South African payslips and IRP5 certificates don't describe income and deductions in words; they use four-digit SARS source codes instead. Learning what one specific code means helps with one specific line item. Understanding the five categories those codes fall into is what actually explains why your payslip is taxed the way it is, because the category, not the topic, is what determines the tax treatment.
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Five categories cover every code on the site: Income, Allowance, Fringe Benefit, Lump Sum and Deduction. Each section below explains what defines that category and how it changes your tax, then lists every individual code that belongs to it.
Income Codes (3600 series)10 codes
Income codes record money paid to you as remuneration: your basic salary, a bonus, commission, overtime, director's fees or contractor income. Every income code adds its full rand value straight to your gross taxable income; there's no partial exemption or special formula the way there is for allowances or fringe benefits. If a number appears under an income code, PAYE was calculated on all of it, not part of it.
Allowance Codes (3700 series)7 codes
An allowance is cash paid on top of salary for a specific purpose, and each one is taxed according to its own rules rather than a single blanket treatment. A travel or subsistence allowance is only partly exempt, and only when you meet specific conditions and keep records; a computer or cell phone allowance is fully taxable with no exemption at all. The code tells you which rule set applies before you can work out the real tax impact.
Fringe Benefit Codes (3800 series)9 codes
A fringe benefit is a non-cash perk your employer provides instead of paying you more: a company car, subsidised accommodation, a discounted loan or a contribution to your pension or medical aid. You never receive these as cash, but SARS still deems them income and taxes their calculated value under the Seventh Schedule. Each fringe benefit code uses its own valuation formula, so the taxable amount is rarely just what the benefit would cost you to buy yourself.
Lump Sum Codes (3900 series)2 codes
Only two codes make up this entire category, and both cover a single, once-off payment rather than a monthly or annual pattern: a retrenchment severance benefit or a lump sum withdrawal from a retirement fund. Both are taxed using their own special lump sum tax table instead of the ordinary PAYE brackets, which exists precisely so a large once-off payment isn't taxed as if it were a permanent jump in your annual salary.
Deduction Codes (4000 series)13 codes
Deduction is the largest and most varied category: codes for money taken off your pay (pension, provident fund, retirement annuity, medical aid, UIF), the PAYE itself, and even amounts your employer contributes on their own account that never touch your payslip as cash but are still reported here (the Skills Development Levy, employer provident and medical contributions). Some deduction codes reduce your taxable income directly; others, like the medical aid tax credit, don't touch taxable income at all; they're a fixed rand amount subtracted straight from the tax you owe.
Check the first two digits of any four-digit code. 36 is income, 37 is an allowance, 38 is a fringe benefit, 39 is a lump sum, and 40, 41, 44 or 45 is a deduction. That alone tells you which set of tax rules applies before you've even looked up the specific code.
Frequently Asked Questions
Why does SARS group payslip codes into categories instead of one flat list?
Because the category determines the tax treatment, not just the topic. An income code adds its full value to taxable income; an allowance code might only be partly taxable; a fringe benefit code uses its own valuation formula; a lump sum code is taxed on a completely separate table from ordinary PAYE; and a deduction code either reduces taxable income or generates a credit instead. Grouping by category is really grouping by which set of tax rules applies.
What's the practical difference between an allowance code and a fringe benefit code?
An allowance (3700 series) is cash paid to you on top of salary for a specific purpose, such as travel or subsistence, and some allowances are only partly taxable if you meet conditions and keep records. A fringe benefit (3800 series) is a non-cash perk, such as a company car or subsidised housing, that you never receive as money but that SARS still deems income at a calculated value under the Seventh Schedule. One is cash with conditions attached; the other is a benefit with a value attached.
Are lump sum codes taxed the same as normal monthly income?
No. Both codes in the lump sum series (3901 for a retrenchment severance benefit, 3920 for a retirement fund lump sum withdrawal) use a special lump sum tax table instead of the ordinary PAYE brackets. This exists specifically so that a large once-off payment isn't taxed as if it were a huge increase to your regular annual salary, which would push much more of it into a higher tax bracket than the law intends.
Do all deduction codes reduce how much tax I pay?
No. Some deduction codes, such as pension, provident fund and retirement annuity contributions, reduce your taxable income directly. Others, such as the medical aid tax credit (code 4116), don't touch taxable income at all; they're a fixed rand amount subtracted straight from the tax you owe. UIF (code 4101) reduces neither; it's reported for compliance but isn't deductible.
Why do some deduction codes never appear as a cash deduction on my own payslip?
A handful of codes in the deduction series record amounts your employer contributes or pays on your behalf, not money taken from your pay. The Skills Development Levy (4115) is paid entirely by the employer, and employer provident or medical fund contributions (4473, 4474) are reported here even though they never reduce your take-home pay directly.
How do I find out which category my own payslip code falls under?
Check the first two digits. 36 is income, 37 is an allowance, 38 is a fringe benefit, 39 is a lump sum, and 40, 41, 44 or 45 is a deduction. From there, use the category sections on this page, or PayTools' full payslip code directory, to find the exact explainer for your specific four-digit code.