1.3 Income Tax

Income tax is the money paid to government from wages to pay for schools, hospitals, infrastructure etc.

The amount of tax depends on:

• how much you earn
• your age
• whether you are a member of retirement annuity
• For example: The employee and employer each contribute 1% to UIF based on the total
  remuneration of the employee. Calculate the monthly amount paid to the fund if the gross
  salary of the employee is R12 3 456,78 per annum.
  Answer: 2% × R12 3 456,78 = R2469,14 pa
  Per month = R2469,14 ÷ 12 = R205,76

Watch the video below that explains what income tax is and the way in which income tax works.