
0 – 100 000	33 760	141.50	43.80
100 001 – 200 000	60 329	158.00	54.80
200 001 – 300 000	86 958	171.70	60.40
300 001 – 400 000	110 554	184.60	65.90
400 001 – 500 000	134 150	197.60	77.50
500 001 – 600 000	158 856	226.60	91.00
600 001 – 700 000	183 611	230.50	102.10
700 001 – 800 000	209 685	234.30	113.10
800 001 and above	209 685	234.30	113.10

The annual income tax rates have been changed as follows:

Taxable income (R)	Rates of tax (R)
1 – 237 100	18% of taxable income
237 101 – 370 500	42 678 + 26% of taxable income above 237 100
370 501 – 512 800	77 362 + 31% of taxable income above 370 500
512 801 – 673 000	121 475 + 36% of taxable income above 512 800
673 001 – 857 900	179 147 + 39% of taxable income above 673 000
857 901 – 1 817 000	251 258 + 41% of taxable income above 857 900
1 817 001 and above	644 489 + 45% of taxable income above 1 817 000

The medical tax credits have been amended as follows:

Situation	Per month (R)
For the taxpayer	364.00
For the taxpayer and one dependant	728.00
For each additional dependant	246.00

The annual Retirement fund lump sum withdrawal benefit rates have been revised as follows:

Taxable income (R)	Rates of tax (R)
1 – 27 500	0% of taxable income
27 501 – 726 000	18% of taxable income above 27 500
726 001 – 1 089 000	125 730 + 27% of taxable income above 726 000
1 089 001 and above	223 740 + 36% of taxable income above 1 089 000

The annual Retirement fund lump sum or severance benefits rates have been adjusted as follows:

Taxable income (R)	Rates of tax (R)
1 – 550 000	0% of taxable income
550 001 – 770 000	18% of taxable income above 550 000
770 001 – 1 155 000	39 600 + 27% of taxable income above 770 000
1 155 001 and above	143 550 + 36% of taxable income above 1 155 000

For the tax year commencing on 1 March 2023, the above-mentioned changes will need to be effected and applied to ensure compliance with the legislated regulation changes.

Please contact your Mercans’ services delivery team for any additional information regarding the implications of the above change

Employer of Record (EOR) South Africa | PEO South Africa | Payroll in South Africa