SARS is coming after wealthy South Africans working overseas

High-earning South African expatriates are top targets for SARS audits in 2025 as the taxman ramps up enforcement to recover revenue from complex cross-border structures, lucrative expat packages, and common payroll compliance errors.

Many of these South Africans could face a detailed audit letter from the taxman requesting payslips for a specific period, full payroll reconciliations, and proof of foreign tax paid.

They may also need to provide a breakdown of international travel expenses, departure dates for trips, and the duration of the visit to each entity.

According to Tax Consulting South Africa master mobility specialist Tanya Tosen, rigorous audits involving expatriates are no longer rare.

Speaking at the 5th Global Mobility Conference hosted by Xpatweb in Johannesburg on 13 August 2025, she described a case which involved the South African Revenue Service (SARS) and expat employees.

SARS asked an employer for 12 months of payslips for expat employees who received benefits such as cheap company housing and the use of company vehicles. SARS also clarified that more documentation could be requested at any time.

Tosen said SARS is clearly not pulling any punches in the scope of information it demands during audits of expatriate taxpayers.

It is ramping up collection efforts and enforcement. This is driven by the lucrative potential of recovering revenue from complex cross-border tax structures, coupled with the high value of expatriate remuneration packages.

Tosen noted that expat packages often exceed local remuneration by a factor of ten. However, remuneration for expats worldwide varies widely based on location, industry, and experience level.

The global average expat salary is between $75,000 (R1.33 million) and $80,000 (R1.42 million) per annum. Switzerland tops the chart in compensating skilled expats, followed by the United States.

The highest paying industries for expats are finance and banking, followed by ICT and engineering.

Employers need to act

Tosen stressed that expatriate tax compliance is a core employer responsibility with both financial and reputational risks.

Employers are accountable for accurate expatriate payroll reporting, tax compliance, and their relevant payments.

Further complexities include determining whether a South African expat has officially ceased tax residency to protect their worldwide income from the SARS net, or if they are still tax resident on the SARS system despite residing abroad.

When a taxpayer leaves South Africa on a long-term assignment or for permanent relocation, ceasing tax residency is not automatic.

“Many employers misinterpret the rules, leading to incorrect tax withholding or reporting,” Tosen explained.

“When expats earn income across multiple jurisdictions, Double Taxation Agreements or foreign tax credits must be applied correctly to avoid under- or overpayment.”

Another common pitfall is non-cash and fringe benefits such as housing, schooling, relocation expenses, company-provided motor vehicles, and home leave flights.

These are often either incorrectly valued or omitted entirely from payroll reporting, which can trigger compliance issues.

Tosen warned that SARS is increasingly targeting these items as easy revenue recovery points. Even minor payroll or tax residency errors can lead to substantial tax shortfalls, penalties, and interest.

“Non-compliance does not expire. SARS can audit as far back as they want to, especially if they suspect underreporting or residency misclassification,” she said.

By investing in robust payroll processes, accurate tax residency assessments, and regular compliance reviews, organisations can minimise risks and protect their reputations with regulators and employees.

Where are wealthy expats going

Over 300 million people, or 3.6% of the global population, currently live outside their birth countries. Experts predict the worldwide expat population can grow to 350 million by 2035.

The United Arab Emirates has the highest expat population, with 88% of its total national population being foreign-born.

The United States hosts the largest number of expats, amounting to approximately 51 million expats.

Portugal is the fastest-growing expat destination, growing 30% between 2020 and 2025. Thanks to digital nomad visas, Golden Visa schemes, and the low cost of living in these jurisdictions, Mexico follows.

Tosen said a closer look at the numbers reveals that 54% of the world’s expats are employees and professionals, followed by migrants and refugees at 18%.

This is followed by retirees (7%), and other groups like dependents, lifestyle movers, and long-term travellers.

International surveys show that securing a visa or residency permit is often the biggest administrative hurdle for expats.

In 2025, Switzerland and Denmark were among the toughest countries for expats to get visas due to strict work visa policies and high salary requirements.

The United States’ lengthy green card process and Japan’s preference for local hires also pose challenges.

Portugal and Spain are among the countries where it is easiest for expats to get visas. Both countries focus on attracting digital nomads and have Golden Visa programs.

Changes for expats

The landscape for mobile expats is changing due to corporates focusing on cost savings. Long-term assignments, typical postings of 2 to 5 years, are declining as companies prioritise flexibility and cost control.

“In the past, expats would demand relocation costs for family members and their pets, anything from dogs to horses, as they knew their skills were in high demand,” Tosen said. “This is now changing.”

Short-term assignments lasting 3 to 12 months are gaining popularity. They enable rapid skill deployment for technical problem solving and training.

There are more permanent transfers for strategic talent placement, cost efficiencies, and to close long-term skills gaps with a medium level of complexity.

Another trend is the increase in commuter assignments in cross-border regions such as the European Union and the Gulf region.

Rotation assignments remain stable in the mining, energy, and infrastructure fields, where skilled workers work on remote sites for a few weeks at a time.

Virtual assignments, ideal for digital nomads in roles that do not require physical presence, are growing significantly.

With digital integration between SARS, the Department of Home Affairs, and foreign tax authorities, Tosen stressed that the era of full expat compliance has arrived.

Companies must adopt a proactive, specialist-led approach to payroll, tax planning, and mobility strategy. Neglecting expat compliance is no longer an option for employers.

Those who act early and strategically will not only safeguard against financial and reputational risk but also unlock smoother mobility, stronger talent retention, and a future-ready workforce.