Figures checked against SARS on 30 October 2026, for the 2027 tax year (1 March 2026 to 28 February 2027). General information, not tax advice.
Short answer: SARS doesn't have a special bonus tax rate. Your employer works out the tax on a full year of your normal salary, then on that salary plus the bonus, and deducts the difference from your bonus in the month it's paid.[1] Because your salary has already used up the lower tax brackets and your tax rebate, the bonus is taxed at your top (marginal) rate. If the bonus pushes you into a higher bracket, part of it is taxed at that next rate. To see the PAYE on your own bonus, use our free bonus tax calculator.
How PAYE on a bonus is worked out (SARS's annual-payment method)
SARS treats a bonus or 13th cheque as an "annual payment": an amount paid as a lump sum, or worked out without reference to a pay period.[1] Annual bonuses, incentive bonuses, merit awards and encashed leave all fall under this rule.[1]
The employer's calculation, from SARS's employer guide, goes like this:[1]
- Work out your annual equivalent: your regular monthly pay × 12.
- Work out the tax on that annual equivalent, using the annual tax tables.
- Add the bonus to the annual equivalent and work out the tax on the total.
- The difference between step 3 and step 2 is the PAYE on the bonus. It's deducted in the month the bonus is paid, on top of the normal PAYE on that month's salary.
The bonus shows on your IRP5 under source code 3605.[1]
PAYE tax tables 2026: the 2026/27 brackets your bonus falls into
If you're looking for the PAYE tax tables for 2026, these are the SARS income tax rates for the 2027 tax year (1 March 2026 to 28 February 2027), announced in the 25 February 2026 Budget.[2] Payroll uses SARS's weekly, fortnightly and monthly deduction tables, published each year after the Budget, for normal pay, and the annual table at the end of the tax year.[1] The bonus calculation above uses the annual rates, because a bonus is an annual payment. To check the PAYE on your regular monthly salary, use our PAYE calculator.
Taxable income (R) | Tax |
|---|---|
0 – 245,100 | 18% of taxable income |
245,101 – 383,100 | 44,118 + 26% of income above 245,100 |
383,101 – 530,200 | 79,998 + 31% of income above 383,100 |
530,201 – 695,800 | 125,599 + 36% of income above 530,200 |
695,801 – 887,000 | 185,215 + 39% of income above 695,800 |
887,001 – 1,878,600 | 259,783 + 41% of income above 887,000 |
1,878,601 and above | 666,339 + 45% of income above 1,878,600 |
Rebates and tax-free threshold 2026/27
The primary rebate is R17,820 a year (plus R9,765 from age 65 and another R3,249 from 75). Under 65, you pay no tax on income up to R99,000 a year.[2]
PAYE on bonus: three worked examples
Illustration only. The names and salaries are made up. All three people are under 65, monthly paid, have no retirement fund contributions or medical aid, and get the bonus in December 2026. We used the 2026/27 rates above. Your payroll may come out a few rand different, because SARS's deduction tables work in income bands rather than to the exact rand.
1. Sipho: a 13th cheque inside one bracket
Sipho earns R22,000 a month and gets a R22,000 13th cheque.
- Annual equivalent: R22,000 × 12 = R264,000. Tax after the rebate: R31,212.
- Plus the bonus: R286,000. Tax after the rebate: R36,932.
- PAYE on the bonus: R36,932 − R31,212 = R5,720.
Sipho takes home R16,280 of the R22,000 (before UIF and any other deductions). The whole bonus sits in the 26% bracket, so the PAYE is exactly 26% of it.
2. Anele: a bonus that crosses into the next bracket
Anele earns R40,000 a month and gets a R60,000 performance bonus.
- Annual equivalent: R480,000. Tax after the rebate: R92,217.
- Plus the bonus: R540,000. Tax after the rebate: R111,307.
- PAYE on the bonus: R19,090, which is about 31.8% of the bonus.
R50,200 of the bonus falls in the 31% bracket (up to R530,200) and the last R9,800 falls in the 36% bracket. That's where "my bonus pushed me into a higher bracket" comes from: only the part above the line is taxed at the higher rate, not the whole bonus or the whole salary.
3. Thandi: a small salary, where the rebate still helps
Thandi earns R7,000 a month (R84,000 a year), which is under the R99,000 tax threshold, so no PAYE comes off her salary.
- With a R7,000 bonus, her total is R91,000, still under the threshold. PAYE on the bonus: R0.
- With a R20,000 bonus, her total is R104,000. Tax on that is R18,720 before the rebate, and R900 after it. PAYE on the bonus: R900.
