How to Calculate Tax on a Two-Pot Retirement Withdrawal
Updated 12 March 2026 · 3 min read · 5 steps
Learn how two-pot retirement withdrawals are taxed in South Africa. Step-by-step calculation of marginal tax rate impact with worked examples.
Step-by-Step Guide
- 1
Check your savings pot balance
Contact your retirement fund administrator to check your savings component balance. From 1 September 2024, one-third of new contributions go to your savings pot. Your seed capital (up to R30,000 from vested benefits) may also be available. - 2
Determine your annual taxable income
Your annual taxable income BEFORE the withdrawal is the starting point. This includes salary, business income, rental income, and any other taxable amounts. Check your latest payslip or IRP5. - 3
Add the withdrawal to your income
The two-pot withdrawal is added to your annual taxable income for the year. For example, if you earn R400,000 and withdraw R50,000, your taxable income for tax calculation purposes becomes R450,000. - 4
Calculate the additional tax
Calculate income tax on your total income (R450,000) minus tax on your regular income (R400,000). The difference is the tax on your withdrawal. In this example: tax on R450,000 = ~R95,840, tax on R400,000 = ~R80,340, so withdrawal tax = ~R15,500. - 5
Understand your net payout
Your fund will deduct the tax before paying you. Net payout = withdrawal amount - tax. In our example: R50,000 - R15,500 = R34,500 received. The effective tax rate on the withdrawal is 31%.
Free Tool
Two-Pot Retirement Calculator
Calculate the tax impact of a two-pot retirement fund withdrawal and see your net payout after PAYE.
Frequently Asked Questions
Is the two-pot withdrawal taxed at a flat rate?
No. It's taxed at your marginal income tax rate — the withdrawal is added to your annual taxable income and taxed at whatever bracket it falls into.
What is the minimum two-pot withdrawal?
The minimum withdrawal is R2,000 per tax year from each retirement fund.
How often can I withdraw from the two-pot savings component?
You can make one withdrawal per tax year from each retirement fund you belong to.
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