SARS Interpretation Note 35 and SARS Interpretation Note 17 give guidance on the tests to be passed to distinguish between an independent contractor and an employee and in which circumstances employees tax (PAYE) should be deducted.
IN17 contains a flow chart illustrating the decision making process. In summary, the tests are as follows:
| Question | Deduct Employee’s Tax (PAYE)? |
| Is the person a labour broker or are they remunerated by a labour broker? | Yes |
| Is the person a personal service provider? | Yes |
Does the person meet all of the below criteria (if the answer is no to any of these questions then PAYE needs to be deducted)?
|
No |