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TAX1501: Taxation of Salaried Persons
OCT/NOV Examination 2026 Preparation Guide
Covering Past Papers: 2023 – 2025
⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆
South African Income Tax · Salaried Persons
Exam Revision Guide
TAX1501
Module Code:
Taxation of Salaried Persons
Module Name:
Oct/Nov 2023, Oct/Nov 2024, Oct/Nov
Papers Covered:
2025
OCT/NOV 2026 Examinations
Prepared For:
100 marks per paper
Total Marks:
2 hours per exam
Duration:
All calculations use current SARS tax tables. Understand the logic behind each com-
putation — do not just memorise numbers.
Exam Revision Notes | TAX1501 | OCT/NOV 2026
,TAX1501 | Exam Revision OCT/NOV Exams 2023–2025
Quick Reference: SARS Tax Tables and Rates
2025 Year of Assessment (1 March 2024 – 28 February 2025)
Table 1: Normal Tax: Rates of Tax for Individuals (2025)
Taxable Income (R) Rates of Tax
1 – 237 100 18% of taxable income
237 101 – 370 500 R42 678 + 26% of amount above R237 100
370 501 – 512 800 R77 362 + 31% of amount above R370 500
512 801 – 673 000 R121 475 + 36% of amount above R512 800
673 001 – 857 900 R179 147 + 39% of amount above R673 000
857 901 – 1 817 000 R251 258 + 41% of amount above R857 900
1 817 001 and above R644 489 + 45% of amount above R1 817 000
Table 2: Tax Rebates and Thresholds (2025)
Rebate 2025 (R) 2024 (R)
Primary (all taxpayers) 17 235 17 235
Secondary (age 65+) 9 444 9 444
Tertiary (age 75+) 3 145 3 145
Tax Threshold 2025 (R) 2024 (R)
Under 65 95 750 95 750
Age 65 – 74 148 217 148 217
Age 75 and over 165 689 165 689
Table 3: Medical Scheme Fees Tax Credit (MTC) – Monthly Amounts
Beneficiary 2025 (R/month) 2024 (R/month)
Taxpayer (member) 364 364
First dependant 364 364
Each additional dependant 246 246
Page 2 of 21
,TAX1501 | Exam Revision OCT/NOV Exams 2023–2025
Table 4: Other Key Rates and Limits (2025)
Item Amount
VAT rate 15% (15.5% from 1 May 2025)
Interest exemption (under 65) R23 800
Interest exemption (65 and over) R34 500
Annual capital gains exclusion (individ- R40 000
ual)
Annual capital gains exclusion (death) R300 000
Primary residence exclusion R2 000 000
Pension fund deduction limit 27.5% of greater of remuneration or taxable income;
capped at R350 000
Official interest rate (fringe benefit 8.25% (verify exam appendix)
loans)
Inclusion rate (capital gains – individu- 40%
als)
PAPER 1: OCT/NOV 2025 EXAMINATION
Question 1 — Multiple Choice Questions [30 marks]
Question: Answer ALL of the following multiple choice questions. Each question carries
2 marks. Choose the MOST CORRECT answer.
Questions and Answers:
(1.1) [2 marks]
Question: Which of the following is the CORRECT definition of “gross income” for a
South African resident in terms of the Income Tax Act?
Answer: The correct answer is: The total amount, in cash or otherwise, received by
or accrued to or in favour of a resident, excluding receipts and accruals of a capi-
tal nature, during the year of assessment.
Key Concept
Gross income (s1 of the ITA) = Total amount (cash or otherwise) + received by
OR accrued to + a resident + during the year of assessment + excluding amounts of a
capital nature.
Key cases: CIR v Delfos (1933) — established “received by” means received on behalf of
oneself. Lategan v CIR (1926) — “accrued to” means the taxpayer becomes entitled to
Page 3 of 21
,TAX1501 | Exam Revision OCT/NOV Exams 2023–2025
it, even if not yet paid.
