Can a Non-Profit Company earn income, charge fees, pay salaries or reimburse expenses? #
Yes. “Non-profit” does not mean that a Non-Profit Company (NPC) may never receive income, charge an appropriate fee, pay a salary or reimburse a genuine expense.
The important rule is that the NPC’s income and property must be used to advance its stated purposes. They cannot be distributed as private profit to directors, founders or members.
Can an NPC earn more than it spends? #
Yes. Money left after expenses is not automatically prohibited profit. It remains the NPC’s money and may be kept for future work, reserves, equipment, property costs or other activities that advance its purposes.
Can it charge for activities or services? #
An NPC may carry on a business, trade or undertaking that is consistent with, or supports, its stated purposes. Whether a particular activity is appropriate, taxable or subject to another rule depends on the facts.
Do not assume that company-law permission creates a tax exemption.
Can it pay people? #
An NPC may pay reasonable remuneration for genuine goods delivered or services rendered. Remuneration means payment for work or services.
It may also reimburse genuine expenses incurred to advance its purposes. A reimbursement should be supported by appropriate records, such as receipts and an approved expense record.
Payments to directors or connected people require particular care. Conflicts of interest must be disclosed and managed, and the amount and purpose must be defensible.
What about tax? #
NPC registration does not automatically make all income tax-free. Public Benefit Organisation approval and section 18A approval are separate South African Revenue Service processes. Trading income may require specialist tax analysis even where an organisation is an approved Public Benefit Organisation.
Use Start My Company Support for an administrative next step. Obtain advice from a registered South African tax practitioner or accountant for the organisation’s particular tax and accounting position.
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Last checked against official information: 31 August 2026
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