The Budget Speech was delivered by Minister of Finance Enoch Godongwana on 22 February 2023. Although no major changes were announced, we must still note the increases in rates to insure compliance with payroll. The following are the changes that will affect payroll for the year going forward.
2023 / 2024 Tax Rates and Rebates
Most changes seen in the Budget Speech 2023 are increases to account for inflation. Personal income tax brackets and rebates have been adjusted by 4.9% in this regard. These adjustments will increase the annual tax-free threshold for persons under the age of 65 years from R 91 250 to R 95 750. Further changes are as follows:
Tax Rates from 1 March 2023 – 29 February 2024
| Taxable Income (R) | Rate of Tax |
| 1–237 100 | 18% of taxable income |
| 237 101 – 370 500 | 42 678 + 26% of taxable income above 237 100 |
| 370 501 – 512 800 | 77 362 + 31% of taxable income above 370 500 |
| 512 801 – 673 000 | 121 475 + 36% of taxable income above 512 800 |
| 673 001 – 857 900 | 179 147 + 39% of taxable income above 673 000 |
| 857 901 – 1 817 000 | 251 258 + 41% of taxable income above 857 900 |
| 1 817 001 and above | 644 489 + 45% of taxable income above 1 817 000 |
Rebates
| Primary | R17 235 |
| Secondary (Persons 65 and older) | R9 444 |
| Tertiary (Persons 75 and older) | R3 145 |
Age
| Tax Threshold Below age 65 | R95 750 |
| Age 65 to below | R148 217 |
| Age 75 and over | R165 689 |
Minimum Wage Increase
It has been announced that the National Minimum Wage Rate will be increased from R23.19 to R25.42 per hour, effective from 1 March 2023. In tandem, wage rates in diverse sectoral determinations have been proportionally raised.
This increase will have an impact on ETI (Employment Tax Incentives) claimants, as it relies on the minimum wage or wage regulating measure to assess the qualification of an employee for ETI. To ensure compliance, users will be required to update their relevant rates.
Medical Aid Tax Credits
Medical tax credits are afforded for contributions towards a medical scheme, according to the number of beneficiaries. The medical aid tax credits will increase from 1 March 2023. The credits deductible are as follows:
| Beneficiaries | Medical tax credit offered |
| Primary contributor | Increased from R347 to R364 |
| First dependent | Increased from R347 to R364 |
| Additional dependent(s) |
|
Subsistence Allowances
The daily amount for subsistence allowance, where the employee is entitled, in respect to meals and incidental costs will increase from 1 March 2023:
- The allowance granted to pay for incidental costs only will increase from R152 to R161 per day.
- The allowance granted to pay for meals and incidental costs will increase from R493 to R522 per day.
The subsistence allowance for expenditures incurred outside of the Republic of South Africa remains unadjusted this year.
Travel Allowances
The fixed rates per kilometer that are used when calculating travel allowances have increased from R4.18/km to R4.64/km.
OID Earnings Threshold
The OID Earnings Threshold has been raised by the Director-General of Employment and Labour from R529,264 per year to R563,520 per year. This threshold pertains to the yearly earnings of individual employees and represents the highest amount of earnings that can be factored into the calculation of OID contributions.
BCEA Earnings Threshold
Similarly, the BCEA Earnings Threshold has been raised by the Minister of Employment and Labour from R224,080.48 per year to R241,110.59 per year. Employees who exceed this threshold will now be entitled to comprehensive protection under the BCEA.
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