Is director's remuneration subject to PAYE in South Africa?

Yes — all director's remuneration is subject to PAYE, including fees paid to non-executive directors. Prior to March 2016, non-executive director fees were sometimes treated as independent contractor income and subject to VAT rather than PAYE. The law changed in 2016: all director remuneration, whether for executive or non-executive directors, is now taxed under the PAYE system. Companies must deduct PAYE and pay it to SARS by the 7th of the following month.

Do non-executive directors get code 3615 on their IRP5?

Yes. Since 1 March 2016, non-executive director fees are subject to PAYE just like executive director remuneration. Before 2016, non-executive directors were often treated as independent contractors — VAT-registered and invoicing the company. The law change means companies must now deduct PAYE from non-executive director fees and issue an IRP5 showing code 3615. Non-executive directors who were previously VAT-registered for their director fees needed to deregister for VAT and update their arrangements.

Can a director defer remuneration to reduce PAYE?

No. SARS's timing rules prevent directors from deferring remuneration to shift tax liability across tax years. PAYE is triggered on the earlier of payment, due date, or the date remuneration is declared payable in the company's records. Attempting to delay payment to defer PAYE is non-compliant and may attract SARS penalties. Directors should work with a registered tax practitioner to structure their remuneration lawfully.

What is Code 3615 on a South African Payslip?

Q: What does code 3615 mean on my IRP5?

Code 3615 is director's remuneration — fees, salaries, bonuses, or other amounts paid to you as a director of a company. It is fully taxable income subject to PAYE, and appears separately from regular salary (code 3601) on your IRP5. SARS keeps director remuneration under its own code to enable correct PAYE timing rules and to identify director income during assessment.

Q: What is the difference between code 3601 and code 3615?

Code 3601 is regular employment income — your monthly salary as an employee. Code 3615 is remuneration received specifically in your capacity as a company director. A director who also receives a monthly salary will typically have both codes on their IRP5: 3601 for the employment salary and 3615 for director fees or bonuses paid separately. Both are taxable at the same SARS progressive rates, but SARS tracks them separately for reporting and timing purposes.

Director's remuneration explained — how PAYE applies to both executive and non-executive directors, SARS timing rules, and what code 3615 means on your IRP5.

Quick Answer

3615Code 3615 is director's remuneration — fees, bonuses, or other amounts paid to company directors, both executive and non-executive. It is fully taxable income subject to PAYE. It appears separately from regular salary (code 3601) on your IRP5 because SARS applies specific timing rules to director remuneration.

Payslip Codes By Faheema Sheikh Published: June 2026 · Updated: June 2026

What Code 3615 Means

Code 3615 records remuneration received in your capacity as a director of a company. This includes director fees, sitting fees, annual director bonuses, and any other amounts paid specifically to you as a director — as opposed to your employment salary if you also work as an executive in the business.

SARS uses a separate code for director remuneration because different timing rules apply compared to regular employment income (code 3601). For regular employees, PAYE becomes due when the salary is paid. For directors, PAYE is triggered on the earlier of payment, the date remuneration becomes due, or the date it is declared in the company's records — preventing directors from deferring remuneration to postpone tax liability.

Code 3615 applies to both types of directors:

Executive directors — directors who also work full-time in the company and may receive a salary (code 3601) plus separate director fees (code 3615)
Non-executive directors — directors who serve on the board but are not employees; since 1 March 2016, their fees are subject to PAYE and reported under code 3615

Code 3601 vs Code 3615 — The Core Difference

Regular Salary

3601

Monthly employment income earned as an employee under an employment contract. PAYE due when paid.

Director Remuneration

3615

Fees and pay received in your capacity as a company director. PAYE due on the earlier of payment, due date, or declaration.

How It Affects Your Take-Home Pay

Director remuneration under code 3615 is taxed at the same SARS progressive rates as regular income — there is no preferential rate. Your company deducts PAYE before paying you the net amount, at your applicable marginal rate based on your total projected annual income. If you also receive a salary (code 3601), both are combined for PAYE purposes.

Item	Amount
Monthly salary as executive (code 3601)	R80,000
Quarterly director fee (code 3615)	R30,000
Projected annual income (salary R80k × 12)	R960,000
Marginal tax rate	41%
PAYE deducted on R30,000 director fee	≈ R12,300
Net director fee received	≈ R17,700

Use our PAYE Calculator to estimate the net take-home on any director remuneration amount at your income level.

The 2016 Change — Non-Executive Directors and PAYE

Before 1 March 2016, non-executive directors in South Africa were typically treated as independent contractors. They would issue invoices to the company, charge VAT, and declare their fees as business income on their personal or company tax returns. PAYE was not applied.

The Taxation Laws Amendment Act 25 of 2015 changed this: from 1 March 2016, all director remuneration — including fees paid to non-executive directors — falls under the PAYE system. Companies must deduct PAYE and issue an IRP5 (or IT3(a)) with code 3615.

Non-Executive Directors — What Changed

If you served as a non-executive director before 2016 and invoiced the company as a VAT vendor, you needed to deregister for VAT in respect of those director fees after the 2016 change. If you continued invoicing and charging VAT after March 2016, discuss your position with a registered tax practitioner — SARS may raise an assessment.

Frequently Asked Questions

What does code 3615 mean on my IRP5?

Code 3615 is director's remuneration — fees, sitting fees, bonuses, or other amounts received in your capacity as a company director. It is fully taxable income, separate from your employment salary (code 3601). Your company deducts PAYE before paying you, and the gross amount appears as code 3615 on your annual IRP5 certificate.

Is director's remuneration subject to PAYE?

Yes — all director remuneration in South Africa is subject to PAYE, including fees paid to non-executive directors. Since 1 March 2016, the distinction between executive and non-executive directors for PAYE purposes was removed. The company must deduct PAYE from all director fees and pay it to SARS by the 7th of the following month.

What is the difference between code 3601 and code 3615?

Code 3601 is regular employment salary received under an employment contract. Code 3615 is remuneration received specifically in your capacity as a director. An executive director who receives both a salary and a separate director fee will have both codes on their IRP5. Both are taxed at the same progressive SARS rates, but SARS tracks them separately for timing and compliance purposes.

When does PAYE on code 3615 become due?

PAYE on director remuneration is triggered on the earlier of: the date the amount is actually paid, the date it becomes due and payable, or the date it is declared as payable in the company's financial records. This prevents directors from deferring remuneration to the next tax year. The company must pay the PAYE to SARS by the 7th of the month following the trigger date.

Can a director avoid PAYE by deferring payment?

No. SARS's timing rules are specifically designed to prevent this. PAYE becomes due on the earlier of payment, due date, or declaration in the company's records — whichever comes first. Attempting to defer remuneration beyond the due date does not defer the PAYE obligation. Speak to a registered tax practitioner about compliant director remuneration structuring.

What if I was a non-executive director invoicing as a VAT vendor after March 2016?

If you continued treating your director fees as independent contractor income and charging VAT after 1 March 2016, you were likely non-compliant. The company should have been deducting PAYE instead of paying your gross invoice. Both you and the company may face SARS assessments. Consult a registered tax practitioner to regularise your position and determine whether voluntary disclosure would be appropriate.

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