SARS cracking down on influencers

SARS has confirmed that South African influencers must declare all perks, freebies, and sponsored experiences as taxable income, with failure to comply risking penalties, interest, and audits.

Hobbs Sinclair tax director Danielle Luwes explained that the rise of the influencer economy has opened lucrative doors for South Africans, most often in ways that extend beyond traditional pay cheques.

Social media creators are increasingly rewarded with perks that do not look like “income” in the traditional sense, ranging from sponsored tech gadgets and designer clothing to complimentary meals, luxury getaways and hotel stays.

However, the South African Revenue Service (SARS) has made it clear that if influencers are benefiting, they should be declaring.

In a recent media statement, SARS clarified that social media influencers are now recognised as a distinct taxpayer segment, similar to sole proprietors or freelancers.

The revenue service stressed that income is not limited to what is paid into a taxpayer’s bank account.

Goods, services, travel and experiences received in exchange for content or exposure all fall within the definition of “gross income” in terms of the Income Tax Act.

That means the value of freebies, gifts or sponsorships may need to be included in an influencer’s tax return – whether it’s a R2,000 pair of shoes or an all-expenses-paid trip to Mauritius.

SARS has made it clear that all forms of remuneration, whether in cash or kind, must be declared. With influencer marketing on the rise, the tax authority is stepping up its compliance efforts in this space.

This means that, for influencers, the days of assuming that a sponsored product or complimentary stay is just a perk of the job are over. According to Luwes, this shift has been a long time coming.

Modest omissions have major consequences

“Influencers are modern entrepreneurs,” Luwes said. “Many underestimate how broadly ‘income’ is defined under South African law. Anything received in exchange for exposure or service, even products, experiences or travel, is potentially taxable.”

“Understanding your obligations from the outset helps avoid costly surprises, penalties, or audits down the line.”

The practical implications for influencers are significant. While salaried employees typically have tax deducted automatically through PAYE, influencers often earn irregular income from multiple sources, including barter arrangements.

This means many may fall into the provisional taxpayer category, requiring them to submit returns and make advance tax payments.

Many new influencers don’t realise that SARS calculates their tax based on their total annual income, not just income from a single brand deal.

This emcompasses all income sources, including cash payments, affiliate commissions, and the market value of products or services received in exchange for content.

The more someone earns, the higher their tax bracket, which determines the percentage of tax they owe the taxman.

For example, if an influencer is already earning over R1.8 million per year, this places them in South Africa’s highest personal tax bracket (45%).

If they forget to declare just R50,000 in brand-related income, such as a sponsored trip, luxury product, or service, the following could apply –

• Tax owed on that amount at 45% = R22,500
• Understatement penalty of 50% = R11,250
• Estimated interest = R1,500 to R3,000
• This brings the influencer’s total liability to approximately R35,250 to R36,750.

What starts as a relatively modest omission can quickly escalate, and that does not include potential administrative penalties or legal risks.

Do not overlook the details

Beyond the financial sting, there’s also reputational risk. Once SARS flags a taxpayer for discrepancies, their future tax returns may face ongoing scrutiny or audits for years to come.

“Influencers can’t afford to overlook the details,” Luwes said. “Keep records of your costs, whether it’s buying a ring light, paying for data or travelling for a shoot – because these can reduce your taxable income.”

“But remember, those ‘free’ clothes, gadgets or meals aren’t really free – SARS expects you to assign a value to them and declare it.”

Without proper records, Luwes warned that influencers can end up paying too much tax or face penalties for under-declaring.

VAT is also an important consideration for influencers. While it does not apply to everyone, influencers whose taxable turnover exceeds the current threshold may be required to register as VAT vendors.

Luwes explained that this is why influencers must keep detailed records and declare all forms of income – cash and non-cash. She stressed that taking a proactive approach is key.

“Good record-keeping, transparency in contracts, and openness with SARS are not just best practice – they’re essential for integrity and sustainable growth in this new economy,” she said.

For now, SARS has indicated it will focus on education and outreach. However, with advanced data-matching capabilities and a sharpened eye on compliance, the taxman is unlikely to let things slide for long.

Luwes urged influencers to use this window to assess all their income streams, register or update their taxpayer status, and seek professional advice where needed.