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Is PAYE deductible on commission paid by one company to another?

09 March 2015   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: Is 25% PAYE deductible on commission paid to a company?

Company A is appointed by company B (no formal agency agreement). The business arrangement is that company B will facilitate the sale of software supplied by company A. Company B will invoice company A for commission earned on the sale.

Is company A obliged to deduct PAYE of 25% from the amount of commission invoiced by company B?

The only references I can find refer to an individual earning commission. I would think that as this is revenue earned by a company, no PAYE would be deducted and income tax would be payable on the profit declared at the end of the profit posted.

A: Consider whether the company is a "personal service provider” as defined in the 4th Schedule to the Income Tax Act. If not, then the revenue will form part of the normal revenue stream of the company and employees’ taxes need not be deducted at source.

Disclaimer: Nothing in this query and answer should be construed as constituting tax advice or a tax opinion. An expert should be consulted for advice based on the facts and circumstances of each transaction/case. Even though great care has been taken to ensure the accuracy of the answer, SAIT do not accept any responsibility for consequences of decisions taken based on this query and answer. It remains your own responsibility to consult the relevant primary resources when taking a decision.


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