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The Two-Pot Retirement System Explained: Components, Withdrawals and Tax

From 1 September 2024, contributions to most South African retirement funds are split one-third to a savings component and two-thirds to a retirement component; you may withdraw from the savings component through your fund (minimum R2,000, once per tax year), and the amount is taxed at your marginal rate after a SARS tax directive. Details below come from the SARS two-pot page and National Treasury's FAQ.

By Morné Kruger, Founder & SA Tax Editor. Last reviewed 2026-11-04.

The Three Components

Treasury says the reform creates a savings component, a retirement component and a vested component. Only the savings and retirement components receive contributions from the implementation date; the vested component holds benefits accumulated before it, and investment growth is still credited to it.

Two-pot components as described by National Treasury
ComponentWhat goes inAccess
VestedRetirement value accumulated as at 31 August 2024; no further contributionsOld rules apply; accessible on resignation as cash (taxed) or by transfer
SavingsOne-third of total contributions from 1 September 2024, plus seed capital of 10% of the fund value at 31 August 2024 (capped at R30,000), taken from the vested component once-offWithdrawal at any time: minimum R2,000, once per tax year
RetirementTwo-thirds of total contributions from 1 September 2024Preserved until retirement; not accessible on resignation

Treasury also says the system applies to active members of private and public sector funds, with exclusions including old-generation retirement annuity policies, funds with no active members, pensioners, and provident fund members aged 55 or older on 1 March 2021 who did not opt in. Ask your fund which rules apply to you.

Savings Withdrawal Rules

Treasury and SARS both state that a withdrawal from the savings component is at least R2,000 and can be made once in a tax year. There is no maximum other than what is available in the component. You do not have to withdraw every year: unused amounts stay in the component and continue to earn fund returns.

How to Apply for a Withdrawal

  1. 1

    Check your tax registration

    SARS says you must be registered for income tax and give your fund a tax reference number. Registration can be done via the SARS Online Query System or WhatsApp on 0800 11 7277 (see SARS news).
  2. 2

    File any outstanding returns and check debt

    SARS will not issue a directive where returns are outstanding, and it deducts tax debt from the withdrawal unless a valid payment arrangement or suspension agreement exists.
  3. 3

    Apply to your retirement fund

    Treasury says members apply to, or enquire directly from, their retirement funds. The fund applies to SARS for the tax directive on your behalf.
  4. 4

    Remember it is final once sent

    Once the fund sends the directive application to SARS, SARS says the decision is final and cannot be cancelled.

Tax on a Savings Withdrawal

Contributions went in untaxed, so tax is deducted from the amount withdrawn. SARS says the withdrawal is taxed at your marginal rate and that retirement lump-sum rates, deductions, exemptions and tax-free amounts are not applied. The fund deducts the amount shown on the SARS tax directive; because your full taxable income is only known at assessment, any difference is settled when you file. SARS notes a R0 directive is possible where the withdrawal does not push taxable income above the threshold, and offers its own two-pot calculator. For worked examples see our withdrawal tax how-to.

Related Tools and Guides

Frequently Asked Questions

When did the two-pot retirement system start?
The reform came into effect on 1 September 2024, according to National Treasury’s FAQ and the SARS two-pot page.
How do I apply for a two-pot withdrawal?
Through your retirement fund, not SARS. National Treasury says members must apply to or enquire directly from their retirement funds on the withdrawal process, and SARS says the fund sends the tax directive application to SARS on your behalf.
How much can I withdraw from the savings component?
Treasury says there is no maximum, but a withdrawal may not be less than R2,000 and only one withdrawal may be made in a tax year. SARS describes the same R2,000 minimum, up to the full available savings component, once per tax year.
How is a savings withdrawal taxed?
Treasury says what is withdrawn is taxed at the individual’s marginal tax rate. SARS says the tax is calculated at the taxpayer’s marginal rate using the annual payment calculation, and that retirement lump-sum tax tables, deductions, exemptions and tax-free amounts are not applied. Taxable income is fully determined only at assessment, so over- or under-deduction can be settled when you file.
What do I need before SARS will issue a tax directive?
SARS says you must be registered for income tax and give your fund your tax reference number. SARS will not issue a directive if you have outstanding returns, and applications can be rejected if your names, ID or passport number or tax reference number do not match the fund’s records.
Will SARS take money I owe from my withdrawal?
Yes. SARS says it deducts any tax debt from the withdrawal first by instructing the fund to withhold and pay it over, unless a valid payment arrangement or suspension agreement is in place. A garnishee order alone is not automatically a payment arrangement.
Can I cancel a withdrawal after applying?
SARS says that once the fund sends the withdrawal directive application to SARS, the decision is final and cannot be cancelled.

Sources consulted

Rules are as published by SARS and National Treasury; the Treasury FAQ is the August 2024 update. Fund rules and later legislative changes may differ, so confirm with your fund. Last updated 2026-11-04.

Compliance Disclaimer

This guide is for information only and is not legal, tax or financial advice. Speak to your fund or an accredited financial adviser before withdrawing. Accounter is not affiliated with the Department of Employment and Labour, SARS, CIPC or any retirement fund.