7B. Timing of accrual and incurral of variable remuneration
(1) For the purposes of this section-
Category: Section 7B (ITA) – Timing of accrual and incurral of variable remuneration
Section 7B
Section 7B inserted by section 8 of Act 22 of 2012 effective on 1 March 2013.
“Employee” definition of section 7B of ITA
“employee” means an employee as defined in paragraph 1 of the Fourth Schedule;
“Employer” definition of section 7B of ITA
“Variable remuneration” definition of section 7B of ITA
“variable remuneration” means-
(a) overtime pay, bonus or commission contemplated in the definition of “remuneration” in paragraph 1 of the Fourth Schedule;
(b) an allowance or advance paid in respect of transport expenses as contemplated in section 8(1)(b)(ii) or (iii);
[Paragraph (b) substituted by section 3(1)(a) of Act 34 of 2019 effective on 1 March, 2020 and applicable in respect of amounts accrued or expenditure incurred on or after that date]
(c) any amount which an employer has during any year of assessment become liable to pay to an employee in consequence of the employee having during such year become entitled to any period of leave which had not been taken by the employee during that year.
(d) any night shift allowance;
[Paragraph (d) added by section 3(1)(b) of Act 34 of 2019 effective on 1 March, 2020 and applicable in respect of amounts accrued or expenditure incurred on or after that date]
(e) any standby allowance;
[Paragraph (e) added by section 3(1)(b) of Act 34 of 2019 and substituted by section 2(1)(a) of Act 20 of 2022 with effect from 1 March, 2023 and applicable in respect of amounts accrued or expenditure incurred on or after that date]
(f) any amount paid or granted in reimbursement of any expenditure as contemplated in section 8(1)(a)(ii); or
[Paragraph (f) added by section 3(1)(b) of Act 34 of 2019 and substituted by section 2(1)(a) of Act 20 of 2022 with effect from 1 March, 2023 and applicable in respect of amounts accrued or expenditure incurred on or after that date]
(g) any amount of “remuneration” as defined in paragraph 1 of the Fourth Schedule (other than a bonus) that is determined based on the employee’s work performance.
[Paragraph (g) added by section 2(1)(b) of Act 20 of 2022 with effect from 1 March, 2023 and applicable in respect of amounts accrued or expenditure incurred on or after that date]
Subsection 2 of section 7B of ITA
(2) In determining the taxable income derived by any person during a year of assessment, any amount to which an employee becomes entitled from an employer in respect of variable remuneration is deemed to-
(a) accrue to the employee; and
(b) constitute expenditure incurred by the employer,
on the date during the year of assessment on which the amount is paid to the employee by the employer: Provided that where the employee is deceased before the date of payment, the amount is deemed to accrue to the employee and constitutes expenditure incurred by the employer, on the day during the year of assessment prior to the date of the employee’s death.
[Section 7B inserted by section 8(1) of Act 22 of 2012 with effect from 1 March, 2013 and applicable in respect of amounts accrued or expenditure incurred on or after that date. Subsection (2) amended by section 2(1)(c) of Act 20 of 2022 with effect from 1 March, 2023 and applicable in respect of amounts accrued or expenditure incurred on or after that date]