Tax deduction directives that are issued to individuals that earn commission income is divided into fixed percentage- or fixed amount directives.
These directives in broad terms will replace the staggered tax tables for individuals (the more you earn the more you pay), with a fixed percentage or fixed amount per month deducted for pay-as-you-earn (PAYE).
It is vitally important that this method of calculating PAYE does not create a tax liability for the taxpayer once his/her return is assessed, as this would cause penalties and interest to be triggered as per The Tax Administration Act of South Africa (TAA).
