The question you might be asking is, why should you even care?
To be honest, for most of you reading this, it doesn’t make a difference at all. But hey, that doesn’t mean it won’t make a difference in future, so keep reading.
Your pay slip – Is it taxable income or gross income?
Chances are if you work for a boss, you receive a salary slip every month. On one side of your payslip is money coming in and on the other side is money going out. At the bottom it says what’s left, and let’s be honest it’s never enough is it?
You can be forgiven for thinking that since you’re being taxed on your monthly salary, that this is your taxable income. It isn’t & SARS refers to this as your gross income.
The Income Tax Act defines gross income as the total amount, in cash or otherwise, received by or accrued to you, excluding receipts and accruals of a capital nature.
Without getting too technical, you can see that your monthly salary is an amount of cash received by you. This means it’s gross income.