New Tax Law set to Affect Waiters and Bar Staff in South Africa


The South African restaurant industry is highly competitive and continually growing. With various new entrants into the market as well as numerous franchises, restaurant owners are competing to gain the biggest slice of the market.

With growth comes the need to have adequately-staffed restaurants. Trends in the South African market indicate that most of the waiters and bar staff jobs are held by foreign nationals.  There are also various South Africans who make a living this way. With various regulatory changes affecting the industry in recent years, the industry has come to offer workers more protection.

2017 is no different, as more changes are taking place, with a new tax law set to affect waiters and bar staff in South Africa.

According to Business Tech, “to provide equality and broaden the tax base more equitably, a new law may be introduced to deem all voluntary or other payments paid by customers for services rendered, as paid by the employer”.

Patricia Williams, a tax practitioner at a law firm says:

“Waiters should be paying income tax on these amounts, but because ‘tips’ are paid by the restaurant’s customers and not the restaurant itself, the waiters are supposed to submit an income tax return and declare and pay the relevant taxes themselves, instead of having employees’ tax deducted as the amounts are earned.”

Normal salaried employees earning over R75 000 per year are subject to employees’ tax whereas waiters who earn the same amount ordinarily escape employees’ tax on a technicality.

The expert says that “with a small amount of extra effort, even cash receipts could be included in the reporting of tips”.

Tipping at restaurants was historically a token payment, designed to ensure promptness. Another reason tipping was created was because of the economic nature of restaurants and bars, which are unique high-risk and high-reward businesses.

With this new tax law set to affect waiters and bar staff in South Africa, these workers will be expected to declare amounts earned through tips as part of their taxable income to SARS.



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