Independent contractors earn income for the services that they render, and SARS made changes to the Fourth Schedule of the Income Tax Act in 2000 to bring these individuals into the PAYE net if certain criteria are satisfied. To protect the fiscus as far as possible, labour law Independent contractors are not automatically excluded from being employees by tax law.
It is important to note that a labour law independent contractor who is deemed to be an employee for PAYE purposes, is still excluded from UIF by virtue of being independent in terms of labour law, which provides the same principles of the definition of employee for UIF purposes. An individual who is on the payroll as a deemed employee for PAYE purposes, could be excluded from UIF because of his status as a labour law independent contractor.
If you require a consultation to ensure that you are compliant in this regard, please contact [email protected].