SARS & Tax
PAYE tax directive (IRP3)
A SARS-issued instruction overriding the normal PAYE calculation — used for bonuses, retrenchment lump sums and non-executive directors.
Full definition
A PAYE tax directive is an instruction issued by SARS (via IRP3 forms) telling an employer to withhold PAYE at a specific rate or amount, overriding the normal calculation. Common uses: retrenchment lump sums (IRP3a), non-executive directors, and employees with complex tax circumstances.
See also
PAYE
Pay-As-You-Earn is the monthly income tax an employer withholds from each employee's salary and pays over to SARS.
Retrenchment
Termination for operational (economic, structural, technological) reasons under Section 189 of the LRA.
Severance pay
One week's pay per completed year of service, payable to employees retrenched for operational reasons (BCEA Section 41).
Automate PAYE tax directive (IRP3) in your payroll
Payroll Africa handles PAYE tax directive (IRP3) calculations automatically for South African employers — SARS-aligned for 2026/27. From R90/month.
Browse the full South African payroll glossary — 55 terms explained.