Paying a performer from abroad: South Africa's final tax
What SARS's final tax on non-resident entertainers and sportspersons is charged on, and how an organiser records the fee, the tax and the payment.
By Achekam · · 6 min read · For Events businesses in South Africa
The headline act for your festival lives in London. The keynote speaker who closes your sports awards evening is a retired champion based in Europe. The booking agent has sent the contract, the fee is agreed, and the agent wants the money in an overseas account a week before the show.
Before you approve that transfer, there is a South African tax question to answer. A performer or sportsperson who is not resident here still earns money from an activity in South Africa, and SARS charges a specific tax on it. Leave it until after the show, and the organiser may find it has paid the full fee abroad with the tax question still unanswered.
What SARS charges, and on what
SARS lists, among the country's other taxes, a final tax of 15% charged on the gross amounts payable to non-residents for their activities in South Africa as entertainers or sportspersons. At the time of writing that is the rate on SARS's page of other tax rates, which also sets out the separate rate for royalties paid to non-residents. Check the page again before each booking, because rates change.
Three words in that description do most of the work:
- Non-residents. The tax is aimed at people who are not resident in South Africa. A local band does not fall under it.
- Activities in South Africa. It is about the show, match or appearance that takes place here.
- Gross. The tax is worked out on the full amount payable, not on what is left after the agent's commission or the performer's own costs.
SARS calls it a final tax. What that means for the performer's own tax position is a matter for their adviser, not yours. Your concern is the amount, who deals with it, and when it must reach SARS.
Working out the amounts before anyone is paid
If the duty to deduct the tax and pay it over falls on you as the organiser paying the fee, the arithmetic is simple. Confirm that duty, and the date by which the tax must reach SARS, with SARS or your tax adviser before you sign: the rate page does not set out the procedure.
A worked example in words. The agreement sets one performance fee for a headline act. The tax is 15% of that whole fee. The organiser keeps the tax back, pays the agent the fee less the tax, and pays the tax to SARS. The performer's side should know this from the first draft of the contract, so nobody argues on the night about a short payment.
Questions to put to your adviser before you calculate:
- Are travel, accommodation or daily allowances you pay for the act part of the gross amount payable?
- If the fee is in dollars, pounds or euros, which exchange rate and date turn it into rand for the tax?
- If the act contracts through its own company or an agency, does that change who is paid and on what?
Showing the fee and the tax in the books
The fee is a cost of the event in full, even though part of it never reaches the performer. What changes is who you owe.
| Amount | Owed to | Where it sits until paid |
|---|---|---|
| The full fee | — | An expense of the event |
| The fee less the tax | The performer or their agent | The supplier's balance |
| The tax kept back | SARS | A liability account for tax withheld |
In Achekam, the performer or agency goes onto the business's one supplier list, which checks for duplicates by name or VAT number, so the same agency is not set up twice under two spellings. The agent's invoice is recorded as a supplier bill, line by line. A bill entered without a purchase order waits for approval before it posts, which is a sensible stop for a large one-off fee. Bills can be paid in full or in parts from a chosen bank account.
The withheld tax is moved out of the supplier's balance with a manual journal, into the liability account your accountant chooses for tax owed to SARS. Achekam refuses a journal that does not balance or is dated in a closed month, and a posted journal is corrected only by reversing it, so the trail stays visible. Agree the exact entries with your accountant before the first foreign booking, then follow the same pattern every time.
Paying SARS with the right reference
SARS's payment rules are strict about two things. A payment counts only once it is received into SARS's bank account, and a payment received after the due date is late, so you must pay before your bank's cut-off time, not on the evening of the deadline. EFT payments go to the relevant SARS public beneficiary listed on your bank's platform, such as SARS-VAT, SARS-PAYE or SARS-PROV, and a payment is accepted only with the correct 19-digit payment reference.
Get the beneficiary and reference for this tax from SARS before the event, not after it. Then two practical points about Achekam:
- Paying a supplier in Achekam records the payment only. No bank payment file is produced, so both the agent's payment and SARS's payment are captured on your banking platform by a person.
- Record each payment in the books once it has gone, and keep the bank's confirmation with it.
Royalties are a separate tax
Some bookings include more than a performance: the right to record the show and sell the recording, or to broadcast a match. SARS lists a final withholding tax of 15% on the gross amount of South African-source royalties payable to non-residents. That is a different tax from the one on the performance fee, even where the rate is the same at the time of writing.
If a single payment covers both the appearance and some rights, ask your adviser how to split it, and write the split into the agreement. Keep the two in separate lines on the bill and in separate liability accounts, so each can be paid to SARS and checked on its own.
Points to settle in the booking agreement
Before you sign with a foreign act or athlete, make sure the contract answers these:
- Who you are paying: the performer, their own company or an agency, and where that party is resident.
- That the fee is stated as a gross amount and that South African tax will be kept back from it where it applies.
- Which costs you pay on top of the fee, and how your adviser treats them for the tax.
- Any payment for recording, broadcast or other rights, shown separately.
- The currency, and the date used to convert it.
- Who sends the performer proof that the tax was paid to SARS.
File the signed agreement, SARS's reference and the proof of payment together. Achekam's Document Centre keeps files in folders you choose, and a new version of a file keeps the earlier ones, so the final signed contract does not overwrite the draft the agent first sent.
Before the next booking
Put the tax conversation at the start of the negotiation, not at the payment run. Deposits to the act's agent follow the same supplier process as any other event booking, covered in recording deposits paid to event vendors, and costs you pass on to a client who commissioned the event are dealt with in recharging vendor costs to the client.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
