Payroll software gets the maths right almost all the time, but the numbers it produces are only as good as the information it's given. A wrong setting, an outdated allowance or a missed update can sit on a payslip for months before anyone notices. None of these are common, but each one is easy to check in a couple of minutes, so it's worth knowing what to look for.
1. An outdated tax year or bracket
Tax brackets, rebates and thresholds change almost every year after the February Budget Speech. If a payroll system isn't updated in time, employees can be over- or under-taxed for a pay period or two. Compare the PAYE line on a payslip against the current SARS tax tables, or run the same gross salary through the PAYE calculator to see what it should be.
2. The wrong age-based rebate
South Africa's tax rebate increases at age 65 and again at 75. If a date of birth is captured incorrectly in a company's HR system, an employee can be taxed as though they're in the wrong age bracket, which changes the annual rebate applied and therefore the monthly PAYE figure. This is worth checking around a birthday, especially the 65th and 75th.
3. UIF deducted past the monthly ceiling
UIF is 1% of pensionable earnings, but it's capped at a set monthly ceiling that SARS adjusts periodically. Above that ceiling, no further UIF should be deducted, even if a salary keeps rising. A payslip still deducting 1% of the full salary well past the ceiling is worth flagging. See the UIF calculator for the current cap.
4. A bonus taxed as if it were a regular monthly salary
A 13th cheque or performance bonus is added to annual income and taxed at the marginal rate that applies once it's included, not at a flat rate and not the same way a normal month is taxed. Some simpler payroll setups get this approximation slightly wrong. Compare against the bonus tax calculator if a bonus month's deduction looks unusually high or low.
5. Medical aid or retirement contributions missing from the calculation
Medical scheme contributions and retirement annuity payments can reduce the income PAYE is calculated on, or add a tax credit. If one of these benefits was set up recently, or changed, it's worth confirming the new figure is actually reflected in the tax calculation and not just deducted as a separate line item.
What to do if something looks off
Start with payroll or HR, since most of these are quick administrative fixes rather than SARS issues. Keep a copy of the payslip in question and, if it's not resolved, your annual tax return is where any shortfall or overpayment gets reconciled either way.
Related reading
- How PAYE Works: the full four-step PAYE calculation, explained.
- UIF Explained: eligibility, contribution rules and the monthly cap.
- Understanding Tax Rebates: how the age-based rebate works.