Overtime refers to the hours an employee works in excess of their regular 40-hour work week.

It’s often paid at a standard rate of 1.5 times the standard hourly rate.

Overtime pay is taxed at the same rate as basic pay, according to the standard PAYE Monthly Tax Deduction Tables from the South African Revenue Service (SARS).

There will, however, be a different code on the IRP5 Tax Certificate just to let SARS know what the employee income received was for.

The overtime pay is captured and disclosed under taxable earnings on our payslip template and subject to normal tax under the SARS Monthly PAYE Tax Deduction Tables.