Apply non‑executive director tax statuses

Create a new tax record when an employee becomes a non‑executive director. Sage 300 People applies the correct tax, Unemployment Insurance Fund, and Skills Development Levy rules based on the selected tax status. Adjust historical income if the change applies to an earlier period.

Create a new tax record

1. From the Navigation pane, expand Employee Management.
2. Double‑click Employees.
3. Select Employee details.
4. Select Tax definition.
5. Select New.
6. Select Close the active tax record and create a new active tax record.
7. Select the Start date when the employee becomes a non‑executive director.

Select the non‑executive director tax status

1. Select the applicable Non‑executive director tax status.
2. 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.