Previously, some influencers have avoided paying tax on non-cash compensation.
It is easy for the South African Revenue Services (Sars) to track if traditional employees are tax compliant, mostly because these individuals get paid only in money, and their employer sends data to the taxman. It becomes trickier when dealing with influencers on social media.
Sars has now turned its eye on taxing non-cash payments made to influencers. These include trips, products and services.
Sars spokesperson Siphithi Sibeko said it has access to third-party data providers to help it keep track of what influencers receive. “We will know exactly who received what and when. These are Sars agents by law and have a legal duty to provide the information,” he said.
Tax for influencers
Previously, influencers were able to avoid paying tax on non-cash compensation. But this is set to come to an end as Sars is embarking on educating and raising awareness among influencers on tax compliance.
In addition to education efforts and support from third-party data, Sars is relying on voluntary declarations from influencers.
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For traditional employees, Sars relies on data from employers, medical schemes, banks, retirement funds, and other third parties to determine tax obligations. However, Sibeko did not specify which third-party data would be used to track non-cash payments from influencers.
Trips and gifts considered taxable income
Nicci Courtney-Clarke, COO and head of tax at TaxTim, told The Citizen it is important for influencers to recognise that income earned from brand collaborations, sponsored content, and affiliate marketing is taxable.
“Whether you’re receiving payment in cash, products or services, it constitutes taxable income that must be declared to Sars.”
Courtney-Clarke noted that Sars has been using technology and data from third parties to strengthen tax compliance, but cautioned that this does not mean every influencer in the country can be audited and reviewed.
Tracking trips and products
She did acknowledge that it will be harder for the taxman to detect non-cash payments made to influencers, but not impossible.
According to the tax laws, non-cash compensation is considered a form of fringe benefit or barter income and should be declared at its fair market value.
“In practice, this means an influencer receiving a R20 000 trip in exchange for exposure or content is considered to have earned R20 000 in taxable income,” said Courtney-Clarke.
“This is often overlooked because no cash changes hands, but under South African tax law, any form of compensation for services rendered is taxable.”
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Voluntary compliance
She also highlighted that to ensure declarations, Sars relies on voluntary compliance, education on obligations, and enforcement through AI-driven monitoring, third-party data cross-checks, and audits.
Courtney-Clarke advises that influencers must declare any payment made to avoid penalties.
“It is important to be proactive and declare all your details correctly instead of standing a risk of penalties that can be anything from 10% to 200% depending on Sars’ opinion if it was a simple understatement, avoidance, gross negligence or worst case intentional tax evasion.”
Alternative measure to ensure compliance
When asked if the responsibility can be with the brand paying influencers in sponsored trips to declare to the taxman on behalf of the influencers as an alternative measure, she said not at the moment, as the legal obligation remains with the influencers themselves.
“There is no general requirement for companies to withhold tax or declare payments on behalf of freelancers or influencers, unlike pay-as-you-earn (PAYE) for employees.
“Specific withholding applies in limited cases, such as royalties paid to non-residents, but not typically for domestic influencer services. Shifting responsibility to companies would require legislative changes, which Sars has not indicated.”
Courtney-Clarke said many influencers operate as sole proprietors or micro-entrepreneurs and may not fully understand their tax obligations.
Influencer asks for clarity
Lasizwe, a media personality and social media influencer, posted on X that the lines between paid work, gifting and trade exchanges are being blurred.
“Taxing influencers without understanding how we work risks punishing survival, not regulating success,” read his post.
He emphasised that the influencer segment requires education and open dialogue on the topic.
“I’d genuinely welcome a workshop or sit-down with Sars to discuss how creators can contribute in a way that’s fair, informed and future-proof.”
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What influencers need to do
Courtney-Clarke listed the following steps for influencers to take to ensure they are tax-compliant:
- Register as provisional taxpayers (as they are earning income from businesses),
- File returns twice annually (regardless of whether they fall below the normal tax threshold),
- Maintain proper accounting records throughout the year, not just at filing time,
- Keep supporting documents (invoices, receipts, contracts, etc.) in case their return is flagged for verification. “Sars does not accept estimates. Influencers need to be able to substantiate their declared income and deductions.”
- Influencers must keep records of all non-cash payments and their estimated value.
- Sars can use data analytics, audits and third-party reporting to identify discrepancies or undeclared income.
- Education plays a key role in helping influencers understand that “freebies” received as payment are still income under tax law.