What is income tax?

As the name suggests, income tax is generally payable by a taxpayer on their income. Their are instances where income tax is also payable on other receipts that do not constitute income, such as in the case of capital gains tax. We will consider this at a later stage in the course.

In the Income Tax Act, income tax is referred to as normal tax, and we will sometimes do the same in this course.

This course teaches individuals the basics of income tax in South Africa.

The most common way for individuals to earn income is by earning salaries or wages from their employer. When this happens, employers are required to automatically deduct income tax from salaries and wages and pay this to SARS. Income tax paid in this way is known as Pay As You Earn.

In this video we explain what Pay As You Earn is.