Bonus Tax Calculator South Africa 2026: 13th Cheque PAYE

Bonus Tax Calculator South Africa 2026/27

Enter your normal monthly salary and the bonus you expect. The calculator uses the 2026/27 tax tables, your age rebate, medical scheme fees tax credits, your retirement contributions and the UIF ceiling. It then shows what you’ll actually receive.

Want your full monthly payslip instead? Use the income tax and PAYE calculator for your take-home pay without the bonus.

How Is a Bonus Taxed in South Africa?

SARS’s FAQ on annual payments lists an annual bonus, an incentive bonus, leave pay paid out on resignation and merit awards as examples. It says they appear on your tax certificate (IRP5) under code 3605. A 13th cheque works the same way.

SARS’s Guide for Employers in respect of Employees’ Tax (2027) sets out the method. Payroll takes the annual equivalent of your normal pay, adds the bonus, and works out the tax on both figures. The difference is the employees’ tax on the bonus:

Two things follow from this. First, the bonus is taxed at the top of your income, so it’s taxed at your marginal rate, not your average rate. Second, all of the bonus tax comes off in one payslip, because the annual payment method deducts it in the month the bonus is paid.

In practice, this method lands close to what you’d pay if the bonus were spread across the year. It’s not an extra tax. Your final tax is set when SARS assesses your return, using the 2026/27 tax brackets on everything you earned.

A note on the law: the 2026/27 tables come from the February 2026 Budget. The 2026 Rates and Monetary Amounts Bill that puts them into law was still a draft as at 6 November 2026. Even so, SARS has applied the new tables to PAYE since 1 March 2026, as it does every year. The Rates Act 3 of 2026 you may see cited is last year’s law, giving effect to the 2025 Budget.

How Do You Calculate Tax on a Bonus? (Step by Step)

1. Annualise your normal monthly payMultiply your normal monthly taxable pay by 12. On R30,000 a month that’s R360,000. SARS calls this the annual equivalent.
2. Work out the tax on that yearApply the 2026/27 tax table, then subtract your rebate (R17,820 under 65) and any medical scheme fees tax credits. On R360,000 the tax is R56,172.
3. Add the bonus and work out the tax againAdd the bonus to the annual figure and repeat the calculation. R360,000 plus a R30,000 bonus is R390,000, and the tax on that is R64,317.
4. Subtract the two figuresThe difference is the PAYE on your bonus. R64,317 minus R56,172 is R8,145, deducted in full in the bonus month.
5. Check UIF and the cash you’ll receiveIf your salary is below R17,712 a month, add 1% UIF on the bonus up to the R177.12 cap. Subtract PAYE and UIF from the bonus to see what lands in your account.

Here’s the bracket maths behind the R8,145. The R360,000 salary sits in the 26% bracket, which ends at R383,100. The first R23,100 of the bonus is taxed at 26% (R6,006) and the last R6,900 crosses into the 31% bracket (R2,139). R6,006 plus R2,139 is R8,145, or 27.2% of the bonus.

So the R30,000 bonus pays out R21,855. UIF is nil here because the salary is already above the R17,712 UIF ceiling.

What if the assumptions change? If you’re 65 or older, or you have medical aid, the bonus PAYE stays R8,145, because rebates and credits cancel out. If R2,000 a month goes to your pension through payroll, the bonus PAYE falls to R7,800, since less of the bonus lands in the 31% bracket.

That’s how to work out tax on a bonus by hand. If you’d like to skip the maths, the bonus calculator above runs the same five steps for you, including rebates for age and medical aid credits.

How Much Tax Will You Pay on Your 13th Cheque?

This table assumes your 13th cheque equals one month’s salary, you’re under 65, and you have no medical aid or retirement deductions. It uses the 2026/27 tables and the R17,712 UIF ceiling.

13th cheque = one month’s gross salary. 2026/27 rates, under 65, no deductions. Calculated with the SARS annual payment method.

Look at the R8,000 row. A year of R8,000 a month is R96,000, below the R99,000 tax-free threshold. The 13th cheque takes the year to R104,000, so only the R5,000 above the threshold is taxed, at 18%. That’s why the PAYE is just R900.

