← Back

Run a Business

VAT, payroll, tax filing, expenses, and systems

🧾

VAT Registration

💡 VAT is 15% added to the price of most goods and services. You collect it from customers on behalf of SARS. You only need to register if you earn more than R1 million per year.

Simple VAT example:

You sell a product forR1,150
Your price (excl. VAT)R1,000
VAT you collected (15%)R150
You send R150 to SARS, keep R1,000→
VAT Calculator →
0 of 7 steps completed0%

  • 1Confirm you need to register

    ⏱ 5 min

    VAT registration is compulsory if your annual turnover exceeds R1 million. You can register voluntarily if you earn above R50,000 per year — this lets you claim back VAT you paid on expenses.

    ⚠️If you hit R1 million turnover, you MUST register within 21 days or face penalties.

  • 2Log into SARS eFiling and open VAT101

    ⏱ 30 min

    Go to efiling.sars.gov.za → click "Registration, Amendments and Verification" → select "VAT" → complete the VAT101 form.

    🔗 Open eFiling →

  • 3Upload your supporting documents

    ⏱ 15 min

    Required: 3 months bank statements showing business turnover, proof of business address, company registration documents (CIPC certificate), and SA ID.

  • 4Wait for SARS to process (6–10 weeks)

    ⏱ 6–10 weeks

    SARS will verify your application. They may contact you for additional documents or to schedule a visit to your business premises.

  • 5Receive your VAT registration number

    ⏱ Once approved

    SARS issues a VAT registration certificate with your unique VAT number. Display this on all your invoices.

  • 6Add VAT to your invoices

    ⏱ Ongoing

    All invoices must show: your VAT number, the amount excluding VAT, the VAT amount (15%), and the total including VAT.

  • 7Submit VAT201 returns every 2 months

    ⏱ Every 2 months

    Log into eFiling and submit your VAT return. Output VAT (VAT you collected from customers) minus Input VAT (VAT you paid on expenses) = what you pay to SARS.

    ⚠️Late VAT returns attract a 10% penalty on the outstanding amount.

📑

Filing Business Tax

💡 As a business owner, you must file a tax return each year. For a Pty Ltd, this is the ITR14. For a sole proprietor, it's included in your personal ITR12.
1

Keep records throughout the year

Save all invoices, receipts, and bank statements. You need these to calculate your taxable income (revenue minus expenses). Use Wave or Google Drive.

📄 Keep for 5 years
2

Know your financial year end

Most companies use February year end. Your ITR14 (company tax return) must be filed within 12 months of your financial year end.

📅 Annual
3

Pay provisional tax (if applicable)

If your tax bill will exceed R30,000, you must pay provisional tax in 2 instalments during the year (August and February). This is called IRP6.

⚠️ Avoid penalties
4

Claim all legitimate expenses

You can deduct: rent, internet, phone (business portion), fuel (business trips), equipment, staff costs, marketing, bank fees, and accounting fees. Each one reduces your taxable profit.

✓ Reduces tax bill
5

File your ITR14 on eFiling

Log into efiling.sars.gov.za and complete your company income tax return. Pty Ltd company tax rate is 27% of taxable profit.

🖥️ Done online
👥

Payroll & Employing Staff

💡 If you employ people, you must deduct PAYE (income tax), UIF, and sometimes SDL from their salaries every month, and pay this to SARS by the 7th of each month.

Monthly payroll example (R10,000 employee):

Gross salaryR10,000
− PAYE (deducted from employee)− R542
− UIF employee (1%)− R100
Employee receivesR9,358
+ UIF employer (1% — you pay)R100
You pay SARS monthlyR742
0 of 6 steps completed0%

  • 1Register as an employer with SARS

    ⏱ 20 min

    Go to efiling.sars.gov.za → "Register, Amendments and Verification" → register as PAYE employer. This is free and required before you can pay staff legally.

    🔗 efiling.sars.gov.za →

  • 2Register with UIF (Department of Labour)

    ⏱ 20 min

    Register your business at labour.gov.za. You contribute 1% of each employee's gross salary, and they contribute 1% (total 2% per employee).

    🔗 labour.gov.za →

  • 3SDL — Skills Development Levy (if payroll > R500K/year)

    ⏱ —

    If your total annual payroll exceeds R500,000, you must pay 1% of payroll as the Skills Development Levy (SDL). This funds SETA training programmes.

  • 4Set up payroll software

    ⏱ 1 hour

    SimplePay.co.za is free for 1 employee and affordable for more. It calculates PAYE, UIF, and SDL automatically and generates compliant payslips.

    🔗 Try SimplePay.co.za →

  • 5Submit EMP201 monthly on eFiling

    ⏱ Monthly — by 7th

    Every month by the 7th, submit your EMP201 showing PAYE, UIF, and SDL deducted, and pay the amount to SARS. Late payment = 10% penalty.

    ⚠️EMP201 is due by the 7th of every month. Missing it triggers automatic penalties.

  • 6Reconcile at year end (EMP501)

    ⏱ Annual

    At the end of each tax year (February), submit the EMP501 reconciliation on eFiling and issue IRP5 certificates to all employees.

📁

Tracking Expenses

💡 Tracking every expense does two things: it shows you where your money is going, and it reduces your tax bill by letting you claim legitimate deductions.
🏦

Separate bank accounts

ALWAYS keep business and personal spending in separate bank accounts. If you mix them, SARS can disallow your expense claims.

📸

Save every receipt

Take a photo of paper receipts immediately. Store in a Google Drive folder. Organise by month. SARS requires 5 years of records.

📊

Record income and expenses weekly

Even 30 minutes a week is enough. Use Wave (free) to import your bank statement and categorise transactions.

✅

Know what you can deduct

Deductible: business rent, internet, phone (business %), fuel (business trips), equipment, staff, marketing, bank fees, accountant fees. NOT deductible: personal expenses, fines, entertainment without business purpose.

Calculate your profit →
⚙️

Free Business Systems

💡 You don't need expensive software. These free tools handle everything a small South African business needs.
🧾

Invoicing

Wave (free)

Create professional invoices in minutes. Tracks who has paid and who hasn't.

📊

Accounting

Wave (free)

Tracks income, expenses, and produces basic profit/loss reports.

💼

Payroll

SimplePay.co.za

First employee free. Handles PAYE, UIF, payslips automatically.

📁

Document storage

Google Drive (free)

Store all receipts, invoices, and records. 15GB free. Organise by year and month.

📝

Tax filing

SARS eFiling (free)

All SARS filings — VAT, PAYE, income tax — are done here for free.

✍️

Contracts

Google Docs (free)

Always have written agreements with clients. A simple Word document is better than nothing.

⚠️

Important: This platform provides free educational guidance only — not financial, tax, or legal advice. For major financial decisions, always consult a qualified professional.