Introduction
In this article we are guiding you through tax codes on an IRP5 in a clear and practical way.
What is a Source Code?
It is a four-digit number that shows SARS the type of income, allowance, or deduction on your IRP5.
Each code sits next to the amount it explains. This helps SARS place your figures in the right sections of your return.
Common IRP5 codes
Below, we share the common IRP5 codes used for employees in South Africa.
Regular Pay and Work Income
These codes cover normal earnings for work done.
- 3601 – Income or salary
- 3602 – Non-taxable income
- 3605 – Annual payment (13th cheque or bonus paid yearly)
- 3606 – Commission
- 3607 – Overtime (PAYE)
- 3615 – Director’s remuneration
- 3616 – Independent contractors
- 3617 – Labour brokers
- 3708 – Public office income
How to read this on a payslip:
This section shows what you earned for your time and effort. PAYE is usually deducted here.
Pension, Annuity and Retirement-Related Income
These relate to retirement income or structured payouts.
- 3603 – Pension (PAYE)
- 3604 – Pension (Excl)
- 3610 – RAF annuity (PAYE)
- 3611 – Purchased annuity
- 3612 – Purchased annuity (Excl)
- 4001 – Current pension
- 4002 – Arrear pension
- 4006 – Current RAF
- 4007 – Arrear RAF
- 4026 – NSF pension
How to read this:
These amounts usually come from pension funds, RAF settlements, or annuities. Tax treatment differs based on the type of fund and timing.
Allowances Paid With Salary
Allowances support work-related costs.
- 3701 – Travel allowance
- 3702 – Reimbursive travel > R12,000
- 3703 – Reimbursive travel
- 3704 – Subsistence local
- 3705 – Subsistence allowance
- 3706 – Entertainment allowance
- 3709 – Uniform allowance
- 3710 – Tool allowance
- 3711 – Computer allowance
- 3712 – Phone allowance
- 3713 – Other allowances
- 3714 – Non-taxable allowances
- 3715 – Subsistence foreign
How to read this:
Allowances look like extra pay, yet SARS often applies special rules. Some are taxed in full and some are partly tax-free if rules are met.
Share Schemes and Equity Benefits
These link to company share plans.
- 3707 – Share options
- 3717 – Broad-based employee share plan
- 3718 – Vesting instruments
How to read this:
Tax usually arises when shares vest or options are exercised, not when granted.
Fringe Benefits (Non-Cash Benefits)
These are benefits received instead of cash.
- 3801 – General benefits
- 3802 – Use of car
- 3803 – Use of asset
- 3804 – Meals
- 3805 – Accommodation
- 3806 – Services
- 3807 – Loans or subsidy
- 3808 – Employee debt
- 3810 – Medical aid fringe benefit
- 3816 – Use of motor vehicle by employer
- 3822 – Non-tax fringe benefit immovable
How to read this:
Even without cash paid, SARS treats these as income and adds a value for tax.
Bursaries, Scholarships, and Study Support
- 3809 – Bursary / scholarship
- 3815 – Non-taxable bursary
- 3820 – Bursaries / scholarships
- 3821 – Non-tax bursaries / scholarships
How to read this:
Tax depends on conditions such as service contracts or income limits.
Employer Contributions to Funds
Money paid by the employer on your behalf.
- 3817 – Employer pension contribution
- 3825 – Employer provident fund
- 3828 – Retirement annuity (employer) – benefit
- 4472 – Employer pension for employee
- 4473 – Employer provident for employee
- 4475 – Retirement annuity (employer) – deduction
How to read this:
These affect tax deductions and retirement savings, even if cash never reaches you.
Lump Sums and One-Off Payments
- 3614 – Other retirement lump sums
- 3901 – Gratuities
- 3906 – Special lump sums
- 3907 – Other lump sums
- 3908 – Surplus apportionments
- 3909 – Unclaimed benefits
- 3915 – Retirement lump sum
- 3920 – Lump sum benefit
- 3921 – Living annuity (s15C)
- 3922 – Death compensation
How to read this:
These are taxed using special SARS tables, not normal PAYE rates.
Medical-Related Items
- 3813 – Other medical costs
- 4005 – Employee medical aid
- 4024 – Other medical costs
- 4474 – Employer medical aid
- 4493 – Employer 7th schedule medical
How to read this:
These feed into medical tax credits and deductions on the tax return.
Deductions, Taxes, and Credits
- 4102 – PAYE
- 4115 – PAYE on lump sum payments
- 4116 – Medical scheme fees tax credit
- 4120 – Additional medical scheme fees tax credit
- 4141 – UIF
- 4142 – Employer SDL contribution
- 4030 – Donations
How to read this:
These amounts reduce tax payable or show statutory deductions already paid.
