Tax deductions on your pension or annuity income
SARS has clarified its recently introduced legislation that applies to its PAYE deduction system process with regards to pensioners who are in receipt of more than one source of income.
In order to assist pensioners who receive more than one source of retirement income from finding themselves in a higher tax bracket and subject to unexpected tax debt, SARS will provide retirement fund administrators with a more accurate combined PAYE deduction percentage rate. This information will be derived from data available to SARS and thus working together with your retirement fund administrators, from 1 March 2022, all sources of income from pension and annuity funds will be included in a more accurate PAYE deduction amount.
In some cases, your PAYE amount may be slightly higher, but in return, you are unlikely to be faced with an unexpected tax bill at the end of the tax year.
If you are unsure of the financial implications these changes may have on your tax responsibility or you would like an updated tax assessment, feel free to contact our tax division via e-mail: daniellek@hobbsinc.co.za
