What is Turnover Tax?
Definition
Turnover tax is a simplified tax system available to South African micro-businesses with a qualifying turnover of R1 million or less per year.
Explained Simply
Instead of paying income tax, VAT, and dividends tax separately, qualifying businesses pay a single turnover tax calculated on gross turnover. The rates are progressive, starting at 0% for the first R335,000 and increasing to 3% above R750,000. Qualifying businesses include sole proprietors, partnerships, close corporations, and companies. Excluded businesses include professional services, financial services, and personal service providers. Registration is done through SARS eFiling.
Free Tool
Turnover Tax Calculator
Calculate turnover tax and compare it against income tax + VAT for small businesses.
Related Terms
Income Tax
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.
VAT (Value-Added Tax)
VAT is a consumption tax of 15% levied on most goods and services in South Africa, collected by businesses on behalf of SARS.
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