(1.2) [2 marks]
Question: Thabo is 28 years old and employed. He is a member of a registered medical
aid fund with two dependants. What is the total monthly Medical Scheme Fees Tax Credit
(MTC) for the 2025 year of assessment?
a. R364
b. R728
c. R974
d. R1 220
Answer: Option (c) R974
Taxpayer (member): R364
First dependant: R364
Second dependant: R246
Total monthly MTC = R364 + R364 + R246 = R974
Exam Tip
The first dependant gets R364 (same as the member). From the second dependant
onwards, each gets R246. Read the question carefully — it says “two dependants”, so
there is the member (R364) + first dependant (R364) + second dependant (R246).
(1.3) [2 marks]
Question: Nokwanda received the following amounts during the 2025 year of assessment:
salary R180 000; lottery winnings R50 000; a donation from her parents R20 000; pro-
ceeds from selling her personal motor vehicle R85 000 (original cost R120 000). Which
amount(s) form part of her gross income?
Answer: Only the salary of R180 000 forms part of gross income.
• Salary R180 000 — included: it is income in nature, received in return for services ren-
Page 4 of 21
,TAX1501 | Exam Revision OCT/NOV Exams 2023–2025
dered.
• Lottery winnings R50 000 — excluded: gambling/lottery winnings are not income
(they arise from chance, not from services or trading). Winnings from lotteries are specifi-
cally exempt under s10(1)(cA).
• Donation from parents R20 000 — excluded: voluntary payments with no quid pro
quo are not “received in return” for anything and are not income in nature.
• Motor vehicle proceeds R85 000 — excluded: the proceeds are of a capital nature
(selling a personal asset). A loss of R35 000 occurs but falls under CGT, not gross income.
(1.4) [2 marks]
Question: Sipho Dlamini is employed by BuildSmart (Pty) Ltd and has the right to use
a company-owned, unfurnished townhouse with six bedrooms. Sipho is responsible for pay-
ing water and electricity. He moved in on 1 March 2024. Sipho’s remuneration for the
previous year was R295 000. What is the cash equivalent fringe benefit for the 2025 year
of assessment?
Answer: R20 826
Key Concept
Residential accommodation formula (para 9 of 7th Schedule):
(A − B) × C × D
Cash equivalent =
100
Where:
• A = rental value % (based on remuneration and number of bedrooms) from the
formula table
• B = rental paid by employee (R nil here — employer pays all)
• C = remuneration proxy (previous year’s remuneration)
• D = number of months used
For remuneration R295 000 and 6 bedrooms (use SARS table: rental value = 17% for 6+ bed-
rooms at this income level):
(17 − 0) × 295 000 × 12 17 × 295 000
= = = R50 150 ÷ 12 × 12 = R50 150
100 × 12 100
Page 5 of 21
, TAX1501 | Exam Revision OCT/NOV Exams 2023–2025
Watch Out
The formula uses previous year’s remuneration (not current year). Sipho pays his
own utilities so B = 0. Always check the number of bedrooms against the SARS table
provided in the exam appendix. Apply the formula exactly as shown.
(1.5) [2 marks]
Question: Dornan received a low-interest loan of R200 000 from his employer on 1
March 2024. The employer charged interest at 4% per annum. The official interest rate is
8.25% per annum. What is the taxable fringe benefit for the 2025 year of assessment?
Answer: R8 500
Taxable fringe benefit = (Official rate − Charged rate) × Loan amount
= (8.25% − 4%) × R200 000 = 4.25% × R200 000 = R8 500
(1.6) [2 marks]
Question: Which of the following is NOT a fringe benefit as listed in the 7th Schedule to
the Income Tax Act?
a. Use of a motor vehicle
b. Medical aid contributions paid by the employer
c. Reimbursement of business kilometres travelled
d. Residential accommodation
Answer: Option (c) Reimbursement of business kilometres travelled
A reimbursement of actual business travel is not a fringe benefit — it is a reimbursement of a
business expense and is generally not taxable (it’s deducted from the travel allowance calcula-
tion). Fringe benefits arise from private benefits, not business use reimbursements.
