Payroll tax reduction; with or without discount. What is the difference?

When you are employed by a company, you pay taxes on the wages you receive. This is also called payroll tax. The payroll tax is calculated based on several aspects; the hourly wage, the number of hours you work and your age. The more you earn, the more payroll tax you end up paying. Your employer does take into account the general tax credit and employment tax credit. These deductions fall under the wage tax credit. By applying the wage tax credit, you receive a discount on the payroll taxes you pay. As a result, you pay less tax on your wages and end up keeping more.

If you have multiple employers, it is important to remember that you can only apply the wage tax credit with one employer. This is best done with the employer where you work and earn the most. Do you work for several employers in a certain period and do you have the wage tax rebate applied to all of them? Then you will have to pay this back when you file your tax return. If you have paid too much payroll tax because you don't have it turned on anywhere, then of course you will also get this money back when you file your tax return!

Updated on: 03/09/2024