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Commission

SimplePay has built-in system items to accommodate the special tax and reporting requirements for commission. Commission is reported under Code 3606 on the IRP5/IT3(a). However, for efficiency when processing payroll, you can opt to add commission to the payslip based on whether it is received regularly or irregularly.

Regular Commission

When an employee receives commission on a regular basis:

  1. Go to Employees, and select the relevant employee.
  2. Click on Add next to Regular Inputs.
  3. Click on Commission under Income.
  4. Click Save.

Commission will appear under Regular Inputs automatically on each payslip. To edit the amount of the commission for the month:

  1. Click on Commission under Payslip Inputs.
  2. Enter the total amount that has to be paid in the relevant period.
  3. Click Save.

Once-Off Commission

When an employee receives commission on an irregular basis:

  1. Go to Employees, and select the relevant employee.
  2. Click on Add next to Payslip Inputs.
  3. Click on Once-Off Commission under Income.
  4. Enter an amount.
  5. Click Save.

Once-Off Commission will appear under Payslip Inputs for this payslip only.

Tax treatment

Even if you pay commission as a once-off amount, SARS treats it as remuneration. That means it’s subject to PAYE and treated as Regular Income, because it’s paid in respect of services the employee has performed.

According to the SARS Guide for Employers in Respect of Employees’ Tax, if there is no applicable tax directive, the employer must combine salary and commission and deduct employees’ tax using the applicable tax deduction tables.