What is Income Tax?
Definition
Income tax is a direct tax levied by SARS on the taxable income of individuals, companies, and trusts in South Africa, using a progressive rate system for individuals.
Explained Simply
South Africa uses a progressive tax system for individuals, with rates from 18% to 45% across seven brackets. Companies pay a flat rate of 27%. Trusts pay 45% on undistributed income. The tax year for individuals runs from 1 March to 28/29 February. Companies can choose any year-end. Tax returns are filed via SARS eFiling, with deadlines varying by taxpayer type. Rebates reduce tax payable based on age: primary (R17,820), secondary for 65+ (R9,765), and tertiary for 75+ (R3,249).
Free Tool
Income Tax Calculator
Calculate your annual income tax obligations based on current SARS tax brackets and rebates.
Related Terms
Taxable Income
Taxable income is the portion of total income on which income tax is calculated, after subtracting all allowable deductions and exemptions as defined by SARS.
PAYE (Pay As You Earn)
PAYE is the system through which employers deduct income tax from employees' salaries and pay it directly to SARS on their behalf each month.
Provisional Tax
Provisional tax is a method of paying income tax in advance, in two or three instalments during the tax year, rather than as a lump sum at year-end.
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