Performance bonuses is are incentives or payments provided by employers to employees based on individual, team, or company-wide achievements and contributions.

Performance bonuses can be in the form of monetary or non-monetary compensation.

Non-monetary bonuses include

• Extra vacation days.
• Professional development opportunities.
• Recognition or gifts.

Monetary performance bonus income 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.

Performance bonus earnings are captured and disclosed under performance bonus pay on our payslip template and subject to normal tax under the SARS Monthly PAYE Tax Deduction Tables.