Question 1

How is PAYE calculated on my salary in South Africa?

Accepted Answer

PAYE (Pay As You Earn) is calculated using SARS progressive tax brackets. Your annual gross salary is first reduced by allowable deductions such as pension contributions. The resulting taxable income is then taxed at increasing rates: 18% on the first R245,100, up to 45% on income above R1,878,600. Personal rebates (R17,820 for under 65s in 2026/2027) are subtracted from the gross tax to arrive at annual PAYE, which is then divided by 12 for the monthly deduction. Medical aid tax credits also reduce your PAYE further.

Question 2

What is the UIF deduction on my payslip?

Accepted Answer

UIF (Unemployment Insurance Fund) is deducted at 1% of your gross monthly salary, capped at a maximum of R177.12 per month. This cap applies because UIF contributions are only calculated on remuneration up to R17,712 per month. Your employer also contributes a matching 1% on your behalf. UIF entitles you to benefits in the event of unemployment, maternity leave, or illness.

Question 3

How much tax do I pay on a R500,000 salary in South Africa?

Accepted Answer

On an annual salary of R500,000 in the 2026/2027 tax year (assuming you are under 65 with no deductions), the tax falls in the 31% bracket. Tax = R79,998 + (R500,000 - R383,100) × 31% = about R116,237. Less the primary rebate of R17,820, annual PAYE is about R98,417, or roughly R8,201 per month before medical credits.

Question 4

Does my pension contribution reduce my tax?

Accepted Answer

Yes. Contributions to a retirement annuity, pension fund, or provident fund are tax-deductible up to 27.5% of the greater of remuneration or taxable income, capped at R430,000 per tax year. This deduction reduces your taxable income before PAYE is calculated, which can significantly lower your monthly tax bill. For example, contributing 10% of a R50,000/month salary (R5,000/month) reduces annual taxable income by R60,000.

Question 5

What is the tax-free threshold in South Africa?

Accepted Answer

In the 2026/2027 tax year, the tax-free thresholds (minimum amounts below which no income tax is payable) are: R99,000 for taxpayers under 65; R153,250 for taxpayers aged 65 to 74; and R171,300 for taxpayers aged 75 and over. These thresholds account for the applicable personal rebates being applied against the gross tax liability.

Question 6

How do medical aid tax credits work?

Accepted Answer

Medical aid tax credits (also called medical scheme fees tax credits) directly reduce the amount of PAYE you owe, rand for rand. For the 2026/2027 tax year, the credit is R376 per month for the main member, R376 per month for the first dependant, and R254 per month for each additional dependant. So a taxpayer with two medical aid members gets a credit of R752,00/month (R9 024,00/year), which is subtracted directly from annual tax before calculating monthly PAYE.

Question 7

How to calculate tax from salary per month?

Accepted Answer

Multiply your gross monthly salary by 12 to annualise it, subtract pension deductions, apply SARS tax brackets, subtract rebates (R17,820 primary rebate for under-65s in 2026/2027) and medical credits, then divide by 12. This calculator does it automatically. Employers use the same logic for monthly PAYE on your payslip.

Question 8

What is the difference between gross and net salary?

Accepted Answer

Gross salary is your total pay before deductions. Net salary (take-home pay) is what lands in your bank account after PAYE, UIF, pension, medical aid, and other deductions. Use this calculator to convert gross monthly salary to net salary for South Africa.

Taxable income	Rate of tax
R 0,00 – R 245 100,00	18% of taxable income
R 245 101,00 – R 383 100,00	R 44 118,00 + 26% of amount above R 245 100,00
R 383 101,00 – R 530 200,00	R 79 998,00 + 31% of amount above R 383 100,00
R 530 201,00 – R 695 800,00	R 125 599,00 + 36% of amount above R 530 200,00
R 695 801,00 – R 887 000,00	R 185 215,00 + 39% of amount above R 695 800,00
R 887 001,00 – R 1 878 600,00	R 259 783,00 + 41% of amount above R 887 000,00
R 1 878 601,00 and above	R 666 339,00 + 45% of amount above R 1 878 600,00

Rebate	Amount a year
Primary RebateAll taxpayers under 65 years of age	R17,820
Secondary RebateAdditional rebate for taxpayers 65 to 74	R9,765
Tertiary RebateAdditional rebate for taxpayers 75 and over	R3,249

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Salary Calculator South Africa 2026/2027

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