Print Page   |   Report Abuse
News & Press: Technical & tax law questions

How does SARS tax the income received by a medically boarded individual?

09 April 2015   (0 Comments)
Posted by: Author: SAIT Technical
Share |

Author: SAIT Technical

Q: An employee has been medically boarded and will, as a result, receive income from the employer. How is this taxed?

A: In our view such an amount will be taxed as a "severance benefit" as defined in section 1 ITA and the tax rate schedule applicable to severance amounts will apply. As this is a para d(i) of the ‘gross income’ amount the employer must request a directive from SARS per para 9(3) of the Fourth Schedule. The amount is then disclosed under IRP5 code 3901 and the tax withheld if any under code 4115.

For more information refer to para 14.5 of SARS' Employers Guide 2015.

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.


Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

Membership Management Software Powered by®  ::  Legal