At an income of R25,000 per month<\/strong> or R300,000 this year you will spend 41 of your work days<\/strong> working to pay just short of R50,000 in tax.<\/p>\n If you earn R50,000 per month<\/strong> or R600,000 this year you will pay just over R153,000 in tax and it will have taken you 64 of your working days<\/strong>.<\/p>\n “In other words you would have worked until Friday the 31st of March to pay your income tax,” Leonard said.<\/p>\n If you earn a R100,000 per month<\/strong> then you will spend 83 of your 250 working days<\/strong> this year to pay just short of R400,000 (R396,990) in income tax.<\/p>\n The number just keeps increasing Leonard said, with those earning between\u00a0R1.14 million and R4 million only completing their tax days sometime in May.<\/p>\n “People earning more than R4 million in taxable income this year will spend at least 103 of their 250 working days to pay income tax and will have finished working to pay their taxes in the first two weeks of last month.<\/p>\n “By the 14th of June<\/strong> everyone, including those with ultra-high incomes, will have finished working to pay income tax,” he said.<\/p>\n People who earn under the tax threshold of\u00a0R75,750 a year (R6,300 a month) pay no tax and they don\u2019t spend any time working for the government.<\/p>\n Retirement annuities\u00a0<\/b><\/p>\n One of the ways you can reduce the amount of tax working days is by contributing to a retirement annuity (RA), said Leonard<\/p>\n “If, for example, if you earn R50,000 a month, you will have 64 tax working days – but if you put 15% of your taxable income into a retirement fund, like a retirement annuity, then you will reduce your tax days from 64 to 50 tax days. That is a reduction of 14 working days.”<\/p>\n Because this does not\u00a0include weekends, in reality this is closer to a reduction of 3 weeks.<\/p>\n “To put it differently, in this example, contributing 15% to a retirement annuity reduces your tax work days by 22% because you have reduced your income tax by 22%.”<\/p>\n According to Leonard, you are currently able to contribute 27.5% of your taxable income towards a retirement annuity, which is limited to R350,000 for the year.<\/p>\n “This is a great example of where it is valuable to pay yourself first using retirement funds \u2013 as this case shows, if you earn R50,000 a month you could cut the amount of time you spend working for the taxman by a whole month.”<\/p>\n
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