Page 6 of 21
]]
TAX1501: Taxation of Salaried Persons
OCT/NOV Examination 2026 Preparation Guide
Covering Past Papers: 2023 – 2025
⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆
South African Income Tax · Salaried Persons
Exam Revision Guide
TAX1501
Module Code:
Taxation of Salaried Persons
Module Name:
Oct/Nov 2023, Oct/Nov 2024, Oct/Nov
Papers Covered:
2025
OCT/NOV 2026 Examinations
Prepared For:
100 marks per paper
Total Marks:
2 hours per exam
Duration:
All calculations use current SARS tax tables. Understand the logic behind each com-
putation — do not just memorise numbers.
Exam Revision Notes | TAX1501 | OCT/NOV 2026
,TAX1501 | Exam Revision OCT/NOV Exams 2023–2025
Quick Reference: SARS Tax Tables and Rates
2025 Year of Assessment (1 March 2024 – 28 February 2025)
Table 1: Normal Tax: Rates of Tax for Individuals (2025)
Taxable Income (R) Rates of Tax
1 – 237 100 18% of taxable income
237 101 – 370 500 R42 678 + 26% of amount above R237 100
370 501 – 512 800 R77 362 + 31% of amount above R370 500
512 801 – 673 000 R121 475 + 36% of amount above R512 800
673 001 – 857 900 R179 147 + 39% of amount above R673 000
857 901 – 1 817 000 R251 258 + 41% of amount above R857 900
1 817 001 and above R644 489 + 45% of amount above R1 817 000
Table 2: Tax Rebates and Thresholds (2025)
Rebate 2025 (R) 2024 (R)
Primary (all taxpayers) 17 235 17 235
Secondary (age 65+) 9 444 9 444
Tertiary (age 75+) 3 145 3 145
Tax Threshold 2025 (R) 2024 (R)
Under 65 95 750 95 750
Age 65 – 74 148 217 148 217
Age 75 and over 165 689 165 689
Table 3: Medical Scheme Fees Tax Credit (MTC) – Monthly Amounts
Beneficiary 2025 (R/month) 2024 (R/month)
Taxpayer (member) 364 364
First dependant 364 364
Each additional dependant 246 246
Page 2 of 21
,TAX1501 | Exam Revision OCT/NOV Exams 2023–2025
Table 4: Other Key Rates and Limits (2025)
Item Amount
VAT rate 15% (15.5% from 1 May 2025)
Interest exemption (under 65) R23 800
Interest exemption (65 and over) R34 500
Annual capital gains exclusion (individ- R40 000
ual)
Annual capital gains exclusion (death) R300 000
Primary residence exclusion R2 000 000
Pension fund deduction limit 27.5% of greater of remuneration or taxable income;
capped at R350 000
Official interest rate (fringe benefit 8.25% (verify exam appendix)
loans)
Inclusion rate (capital gains – individu- 40%
als)
PAPER 1: OCT/NOV 2025 EXAMINATION
Question 1 — Multiple Choice Questions [30 marks]
Question: Answer ALL of the following multiple choice questions. Each question carries
2 marks. Choose the MOST CORRECT answer.
Questions and Answers:
(1.1) [2 marks]
Question: Which of the following is the CORRECT definition of “gross income” for a
South African resident in terms of the Income Tax Act?
Answer: The correct answer is: The total amount, in cash or otherwise, received by
or accrued to or in favour of a resident, excluding receipts and accruals of a capi-
tal nature, during the year of assessment.
Key Concept
Gross income (s1 of the ITA) = Total amount (cash or otherwise) + received by
OR accrued to + a resident + during the year of assessment + excluding amounts of a
capital nature.
Key cases: CIR v Delfos (1933) — established “received by” means received on behalf of
oneself. Lategan v CIR (1926) — “accrued to” means the taxpayer becomes entitled to
Page 3 of 21
,TAX1501 | Exam Revision OCT/NOV Exams 2023–2025
it, even if not yet paid.