A fixed bonus of R20,000 shows the bracket effect more clearly:

2026/27 rates, under 65, no deductions.

Why Does Your Bonus Feel So Heavily Taxed?

Take the R30,000 example. Normal monthly PAYE is R4,681, which is 15.6% of the salary. In December, PAYE on the payslip jumps to R12,826: the normal R4,681 plus R8,145 on the bonus.

Three things make that feel worse than it is:

• Your monthly PAYE reflects your average rate, which is pulled down by the 18% bracket and the R17,820 rebate. The bonus gets none of that benefit, because it sits on top.
• Part of the bonus can cross into the next bracket. On R30,000 a month, R6,900 of a R30,000 bonus is taxed at 31%.
• All the bonus tax comes out of one payslip, so it’s very visible.

The common myth is that a bonus is taxed at 45%. That’s only true if your income is already above R1,878,600 a year. Another myth is that a bonus pushes your whole salary into a higher bracket. It doesn’t: only the slice above each threshold pays the higher rate.

One thing that catches people out is comparing the bonus with take-home pay. A R30,000 bonus doesn’t add R30,000 to your account. On these figures it adds R21,855.

What Is a 13th Cheque? (13th Cheque vs Bonus)

A 13th cheque is an extra month’s pay, usually paid in November or December. You get 13 payments in a year instead of 12. A performance bonus depends on how you, your team or the business did.

So what’s the difference between a 13th cheque and a bonus for tax? There’s none at all. Both run through the same PAYE calculation and the same 2026/27 tables. The difference is in your employment terms, which decide whether you’re entitled to the payment in the first place.

Some employers use the terms loosely, so read the wording in your contract or policy rather than relying on what the payment is called on your payslip.

How Do You Calculate a Pro Rata 13th Cheque?

The usual formula is:

So R18,000 × 9 ÷ 12 = R13,500. On 2026/27 rates, PAYE on that amount depends on your annual pay, which you can check in the calculator.

Contracts differ in three ways that change the answer:

• The cycle: some run January to December, others run December to November or follow the financial year.
• Resignation: many policies say you only qualify if you’re still employed on the payment date. Others pay a pro rata amount when you leave.
• Basic or total pay: most 13th cheques are based on basic salary, not on allowances or commission.

If you’re leaving before December, ask HR in writing how your bonus will be handled before you hand in your notice. The answer can be worth a full month’s pay.

Is a Bonus Taxed Like Leave Pay or a Severance Package?

When you leave a job, your final payslip can hold several different payments, and SARS taxes them differently. Getting this wrong is common: people expect their whole package to be taxed like a bonus, or the other way round.

Sources: SARS annual payments FAQ, SARS Tax and Retrenchment page, Budget 2026 Tax Guide.

A payment only counts as a severance benefit if your employer paid it because your job was terminated. One of these must also apply: you’re 55 or older, you can’t work because of illness, accident or injury, or your employer is closing or cutting staff. It doesn’t apply if you’ve ever held more than 5% of the company’s shares.

The difference can be large. A R300,000 payment on top of a R30,000 salary would attract R98,335 PAYE as a bonus. As a qualifying severance benefit with no earlier lump sums, it falls inside the R550,000 tax-free amount, so the tax is R0. The R550,000 is a lifetime amount shared with retirement fund lump sums, so earlier withdrawals reduce it.

Does Your Employer Have to Pay a 13th Cheque?

The Basic Conditions of Employment Act sets minimums for leave, hours and notice, but it doesn’t require employers to pay a bonus or 13th cheque. Your right to one comes from:

• Your employment contract, if it promises a 13th cheque or a bonus.
• A company policy or handbook, which can create a right or set the rules for a discretionary bonus.
• A collective agreement or bargaining council agreement in your sector.
• A consistent, long-standing practice, which may create a reasonable expectation of payment, depending on the facts.

If the 13th cheque is contractual, your employer generally can’t stop paying it without your agreement. The Labour Court in Cape Town decided one such case on 4 February 2026: CEPPWAWU obo Members v Avacare Health Group (Pty) Ltd and Another (C438/2024) [2026] ZALCCT 18. The court found that scrapping a contractual 13th cheque without the employees’ agreement was a breach of contract. It ordered the employer to pay the 45 remaining employees their 13th cheque for every year since 2021. It also noted that a contractual 13th cheque must be paid whatever the employer’s financial position.

