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Retirement Fund Contributions

HOW TO HANDLE RETIREMENT FUNDS AS A DEDUCTION
Retirement funds now include Retirement Annuity, Pension Fund and Provident Fund.
 
 
Retirement annuity funds are entered in the deduction screen as indicated above. Pension and Provident funds will come from an IRP5 certificate with the and will carry through to this screen.
 
It’s important to understand exactly how the retirement funding contributions work for the tax year 2018. The different types of contributions being retirement annuity, pension and provident were brought together in 2018 and are now treated as one total calculation of contributions. The screen below depicts the deduction contribution screen for the 2019 year.
 
 
In the screen above the pension and provident contributions have to be entered on the IRP5 certificate and can’t be entered on the above screen. From the 2018 year the carry forward will be automatically calculated by Sky and by SARS as one consolidated figure.
 
When doing the 2018 tax return, do not take into account the pension or provident account brought forward as SARS will deduct them as the law was changed and the system of calculation changed. SARS will automatically deduct the pension and provident contributions brought forward in 2018. After 2018 the calculation will work for all three as the retirement annuity, the pension contributions and the provident contributions will be treated as one total.
 
The actual deduction is shown on the screen below.
 
 
October 2019