💰 Income Tax · 2026/27 Updated
Income Tax South Africa 2026: SARS Calculator Guide
Updated 2026/2027 tax brackets, rebates, worked examples and free SARS-aligned calculators — everything you need to calculate your income tax correctly.
2026/2027 Tax Brackets Now Live
SARS adjusted income tax brackets by 3.4% for inflation — the first inflationary relief since 2023/24. Tax-free threshold under 65 increased to R99,000 (from R95,750). Primary rebate: R17,820. New brackets effective 1 March 2026.
Written & Reviewed by: Jack · TaxPlanners
All rates, brackets and rebates sourced from the SARS official tax rates page and Budget 2026 documentation. Worked examples verified against the SARS tax tables.
SARS Sourced
2026/27 Updated
Worked Examples
Free Calculators
R99K
Tax-free threshold (under 65)
18–45%
Tax bracket range
R17,820
Primary rebate 2026/27
7
Tax brackets
What Is Income Tax and Who Must Pay It in South Africa?
Short answer: Income tax is a progressive tax paid to SARS on all income you earn — salary, freelance, rental, interest and foreign income. You must register and pay if your annual income exceeds the tax threshold: R99,000 if you are under 65. South African residents are taxed on worldwide income.
South Africa operates a progressive tax system — the more you earn, the higher the percentage of tax you pay on the portion of income above each bracket. This ensures lower earners pay proportionally less than higher earners.
Who must register as a taxpayer and pay income tax:
- South African residents earning above the annual tax threshold
- Non-residents earning South Africa-sourced income
- Self-employed individuals with annual income above R30,000 from non-salary sources
- Employees whose employer deducts PAYE (Pay-As-You-Earn) monthly
- Companies and trusts operating in South Africa
- Individuals earning rental income, interest, dividends or freelance income
The current 2026/2027 tax year runs from 1 March 2026 to 28 February 2027. Individual tax returns are due between July and October/November 2026. For help with registration, see our SARS eFiling registration guide.
What Are the Income Tax Brackets for 2026/2027?
Short answer: South Africa has 7 income tax brackets for 2026/2027, ranging from 18% on income up to R245,100 to 45% on income above R1,878,600. Brackets were adjusted 3.4% for inflation — the first such adjustment since 2023/24. You only pay each rate on the portion of income within that band, not on your total income.
| Taxable Income (R) | Rate | Tax Formula |
|---|---|---|
| R0 – R245,100 | 18% | 18% of taxable income |
| R245,101 – R383,100 | 26% | R44,118 + 26% above R245,100 |
| R383,101 – R530,200 | 31% | R79,998 + 31% above R383,100 |
| R530,201 – R695,800 | 36% | R125,599 + 36% above R530,200 |
| R695,801 – R887,000 | 39% | R185,215 + 39% above R695,800 |
| R887,001 – R1,878,600 | 41% | R259,783 + 41% above R887,000 |
| R1,878,601 and above | 45% | R666,339 + 45% above R1,878,600 |
Source: SARS — Rates of Tax for Individuals. Tax year 1 March 2026 to 28 February 2027.
Important: These are marginal rates — you only pay each rate on the slice of income within that bracket. A taxpayer earning R400,000 does not pay 31% on the full amount — only on the R16,900 above R383,100. See Section 4 for worked examples.
What Are the Tax Rebates and Tax-Free Thresholds for 2026?
Short answer: The primary rebate of R17,820 applies to all individual taxpayers and directly reduces your tax bill. Because of this rebate, you effectively pay no income tax if you earn below R99,000 per year (under 65). The threshold increases to R153,250 for those aged 65–74 and R171,300 for those 75 and older.
R17,820
Primary Rebate
All taxpayers · threshold R99,000
R9,765
Secondary Rebate
Age 65–74 · threshold R153,250
R3,249
Tertiary Rebate
Age 75+ · threshold R171,300
Rebates are not deductions — they directly reduce the tax you owe after applying the bracket rates. The primary rebate of R17,820 divided by the 18% entry rate equals R99,000, which is why the tax-free threshold is that amount. If your calculated tax is less than R17,820, you pay nothing.
Medical aid tax credits further reduce your tax liability after rebates are applied:
- R364/month for the main medical aid member
- R364/month for the first dependent
- R246/month for each additional dependent
A family of four on medical aid (main member + 3 dependents) saves R364 + R364 + R246 + R246 = R1,220/month (R14,640/year) in direct tax credits, regardless of income level.
How Do You Calculate Your Income Tax Step by Step?
Short answer: Find your taxable income (gross income minus deductions), apply the bracket formula from the table, subtract the applicable rebate. The result is your annual tax. Divide by 12 for monthly PAYE. Three worked examples below show the calculation at different salary levels for 2026/2027.
