Provisional Tax Calculator

Provisional tax must be paid by any person who receives income other than remuneration (salary), or remuneration from an employer who is not registered for PAYE. This includes sole proprietors, freelancers, rental income earners, and individuals with investment income. Companies and trusts are also provisional taxpayers.

For individuals with a February year-end, the 1st provisional payment is due by 31 August (6 months into the tax year) and the 2nd provisional payment is due by 28/29 February (at year-end). A voluntary 3rd "top-up" payment can be made within 6 months after year-end to reduce interest.

The basic amount is the lesser of your estimated taxable income for the current year or the taxable income from your most recent assessment. SARS uses this to determine whether you have paid sufficient provisional tax. If you underestimate your income by more than a prescribed percentage, penalties may apply.

If your estimate is less than 80% of actual taxable income (or 90% for taxable income above R1 million), SARS may levy a 20% penalty on the shortfall. Interest is also charged on late or insufficient payments at the prescribed rate, currently calculated from the payment due date.

You can reduce provisional tax by claiming allowable deductions such as retirement fund contributions, medical expenses, and business expenses. Ensure your estimate accurately reflects expected deductions. However, significantly underestimating income to reduce payments can trigger penalties.