What is source code 3616?

The common IRP5/IT3(a) code for independent contractor income.

Does 3616 automatically unlock all deductions?

No. You still need a real trade and expenses incurred in producing that income.

Compliance · 8 min

Independent Contractor vs Employee — Why 3616 Matters

The label on the invoice is not the test. The statutory relationship and the IRP5 code are.27 September 2026 All articles

Two different years

An employee’s remuneration is gated by section 23(m). A person who truly carries on a trade can deduct expenses actually incurred in producing that income under section 11(a), if they are not capital. Calling yourself a contractor while you have one client, a desk at their office, and PAYE on 3601 does not open the trade box.

Source code 3616

Independent contractor income often appears as IRP5/IT3(a) source code 3616. Salary/wages is 3601. Commission is often 3605. Read the certificate. If the client deducted PAYE, that withholding still credits your assessment — it does not decide 23(m) by itself.

Provisional tax

Income that is not PAYE remuneration can make you a provisional taxpayer. IRP6 estimates are due end-August and end-February. Underestimate badly and SARS penalises. A single 3616 job can be enough.

What Taxzi does

Set employment type and secondary trade on your profile. We do not reclassify you as a contractor because a statement says “consulting”. You do. Then we match expenses to that story and leave mixed retail in review.

Questions

What is source code 3616?: The common IRP5/IT3(a) code for independent contractor income.
Does 3616 automatically unlock all deductions?: No. You still need a real trade and expenses incurred in producing that income.

Disclaimer: This is general guidance based on the South African Income Tax Act and published SARS Interpretation Notes as at the 2026/2027 year of assessment (1 March 2026 – 28 February 2027). It is not professional tax advice. Deductibility depends on your facts. Confirm current figures on sars.gov.za before you file.

Find the lines SARS will ask about in your bank statements

Upload bank statements. Taxzi flags lines that may qualify under SARS rules. Mixed shops stay out until you say what they were. You confirm every claim. This is guidance — not a filed return.

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