Balance of remuneration is the amount of an employee's remuneration that remains once the deductions allowed before tax have been taken off. It is the figure PAYE is actually calculated on each period.
What it means
Not all of remuneration is taxed directly each month. Certain amounts - the tax-deductible portion of retirement fund contributions, for instance - come off first to leave the balance of remuneration. Applying the annualised tax tables to that balance, then deducting the rebates and medical tax credits, gives the PAYE for the period.
Where it fits in
It sits between remuneration and the final PAYE figure. The pay run derives it from gross remuneration each period, annualises it to apply SARS's tax tables, then divides the result back to the period and subtracts the rebates and credits.
Key rules
- Remuneration less the amounts deductible before PAYE, such as qualifying retirement contributions.
- The figure the annualised tax tables are applied to.
- Distinct from taxable income, which is the annual assessment concept rather than the monthly PAYE base.
- Rebates and medical tax credits are subtracted after the tables are applied, not from this balance.