A discretionary bonus is different. The employer can decide not to pay it, but it still has to apply its own criteria fairly and can’t withhold it for a discriminatory reason. If you think you’ve been unfairly denied a bonus, a dispute usually goes to the CCMA or your bargaining council. This is general information, not legal advice.

Is UIF Deducted From Your Bonus?

UIF is 1% of your remuneration for the month, with the employer paying a further 1%. Contributions stop at a monthly ceiling of R17,712, so the most you’ll pay in any month is R177.12.

That gives two cases:

• Salary at or above R17,712: you already pay R177.12 every month, so the bonus adds no UIF.
• Salary below R17,712: the bonus adds UIF until the month’s pay reaches the ceiling. On R12,000 a month, normal UIF is R120. With a R12,000 bonus the month’s pay is R24,000, UIF hits the cap of R177.12, and the bonus costs R57.12 in UIF.

Commission is excluded from UIF remuneration, but an annual bonus isn’t, which is why it shows up on the bonus payslip. The calculator applies the cap for you. Untick UIF if you don’t contribute, for example if you work fewer than 24 hours a month for that employer.

Do Age and Medical Aid Change the Tax on Your Bonus?

Both your age rebate and your medical scheme fees tax credits come off the tax on your salary and the tax on salary-plus-bonus equally. When you subtract one from the other, they cancel out. That’s why two people on the same salary pay the same bonus tax, even if one has medical aid and the other doesn’t.

One condition applies to medical aid. Payroll can only use your medical credits if your contributions are deducted through payroll or paid by your employer. If you pay your medical aid yourself, you’ll get the credits when SARS assesses your return instead.

The exception is when your tax without the bonus is already nil. Then part of your rebate or credits hasn’t been used, and it absorbs some of the bonus tax:

• On R8,000 a month with no medical aid, the 13th cheque pays R900 PAYE.
• On R8,000 a month with two people on medical aid paid through payroll (R752 a month in credits for 2026/27), the 13th cheque pays R0 PAYE. The unused credits cover it.

The same applies to people 65 and older. The extra rebates (R9,765 from 65 and a further R3,249 from 75) lift the tax-free threshold to R153,250 and R171,300. So smaller bonuses for older employees on modest pay may attract little or no PAYE. You can read more about credits in our medical aid tax credit guide.

How Can You Pay Less Tax on Your Bonus?

The PAYE on the bonus drops from R8,145 to R5,200, a saving of R2,945. You get R14,800 in cash and R10,000 goes into your retirement savings. Without the contribution, that R10,000 would have been taxed at 31% and 26% now. You’ll pay tax on it when you take it out of the fund, often at a lower rate in retirement.

Your options, from most to least effective for the bonus month:

• Payroll contribution: ask HR before the bonus payroll closes to pay part of it into your pension, provident fund or RA. This cuts PAYE in the same month. Since 1 September 2024, a third of new contributions go to your two-pot savings component, which you can access once a tax year, taxed at your marginal rate. See our two-pot retirement guide.
• Private retirement annuity: paying into your own RA by 28 February 2027 still gives a deduction for 2026/27, but PAYE doesn’t change. The saving comes back as a refund after you file. Our retirement tax calculator shows the effect.
• Tax-free savings account: it won’t cut the tax on the bonus, but from 2026/27 you can put in up to R46,000 a year and the growth is tax-free. See the TFSA guide.

Keep an eye on the limit. Your own contributions, your employer’s contributions and the bonus amount together count towards the 27.5% and R430,000 caps for 2026/27. Anything above them is still taxed now and carries forward to later years. The calculator flags this, and warns you if the PAYE would be more than the cash left from the bonus.

Spreading the bonus over 12 months, if your employer offers it, lowers the monthly hit but rarely changes your total tax for the year.

Will SARS Refund Some of Your Bonus Tax?

The bonus method gets PAYE close to your final tax for the year, so the bonus itself rarely creates a large refund. SARS works out your actual tax when it assesses your 2026/27 return in tax season 2027, often through an auto-assessment.

