- and such person would be regarded as an employee of the client if the relationship was directly between the person and the client; or
- the person fails the control and supervision test; or
- the person fails the regular payments test; or
- more than 80% of the income of the company/ trust from services rendered is directly or indirectly from the client;
Except where the company/trust throughout the year employs more than three fulltime employees who are:
- engaged full-time in rendering the services; and
- are not shareholders or members in the case of a company; and
- who are not connected persons in relation to the entity or its members or shareholders as the case may be.
Is the person a personal service company or trust?
- If yes, is the person a labour broker?
- If yes, apply the test applicable to labour brokers (as shown below).
- If no, employees’ tax is deductible.
Is the person in receipt of any remuneration by reason of services rendered to or on behalf of a labour broker?
If yes, employees’ tax is deductible.
Is the person a labour broker?
If yes, is the person registered as such for employees’ tax purposes and are all returns up to date?
If no, employees’ tax is deductible. If yes, are any of the following present:
- more than 80% of gross income from one client or associated institution;
- provides the services of any other labour broker;
Contractually obliged to provide the services of a specified employee?
- If yes, employees’ tax is deductible. If no, apply the dominant impression test.
- Is the dominant impression that of an independent broker?
- If yes, employees’ tax is not deductible. If no, employees’ tax is deductible.