how much tax will a business pay on r100000 profit an if a salary is paid to me,must I pay tax?
By Marc Sevitz · Updated
Will you be registering a company or running the business as a sole trader?
I will be registering it.
If the company has only you as an employee then it will be paying 28% tax on profits. However if you are paying yourself a salary then the company can reduce the profits by the salary and therefore the tax. You would pay tax as per the tax rates set out in the 2015 Budget.
If I use the profits of the company which I pay tax on, for my personal purposes, is it fine? Seeing that tax was paid on it?
If you use the profits of the company then you would be declaring a dividend and a further 15% tax must be paid. You cannot just use the profits as the company is a separate legal entity. What is the profit of the company before salaries?
I'm just trying to figure out how much it will cost if I should start a business, so I'm assuming R100000 profit per annum which is like R8400 profit a month, what I would pay on that?
It would be cheaper to run the business in your own name than start an actual company based on that turnover and profit. R100 000 per annum in your own name would amount to about R5 000 in tax.