Her salary hadn't used up the R17,820 rebate, so most of the bonus is covered by what's left of it.
Why it feels like the bonus is taxed more
Your normal monthly PAYE is spread evenly: the lower brackets and the rebate are shared across 12 months. The bonus gets none of that benefit, because your salary has already used it. So the bonus is taxed at your marginal rate, all in one month. It isn't a higher rate, just the same rate applied to money that sits at the top of your income.
Is the PAYE on my bonus final?
No. PAYE is an advance payment. When you file your tax return, SARS works out the tax on your whole year's income and squares up the difference against the PAYE your employers paid over.[1] If your income changed during the year, for example you started the job mid-year, you may get some back or owe a bit more on assessment.
Your employer pays the PAYE over to SARS within seven days after the end of the month it was deducted. If the 7th is a weekend or public holiday, it's due on the last business day before.[1][3]
Can I pay less tax on my bonus?
Retirement fund contributions are the main legal route. Contributions to a pension, provident or retirement annuity fund are deductible up to 27.5% of the higher of your remuneration or taxable income, capped at R430,000 a year.[1] Some employers let you put part of a bonus straight into a retirement fund. Ask your payroll or HR team whether yours does, and speak to a registered tax practitioner or financial adviser about whether it suits you. See the effect with our retirement annuity calculator.
For employers: paying bonuses this December
- Tax the bonus as an annual payment using the method above, and reflect it under code 3605 on the IRP5.[1]
- If a bonus relates to a specific pay period and is paid in that same period (for example a production bonus), SARS says to add it to that period's salary and use the normal weekly, fortnightly or monthly tables instead.[1]
- SARS's employer guide also describes working out the tax on a bonus at the start of the employee's tax year and spreading it over the remaining pay periods.[1]
- PAYE deducted in December 2026, including PAYE on December bonuses, is due by Thursday 7 January 2027 (seven days after month end; 7 January isn't a weekend or public holiday).[1][3] Check the date in the SARS tax calendar.
Recap
- No special bonus rate: the bonus is taxed at your marginal rate, using SARS's annual-payment method.
- PAYE on the bonus = tax on (annual salary + bonus) − tax on annual salary.
- 2026/27 brackets run from 18% to 45%; the primary rebate is R17,820.
- PAYE is squared up when you file your return.
- Your regular monthly PAYE: the PAYE calculator.
Work out the PAYE on your own bonus: try the free bonus tax calculator. Enter your monthly salary and bonus to see the tax and what you take home.
FAQ
How is a bonus taxed in South Africa?
As an annual payment. Your employer works out the tax on a year of your regular salary, then on that salary plus the bonus, and deducts the difference from the bonus in the month it's paid. The bonus is taxed at your marginal rate.
Is a 13th cheque taxed at a higher rate than my salary?
No. A 13th cheque is an annual payment, taxed like any other bonus at your marginal rate. It feels higher because the lower brackets and your rebate are already used by your salary, and the tax is all deducted in one month.
How much tax will I pay on a R20,000 bonus?
It depends on your salary. In 2026/27, if your annual salary plus the bonus stays within one bracket, the PAYE is the bracket rate times the bonus. For example, R5,200 at 26% for salaries between about R20,425 and R30,258 a month. Use our bonus tax calculator for your own figure.
Do I get the tax on my bonus back?
Only if too much PAYE was deducted over the whole year. SARS squares up PAYE against your actual tax when you file your return.
This article is general information, not tax advice. Tax rules and rates change: check with SARS or a registered tax practitioner for your own situation.
Sources
- SARS, Guide for Employers in respect of Employees' Tax (2027 tax year), PAYE-GEN-01-G21, Revision 1: sections "Quick reference card" (p. 3), "Payment of employees' tax, SDL and UIF" (p. 13), "Employees' tax" deduction tables (p. 27), "Annual payments/bonus" (p. 32–33) and "Retirement fund contributions". https://www.sars.gov.za/wp-content/uploads/Ops/Guides/PAYE-GEN-01-G21-Guide-for-Employers-iro-Employees-Tax-for-2027-External-Guide.pdf (checked 28 Oct 2026)
- SARS, Rates of tax for individuals, 2027 tax year, tax rebates and tax thresholds. https://www.sars.gov.za/tax-rates/income-tax/rates-of-tax-for-individuals/ (checked 28 Oct 2026)
- SARS, Pay-As-You-Earn (PAYE): "How and when should it be paid?" https://www.sars.gov.za/types-of-tax/pay-as-you-earn/ (page last updated 23 Sep 2026; checked 28 Oct 2026)