How much do you have to make to be liable for taxes?

The minimum income amount depends on your filing status and age. In 2020, for example, the minimum for single filing status if under age 65 is $12,400. If your income is below that threshold, you generally do not need to file a federal tax return. Review the full list below for other filing statuses and ages.

What qualifies an employee to be tax exempt?

Exemption from Withholding If an employee qualifies, he or she can also use Form W-4 to tell you not to deduct any federal income tax from his or her wages. To qualify for this exempt status, the employee must have had no tax liability for the previous year and must expect to have no tax liability for the current year.

When does an employer have to pay employees tax?

Employees’ Tax (PAYE) As a general rule, where an employer pays, or is liable to pay, remuneration to an employee, the employer has an obligation to deduct employees’ tax (PAYE – Pay as You Earn) and must register for PAYE with SARS. PAYE must be deducted from the employee’s income and paid over to SARS monthly.

When does the employer have to calculate the employee’s tax liability?

Thus, the employer is required to compute the total salary income payable to an employee during the financial year in the beginning. After considering the incomes exempt, the tax liability of the employee should be determined by the rates as applicable in a given year.

Who is really liable for PAYE?-tax?

At the end of the day the liability for the payment of PAYE rests with the employee. The employer is only required to withhold the tax and to remit it to SARS on behalf of the employee. The employee may very well be at risk if the employer deducts insufficient PAYE.

When is an employee exempt from income tax?

Section 10 (1) (nB) of the Income Tax Act 58 of 1962 (The ITA), provides that, when an employee is: whilst the employer bears the cost thereof, that there are certain amounts that qualify to be exempt from tax in the hands of the employee.