Tax on leave payout and which law governs the tax deducted
By Marc Sevitz · Updated
What amount should you get taxed on for leave payout if it is paid out separately and not with your monthly salary? Is it suppose to be taxed as a lump sum using code 3605? What law governs the tax deducted for this? would it be a SARS law or a LRA law? Please advise
Leave is subject to normal PAYE and should be added to your income for that month and taxed accordingly.
my income for that month was already paid and the leave was paid after where I was advised that it was taxed using code 3605 as it was a lumpsum. Is this correct legally?
Code 3605 is for an annual payment which includes leave pay that is correct.