Accounting & Tax FAQ for South African SMEs

This accounting FAQ covers the most common questions we receive from SMEs across South Africa on accounting, tax, SARS submissions, payroll and cloud accounting. Browse the questions below or contact our Durban-based CA(SA) team directly.

General Accounting Questions

When does a business need to register for VAT in South Africa?

ou must register for VAT when your taxable turnover exceeds R2.3 million in any 12-month period. You may also voluntarily register if your turnover exceeds R120,000. Late registration carries penalties from SARS, so it’s important to monitor your turnover carefully. We help businesses assess their VAT position and manage the registration process.

What is the difference between a bookkeeper and a chartered accountant?

A bookkeeper records day-to-day financial transactions, while a Chartered Accountant CA(SA) is a qualified professional who can provide financial statements, tax advice, auditing, and strategic business guidance. For most SMEs, having a CA(SA) manage your finances ensures full SARS compliance and gives you access to higher-level financial insight.

How often must I submit financial statements to SARS?

Most businesses submit annual financial statements and tax returns. However, VAT returns are submitted either monthly or bi-monthly depending on your VAT category, and PAYE must be submitted monthly. Our team manages all submission deadlines on behalf of our clients so nothing is missed.

What financial records must I keep for SARS?

SARS requires you to keep all financial records for a minimum of five years. This includes invoices, receipts, bank statements, payroll records, VAT returns, and any supporting documentation for deductions claimed. We recommend cloud-based accounting software like Xero to keep your records organised and audit-ready.

Tax & SARS Questions

What is provisional tax and who must pay it?

Provisional tax is a method of paying income tax in advance, based on estimated taxable income. Any person or business that earns income other than a salary is generally required to pay provisional tax. Payments are due twice a year — in August and February — with a top-up payment due after year-end assessment. We calculate and submit provisional tax returns for all our clients.

What are the penalties for late tax submissions in South Africa?

SARS imposes administrative penalties for late submission of tax returns, which can range from R250 to R16,000 per month depending on your taxable income. Interest is also charged on late payments. We proactively manage all deadlines to ensure our clients never face unnecessary penalties.

Can I deduct home office expenses from my tax?

Yes, if you work from home and have a dedicated area used exclusively for business, you may be able to claim a portion of your home expenses as a tax deduction. The deductible amount is calculated as a percentage of the total floor area used for business. We advise clients on what qualifies and ensure claims are correctly structured for SARS.

Payroll & PAYE Questions

When must PAYE be submitted to SARS?

PAYE must be submitted to SARS by the 7th of each month following the payroll run. Employers must also submit an EMP501 reconciliation twice a year — in October and April. Late submission results in penalties and interest. Our payroll team handles all PAYE calculations, submissions, and reconciliations on behalf of our clients.

What happens if I pay an employee incorrectly?

Incorrect payroll can result in over or underpayment of employees, incorrect PAYE submissions, and potential SARS penalties. It can also create legal risk under South African labour law. We manage payroll for businesses of all sizes, ensuring every employee is paid correctly and all statutory deductions are handled accurately.

Cloud Accounting & Technology

Do I still need an accountant if I use Xero or Sage?

Yes. While cloud accounting software like Xero and Sage makes bookkeeping much easier, it does not replace the expertise of a qualified accountant. Software captures transactions but a CA(SA) interprets the numbers, ensures SARS compliance, identifies tax-saving opportunities, and provides strategic financial guidance. We are Xero certified advisors and work with clients to get the most from their cloud accounting software.

How much does an accountant cost for a small business in South Africa?

Accounting fees vary depending on the size of your business and the services required. We offer transparent monthly packages starting from a fixed fee, covering bookkeeping, VAT submissions, payroll, and annual financial statements. Visit our packages page for full details or contact us for a personalised quote.

Still have questions? Our team of qualified accounting professionals is based in Durban and serves SMEs across KwaZulu-Natal, Gauteng, and South Africa nationally. Contact us today or book a free consultation and we’ll be happy to answer any questions about your specific situation.