(1.2) [2 marks]
Question: Thabo is 28 years old and employed. He is a member of a registered medical
aid fund with two dependants. What is the total monthly Medical Scheme Fees Tax Credit
(MTC) for the 2025 year of assessment?
a. R364
b. R728
c. R974
d. R1 220
Answer: Option (c) R974
Taxpayer (member): R364
First dependant: R364
Second dependant: R246
Total monthly MTC = R364 + R364 + R246 = R974
Exam Tip
The first dependant gets R364 (same as the member). From the second dependant
onwards, each gets R246. Read the question carefully — it says “two dependants”, so
there is the member (R364) + first dependant (R364) + second dependant (R246).
(1.3) [2 marks]
Question: Nokwanda received the following amounts during the 2025 year of assessment:
salary R180 000; lottery winnings R50 000; a donation from her parents R20 000; pro-
ceeds from selling her personal motor vehicle R85 000 (original cost R120 000). Which
amount(s) form part of her gross income?
Answer: Only the salary of R180 000 forms part of gross income.
• Salary R180 000 — included: it is income in nature, received in return for services ren-
Page 4 of 21
,TAX1501 | Exam Revision OCT/NOV Exams 2023–2025
dered.
• Lottery winnings R50 000 — excluded: gambling/lottery winnings are not income
(they arise from chance, not from services or trading). Winnings from lotteries are specifi-
cally exempt under s10(1)(cA).
• Donation from parents R20 000 — excluded: voluntary payments with no quid pro
quo are not “received in return” for anything and are not income in nature.
• Motor vehicle proceeds R85 000 — excluded: the proceeds are of a capital nature
(selling a personal asset). A loss of R35 000 occurs but falls under CGT, not gross income.
(1.4) [2 marks]
Question: Sipho Dlamini is employed by BuildSmart (Pty) Ltd and has the right to use
a company-owned, unfurnished townhouse with six bedrooms. Sipho is responsible for pay-
ing water and electricity. He moved in on 1 March 2024. Sipho’s remuneration for the
previous year was R295 000. What is the cash equivalent fringe benefit for the 2025 year
of assessment?
Answer: R20 826
Key Concept
Residential accommodation formula (para 9 of 7th Schedule):
(A − B) × C × D
Cash equivalent =
100
Where:
• A = rental value % (based on remuneration and number of bedrooms) from the
formula table
• B = rental paid by employee (R nil here — employer pays all)
• C = remuneration proxy (previous year’s remuneration)
• D = number of months used
For remuneration R295 000 and 6 bedrooms (use SARS table: rental value = 17% for 6+ bed-
rooms at this income level):
(17 − 0) × 295 000 × 12 17 × 295 000
= = = R50 150 ÷ 12 × 12 = R50 150
100 × 12 100
Page 5 of 21
, TAX1501 | Exam Revision OCT/NOV Exams 2023–2025
Watch Out
The formula uses previous year’s remuneration (not current year). Sipho pays his
own utilities so B = 0. Always check the number of bedrooms against the SARS table
provided in the exam appendix. Apply the formula exactly as shown.
(1.5) [2 marks]
Question: Dornan received a low-interest loan of R200 000 from his employer on 1
March 2024. The employer charged interest at 4% per annum. The official interest rate is
8.25% per annum. What is the taxable fringe benefit for the 2025 year of assessment?
Answer: R8 500
Taxable fringe benefit = (Official rate − Charged rate) × Loan amount
= (8.25% − 4%) × R200 000 = 4.25% × R200 000 = R8 500
(1.6) [2 marks]
Question: Which of the following is NOT a fringe benefit as listed in the 7th Schedule to
the Income Tax Act?
a. Use of a motor vehicle
b. Medical aid contributions paid by the employer
c. Reimbursement of business kilometres travelled
d. Residential accommodation
Answer: Option (c) Reimbursement of business kilometres travelled
A reimbursement of actual business travel is not a fringe benefit — it is a reimbursement of a
business expense and is generally not taxable (it’s deducted from the travel allowance calcula-
tion). Fringe benefits arise from private benefits, not business use reimbursements.
Page 6 of 21
