In order to trade as a Real Estate Agent and get paid a commission earning, you need to register as a provisional taxpayer. Based on this you will receive a tax directive (currently 18%), which needs to be renewed annually.
- Registration with SARS
In order to register, you will need to send the following information to your bookkeeper or register with SARS e-filing yourself.
- Your ID.
- Your existing income tax number.
- Your contact details – cell number, address, email, etc.
- What you can claim:
- Training (seminars, conferences NQF costs etc. including accommodation, car hire, flights etc.).
- Examination fees/ fidelity fund certificates.
- Phone & internet costs.
- Accounting fees (tax returns).
- Motor costs – petrol, depreciation, maintenance, insurance.
- Subscription fees – to industry-related publications.
- Bank charges, interest on overdraft etc.
- Purchase of all business-related assets – computers, printers, scanners, cameras etc.
- Personal branding – business cards, brochures, stickers etc.
- Home office ‘rental’.
- Client gifts.
- Client entertainment (limited).
- Research costs (i.e. CMA’s, maps, building plans etc.).
- Office consumables – cleaning materials, coffee, tea etc.
- Managing your expenses
We recommend that you have a good tax consultant and learn how to manage yourself as a business.
- Tax Returns:
It is compulsory as an agent to submit your tax returns regularly. Non-submission of your returns has a serious impact, not only on Golden Homes but also for all your sellers and buyers as SARS will not allow a transfer to register if you have outstanding tax issues.
If you are working as an employee and your company deducts PAYE from your commission then they will provide you with an IRP5 which you can then submit to SARS once you have received it. remember, there are deductions that you are entitled to claim so do your homework before submitting your return or let your appointed bookkeeper do it for you.
If you are operating as an independent contractor then you need to register as a provisional taxpayer. This means you will pay tax three times a year being twice for provisional tax (August and January) and then again for annual tax once SARS has determined your taxable income, less your provisional tax paid. This balance will either be an additional amount payable or it would be a tax refund if you have overpaid provisional tax.
It is advisable to deduct a minimum of 10% from every commission you earn and pay it into some fixed deposit call account so that you have it available when tax season is upon you otherwise you could end up owing SARS and then not having the income to pay for it.
Remember, you are your own business and all businesses need to run a good set of books and pay their tax.
It is expedient for you to have a simple money management account where you manage your financial life and keep track of your income and expenditure. A good, simple App is available from Old Mutual called 22seven. This is very basic and does allow you to split your payments into different packages. This App is suitable when you have a bookkeeper managing your monthly accounts and you only want to keep an eye on where your money is going.
Microsoft Money Plus for Home and Business is another option that offers a more detailed money management system. I would recommend this if you are managing your own bookkeeping and tax affairs.
There are many other App’s and accounting packages available and I suggest you look into whatever suits you.
NEVER, NEVER, NEVER, mess with SARS! Pay your taxes on time.