Monthly PAYE withheld from your salary, after rebates and medical credits.
Monthly PAYE
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Annual tax
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Medical credit (year)
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Worked example
Suppose you are under 65, earn R35,000 a month and are not on a medical scheme. Your employer first annualises the salary: R35,000 times 12 is R420,000. Running that through the SARS scale gives a gross tax of R92,707. Subtracting the primary rebate of R17,235 leaves R75,472 of tax for the year. Dividing by 12 gives the PAYE withheld each month, which is R6,289. If you added two members on a medical aid, an annual medical scheme credit of R8,736 would come off the annual tax first, lowering your monthly PAYE by about R728.
| Step | Amount |
|---|---|
| Annualised salary (R35,000 x 12) | R420,000 |
| Gross tax on the SARS scale | R92,707 |
| Less primary rebate | minus R17,235 |
| Annual tax payable | R75,472 |
| Monthly PAYE (annual tax / 12) | R6,289 |
How it is calculated
PAYE is your annual income tax spread evenly across the year, not a separate tax. Your employer projects your regular monthly pay to a full year, taxes it on the progressive scale, and then reduces it by the rebates and medical scheme credits you are entitled to. The yearly figure is divided by 12 so the same amount is withheld each pay run while your salary stays steady. Once-off amounts such as a 13th cheque or a leave payout are taxed separately when they are paid, which is why a bonus month shows a higher deduction. If your circumstances change part-way through the year, the next payslip recalculates to keep the running total on track.