Nature of person codes are the single-letter codes SARS uses to classify each income recipient on a payroll. The code records what kind of person or entity is being paid, which in turn drives how their income is taxed.
What it means
The full set spans natural persons and various entities: A is a natural person with a South African ID, C a director or member of a close corporation, M an asylum seeker, R a refugee, N a retirement fund lump sum, and D, E, F, G and H cover trusts, companies, partnerships, corporations and personal service providers. Choosing the right code is what tells payroll and SARS which tax treatment applies.
Where it fits in
The nature of person code sits at the heart of an employee's tax setup and determines whether standard PAYE, a directive, the PSP rates or another treatment is used. It is one of several unrelated code systems in payroll, distinct from IRP5 source codes, SIC codes and the internal employee code.
Key rules
- SARS letter codes classifying the income recipient (A, C, D, E, F, G, H, M, N, R).
- Determine the tax treatment that applies to the person.
- A is a natural person; C a director or CC member; M asylum seeker; R refugee.
- One of several unrelated payroll code systems - not the same as a source or SIC code.
