Declaring PayPal income
By Marc Sevitz · Updated
I've been developing apps and have recently been receiving a good income stream from admob, paid to me via PayPal.
Would it be better to register a company?
Or should I continue receiving the money in a personal capacity?
Depending on how much income you receive would determine whether you should register a company or not. Companies are taxed at 28% whereas the highest individual rate is 40%. If you are earning more than about R300 000 taxable income for the year, basically profit then it would make sense to register a company as the lower tax rate could be beneficial to you. However there are administration issues such as company registrations, annual returns, possible audits or independent reviews with running a company so these need to be considered as well.
My basic salary is more than R300k. And so far this year I have made more than R7000 with admob.
What would be the best to do regarding this extra income?
What would be the best to do regarding this extra income?
Comparatively the R7 000 income is a small amount and the hassle of registering and maintaining a company for this amount would lead me to suggest maintaining it in your personal name for now.