You’re more likely to get money back if:

• You paid into a private retirement annuity that payroll didn’t know about.
• You had large out-of-pocket medical expenses that qualify for the additional medical expenses tax credit.
• You joined your employer during the year, so payroll treated your pay as if you’d earned it for 12 months.

You may owe SARS if you had two employers in the year or income that wasn’t taxed at source. Provisional taxpayers should include the bonus in their second estimate, due by the end of February 2027, to avoid an underestimation penalty. Our guide to IRP6 deadlines and penalties explains how. You can also estimate your position with the tax refund calculator.

Started Your Job This Tax Year? Here’s What Happens to Your Bonus Tax

SARS’s employer guide tells payroll to work out an annual equivalent when you’re employed for only part of the tax year. Your salary PAYE is based on R30,000 × 12, then scaled back to the months you work. The bonus PAYE isn’t scaled back at all.

The refund happens because you get the full R17,820 rebate on assessment, while you only earned six months of salary. The calculator shows this for you: enter the number of months in the “Months you’ll be paid” field.

If you moved from another job in the same tax year, the picture changes. Your two employers each taxed you separately, so you may owe SARS instead. Check both IRP5s when you file.

How Should Employers Process PAYE on a Bonus?

If you run payroll, the bonus month needs a few extra checks. Here’s the process SARS sets out in its Guide for Employers in respect of Employees’ Tax (2027):

• Calculate PAYE with the annual payment method: tax on the annual equivalent of normal pay plus the bonus, minus tax on the annual equivalent alone. Don’t add the bonus to one month’s pay and multiply by 12, which over-deducts.
• Deduct employee UIF of 1% on the bonus, and pay the employer’s 1%, until the month’s pay reaches the R17,712 ceiling.
• Include the bonus in the Skills Development Levy base. SDL is 1% of pay, including bonuses, if your total payroll is expected to exceed R500,000 over 12 months.
• Declare and pay PAYE, UIF and SDL on the EMP201 within seven days after the end of the month. For a December 2026 bonus that’s Thursday 7 January 2027. If the 7th falls on a weekend or public holiday, pay by the last business day before it.
• Report the bonus on the employee’s IRP5 under code 3605 (annual payment), separate from salary.
• For a severance benefit, apply for a tax directive on the IRP3(a) before paying. Don’t run it through the bonus method.

A common payroll mistake is treating a December bonus as normal December pay. That pushes the employee’s monthly PAYE far too high and leads to queries. Most payroll systems have a separate bonus or annual payment item for this reason.

What Are the Most Common Bonus Tax Mistakes?

Comparing the bonus tax with your monthly tax rate

Your monthly PAYE is an average rate. The bonus is taxed at your marginal rate, so it usually looks higher. Check the bonus against the bracket table, not against your normal payslip.

Asking for a retirement contribution too late

Payroll often closes about a week before payday, and December payroll can close earlier. If you want part of your bonus in a retirement fund, ask in November. After the bonus is paid, the PAYE can’t be reversed on that payslip.

Expecting a private RA to cut December PAYE

A debit order into your own RA doesn’t change what payroll deducts. You’ll see the saving as a refund after SARS assesses your return, not in December.

Not checking code 3605 on your IRP5

When tax season 2027 opens, compare the annual payment on your IRP5 with your December payslip. A mismatch can lead to an incorrect auto-assessment. On eFiling, the IRP5 figures are pre-populated, so check them before you accept anything.

Resigning a month too early

Many 13th cheque policies require you to be employed on the payment date. Resigning in October or early November can cost you the whole payment unless your contract provides for pro rata.

What Should You Check Before Your Bonus Is Paid? (Checklist and Tips)

• Read the bonus or 13th cheque clause in your contract or policy, including the cycle and any pro rata rules.
• Run your figures through the bonus tax calculator so you budget with the after-tax amount.
• Decide whether to send part of the bonus to your retirement fund, and tell HR before the December payroll cut-off.
• Check the December payslip: PAYE on the bonus, UIF and any retirement contribution.
• Keep the payslip and compare it with code 3605 on your IRP5 when tax season 2027 opens.
• If you’re a provisional taxpayer, include the bonus in your second IRP6 estimate by the end of February 2027.

Bonus Tax FAQs