Tax on leave payout and which law governs the tax deducted

By Marc Sevitz · Updated

Shabnaan

Shabnaan said:
9 June 2015 at 8:14

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
TaxTim Marc

TaxTim Marc said:
9 June 2015 at 9:14

Leave is subject to normal PAYE and should be added to your income for that month and taxed accordingly.
Shabnaan

Shabnaan said:
9 June 2015 at 9:20

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?
TaxTim Marc

TaxTim Marc said:
9 June 2015 at 10:52

Code 3605 is for an annual payment which includes leave pay that is correct.