Create a new tax record
- From the Navigation pane, expand Employee Management.
- Double‑click Employees.
- Select Employee details.
- Select Tax definition.
- Select New.
- Select Close the active tax record and create a new active tax record.
- Select the Start date when the employee becomes a non‑executive director.
Select the non‑executive director tax status
- Select the applicable Non‑executive director tax status.
- Select Save.
Understand Unemployment Insurance Fund rules
- Non‑executive directors don't contribute to the Unemployment Insurance Fund
- The system links these employees to the Independent Contractor UIF status
Understand Skills Development Levy rules
The Skills Development Levy doesn't apply to employees linked to these tax statuses:
- Resident non‑executive director – No tax
- Non‑resident non‑executive director – Statutory tables
- Non‑resident non‑executive director – Temporary or part‑time
- Non‑resident non‑executive director – Directive percent
Confirm Employment Tax Incentive eligibility
- Non‑executive directors aren't eligible for the Employment Tax Incentive
Adjust historical income if required
Income previously reported under 3601 or 3651 is reported as:
- 3620 or 3670 for the Resident non‑executive director – No tax status
- 3621 or 3671 for these tax statuses:
- Non‑resident non‑executive director – Statutory tables
- Non‑resident non‑executive director – Temporary or part‑time
- Non‑resident non‑executive director – Directive percent
Sage 300 People automatically updates the correct IRP5 code when you change to a non‑executive director tax status.
SARS guidance confirms that resident director fees must use IRP5 code 3620, and travel reimbursements must use 3702 or 3703, where applicable.