Overview of the 2026/2027 Tax Year
The South African tax year runs from 1 March 2026 to 28 February 2027. SARS applies a progressive tax system, meaning higher income is taxed at higher rates. Understanding these tables is essential for employers calculating PAYE, provisional taxpayers estimating their liability, and individuals planning their tax affairs.
The tables below reflect the rates announced in the National Budget Speech. These rates apply to all South African tax residents on their worldwide income, and to non-residents on their South African-sourced income.
Note: The rates shown here are based on the most recently published SARS tax tables. Always verify against the official SARS website for the latest confirmed figures.
Income Tax Brackets for Individuals
South Africa uses seven progressive tax brackets. You only pay the higher rate on income above each threshold — not on your entire income. For example, the first R245,100 of taxable income is always taxed at 18%, regardless of your total income.
| Taxable Income (ZAR) | Rate of Tax |
|---|---|
| R1 – R245,100 | 18% of taxable income |
| R245,101 – R383,100 | R44,118 + 26% of amount above R245,100 |
| R383,101 – R530,200 | R79,998 + 31% of amount above R383,100 |
| R530,201 – R695,800 | R125,599 + 36% of amount above R530,200 |
| R695,801 – R887,000 | R185,215 + 39% of amount above R695,800 |
| R887,001 – R1,878,600 | R259,783 + 41% of amount above R887,000 |
| R1,878,601 and above | R666,339 + 45% of amount above R1,878,600 |
Tax Rebates
Tax rebates directly reduce the amount of tax you owe. They are not deductions from income — they reduce your final tax liability. The primary rebate applies to all taxpayers, with additional rebates for taxpayers aged 65 and over.
| Rebate Type | Annual Amount |
|---|---|
| Primary rebate (all taxpayers) | R17,820 |
| Secondary rebate (65 and older) | R9,765 |
| Tertiary rebate (75 and older) | R3,249 |
Tax Thresholds
If your taxable income is below the tax threshold for your age group, you do not need to pay income tax or submit a return (although submission may still be required in certain circumstances).
| Age Group | Annual Threshold |
|---|---|
| Under 65 | R99,000 |
| 65 to 74 | R153,250 |
| 75 and older | R171,300 |
Medical Tax Credits (Section 6A)
If you or your employer contribute to a medical scheme, you qualify for monthly medical tax credits that reduce your PAYE or annual tax liability. These are available regardless of age.
| Members | Monthly Credit |
|---|---|
| Main member | R376 |
| Main member + 1 dependant | R752 |
| Each additional dependant | R254 per dependant |
Retirement Fund Contribution Deductions
Contributions to pension funds, provident funds, and retirement annuity funds are tax deductible. The deduction is limited to the lesser of:
- 27.5% of the greater of remuneration or taxable income (before the retirement deduction) - R430,000 per year (increased from R350,000 effective 1 March 2026)
This applies to the combined total of all retirement fund contributions (employer and employee contributions). Contributions exceeding the annual limit carry forward to future tax years.
For employers calculating PAYE, only the employee's own contributions (plus any employer contributions that are a taxable fringe benefit) count toward this deduction.
UIF and SDL Rates
Unemployment Insurance Fund (UIF) contributions are 2% of an employee's remuneration — 1% from the employee and 1% from the employer. The maximum monthly earnings ceiling for UIF is R17,712, meaning the maximum monthly UIF contribution is R177.12 per party.
The Skills Development Levy (SDL) is 1% of the total payroll, payable by the employer only. Employers with an annual payroll below R500,000 are exempt from SDL.
Interest and Dividends Exemptions
South African residents receive partial exemptions on interest income:
- Under 65: First R23,800 of interest income is exempt - 65 and older: First R34,500 of interest income is exempt
South African dividends are subject to Dividends Tax at 20%, withheld at source by the company paying the dividend. Foreign dividends received by SA residents are included in taxable income but qualify for exemptions and rebates to avoid double taxation.
Capital Gains Tax (CGT)
Capital gains are included in taxable income at an inclusion rate of 40% for individuals and 80% for companies and trusts. The annual exclusion for individuals is R50,000 (R440,000 in the year of death).
This means if you make a R100,000 capital gain, only R20,000 is added to your taxable income (R100,000 less R50,000 exclusion = R50,000, multiplied by 40% inclusion rate). This amount is then taxed at your marginal income tax rate.
How to Use These Tables
For employers: Use these tables to calculate monthly PAYE deductions for employees. Our free PAYE Calculator and Salary Calculator automate this process using the exact rates above.
For provisional taxpayers: Use the brackets and rebates to estimate your annual tax liability for IRP6 submissions.
For individuals: Check whether your income falls below the tax threshold, calculate your expected tax refund or liability, and plan retirement contributions for optimal tax efficiency.
All rates should be verified against the official SARS website. Tax laws can change through legislation during the year.