What records should a salaried employee gather after starting a side business?

Establish who is carrying on the business

A side business might be freelance work in your own name, a partnership or a company you own. Write down which person or entity contracts with customers, issues invoices and owns the income. A trading name or separate bank account does not answer that question on its own. Start with the contracts and registration records.

SARS explains that a sole proprietor reports the business income in their personal income-tax return. A company has a separate tax record. If your company pays you, those payments also need their own explanation. Do not combine company turnover with personal earnings merely because you control both bank accounts.

Create a short business profile for your adviser: start date, services or goods sold, trading name, contracting party, payment channels and any other owners. Note whether you started informally and later incorporated. The date and nature of that change can matter when allocating transactions. Keeping the sequence clear is easier than trying to reconstruct it from a year of mixed bank deposits.

Keep the employment file complete

Your salary remains part of the review even if the side business attracts most of your attention. Collect the IRP5 or IT3(a) certificates for each employer during the relevant year, together with payslips and records of changes in employment. Check the certificate details against your own records and query discrepancies with the issuer.

The SARS supporting-document guidance covers common personal-return evidence. Depending on your circumstances, this may include medical, retirement, investment or travel information as well. Put those records in their own sections so business expenses do not obscure a missing personal certificate.

• List every employer or income source for the year.
• Match certificates to the relevant employment period.
• Identify allowances, reimbursements or unusual payments for review.
• Keep any correction request and the issuer's response.
• Tell the preparer about other personal income and relevant changes.

A salary certificate is useful evidence of employment income and withholding. It is not a summary of every transaction from your own trading activity, nor proof that the tax on additional income has already been covered.

Create a complete record of business income

Use an invoice or sales register with a unique reference, customer, date, description, amount and payment status. Include cash, card, online-platform and direct bank receipts. Reconcile the register to the relevant statements, but retain the underlying sales records so you can explain what each receipt represents.

Platform settlements deserve particular attention. The amount reaching your account may be after fees, refunds or other deductions. Keep the platform report alongside the bank entry so the gross activity and the charges can be reviewed separately. Download those reports while they remain available and label them by period. If a platform account closes or its reporting view changes, the settlement reference alone may no longer explain the underlying sales. Keep a record of the currency and any conversion information where relevant. Do not assume a single net deposit describes the entire transaction.

Identify customer deposits, unpaid invoices, cancelled work and refunds. Keep contracts or order confirmations for unusual arrangements, including foreign customers. Their accounting and tax treatment depends on the facts, so provide the details instead of guessing a return category. If you move money between your own accounts, label the transfer consistently on both sides. A personal savings transfer is not automatically another sale, and a customer payment should not disappear because it entered an account you also use privately.

Keep evidence of costs and explain mixed use

For each business cost, retain the supplier document, proof of payment and a brief explanation of its connection to the activity. A bank entry identifies money paid but often says little about what was bought. If a receipt is missing, request a replacement from the issuer and record the gap rather than creating a substitute invoice yourself.

Keeping a receipt does not automatically make the amount deductible. Ask the preparer to examine the type of cost, applicable restrictions and relevant year. Home-office expenses, vehicle use and capital purchases can raise specific questions. Preserve the evidence needed for that review rather than assuming everything bought after the business started is a business deduction.

Reconcile a personal account used for business

If you have already mixed personal and business activity, organise the records before deciding whether a different account arrangement would help. Export the full period and classify each transaction as business, personal, internal transfer or unresolved. Keep the original statement and create a separate working schedule so the evidence remains intact.

1. Match customer payments to the sales register.
2. Match business payments to supplier records.
3. Identify transfers between your own accounts.
4. Separate private spending and explain mixed-use transactions.
5. Investigate unmatched items and retain the resolution.

For example, a designer may receive salary, three client payments and a transfer from savings in the same month. Only the bank view shows all five credits together. The employment certificate, client invoices and transfer record explain why those credits need different treatment. This is an illustrative organisation problem, not a calculation of the designer's tax. Once the review is complete, maintain the classification monthly so the next return does not depend on remembering old transactions.

Check tax obligations beyond the annual return

Starting to earn business income can change the tax questions you need to consider during the year. Ask whether you are a provisional taxpayer and what estimates, returns and payments apply. The answer depends on your full circumstances; the fact that your employer deducts PAYE does not establish that every obligation arising from the side business has been addressed.

Prepare a realistic income-and-cost forecast, including employment income and other relevant amounts. Keep actual figures separate from expected future work. Tell the adviser about a new major contract, a cancelled project or a change in salary so the estimate can be reviewed using current facts.

SARS provisional-tax guidance explains the advance-payment system. Use the rules and dates appropriate to your tax year, and record who will monitor them. A business cash reserve may help with planning, but it is not itself a tax calculation. Avoid choosing a payment solely from the amount left after household expenses.

Turn the records into a useful personal-tax handover

Group the material by tax year and include a one-page list of income sources, accounts used, missing documents and decisions needing advice. Distinguish your own trading records from any company records. Give the preparer access through an agreed method and retain your own organised copies.

Review pre-populated information against the full pack. If an auto-assessment omits business activity, take the steps needed to correct the return for the relevant year rather than treating the automated result as confirmation that the activity is exempt. Keep correction requests, filed returns, assessments and payment records together.

Personal income-tax return support is easier to use when the adviser can see both the salary and side-business picture. Start with complete sales and cost records, make uncertainties visible and ask for the final calculation to be explained. That gives you a repeatable record routine as the business grows, without relying on a last-minute search through messages and banking notifications.

If customers pay into a personal account, mark the business receipts individually and reconcile them to invoices. Explain transfers between your own accounts separately so the preparer can distinguish sales from money moved between accounts.