The 4-step calculation process:
- 1Calculate Gross IncomeAdd all income sources: salary, bonuses, rental income, freelance earnings, interest and dividends, foreign income and pension payments.
- 2Subtract Allowable DeductionsDeduct retirement fund contributions (up to 27.5% or R350,000), qualifying travel expenses, home office costs and PBO donations (up to 10% of taxable income). This gives you Taxable Income.
- 3Apply the Tax TableFind your bracket. Use the base tax figure and add the marginal rate on income above the bracket floor. This gives Tax Before Rebates.
- 4Deduct Rebates and Medical CreditsSubtract your age-based rebate (R17,820 for under 65) and monthly medical aid tax credits. The result is your annual tax liability.
Worked examples — 2026/2027 tax year, taxpayer under 65:
📌 R250,000 salary
Band 2 — 26% marginal
Band 2 — 26% marginal
Tax on first R245,100R44,118
26% on R4,900R1,274
Tax before rebateR45,392
Less primary rebate−R17,820
Annual taxR27,572
Monthly taxR2,298
Effective rate: 11.0%
📌 R500,000 salary
Band 3 — 31% marginal
Band 3 — 31% marginal
Base tax (Band 3)R79,998
31% on R116,900R36,239
Tax before rebateR116,237
Less primary rebate−R17,820
Annual taxR98,417
Monthly taxR8,201
Effective rate: 19.7%
📌 R1,200,000 salary
Band 6 — 41% marginal
Band 6 — 41% marginal
Base tax (Band 6)R259,783
41% on R313,000R128,330
Tax before rebateR388,113
Less primary rebate−R17,820
Annual taxR370,293
Monthly taxR30,858
Effective rate: 30.9%
What Deductions and Credits Can Reduce Your Tax?
Short answer: The biggest tax deductions are retirement fund contributions (up to 27.5% of taxable income or R350,000), business travel expenses, home office costs and PBO donations. Medical aid tax credits reduce tax directly — not just taxable income. Maximising retirement contributions is the most effective legal way to reduce your annual tax bill.
| Deduction / Credit | Limit | Effect |
|---|---|---|
| Retirement fund contributions | 27.5% of taxable income or R350,000 | Reduces taxable income |
| Medical aid tax credits | R364/R364/R246 per month | Reduces tax directly |
| Travel allowance | Business km only, with logbook | Reduces taxable income |
| Home office expenses | Proportional % of home used | Reduces taxable income |
| PBO donations | Up to 10% of taxable income | Reduces taxable income |
| Tax-Free Savings (TFSA) | R36,000/year, R500,000 lifetime | Tax-free growth |
Retirement contribution example: Earning R600,000 and contributing R165,000 (27.5%) to a retirement annuity drops your taxable income to R435,000 — shifting you from the 36% bracket to the 31% bracket and saving approximately R33,000 in annual tax.
Travel allowances require a detailed logbook recording date, destination, purpose and kilometres for every business trip. Without a logbook, SARS disallows the claim. The prescribed rate for 2026 is approximately R4.84 per kilometre for business travel.
For more on PAYE tax rates across all income levels, see our SA tax brackets guide. For assets like property and shares, Capital Gains Tax (CGT) applies separately — see Section 8 for details.
How Does PAYE Work for Salaried Employees?
Short answer: PAYE (Pay-As-You-Earn) is the monthly tax your employer deducts from your salary and pays directly to SARS. Your employer calculates your expected annual income, applies the tax table, divides by 12, and deducts that amount monthly. You receive an IRP5 at year-end showing all PAYE paid — use it to file your annual return and claim any refund.
- 1Employer calculates annual expected incomeYour employer multiplies your monthly salary by 12 and adds any expected bonuses and allowances to get your projected annual taxable income.
- 2Tax is calculated using SARS tablesThe employer applies the 2026/2027 tax bracket formula, deducts the primary rebate, and divides by 12 to get your monthly PAYE deduction.
- 3PAYE is paid to SARS monthlyYour employer submits the deducted PAYE to SARS by the 7th of the following month. Your payslip shows gross salary, PAYE deducted and net take-home pay.
- 4IRP5 issued at tax year-endAfter 28 February each year, your employer issues an IRP5 certificate showing total remuneration, PAYE deducted, retirement contributions and medical aid. This is your primary document for filing your annual tax return.
If you changed jobs mid-year, received a large bonus, or had significant deductions your employer did not account for, your PAYE may be over- or under-deducted. Filing your annual return reconciles this — if SARS owes you money, you get a refund.
Who Must Pay Provisional Tax in South Africa?
Short answer: You must register as a provisional taxpayer if you earn more than R30,000 per year from sources other than a salary — including freelance income, rental income, investment returns or directors’ fees. Provisional taxpayers make two advance tax payments per year: by end of August and end of February. Underestimating triggers SARS penalties.
Who qualifies as a provisional taxpayer:
- Self-employed individuals and sole proprietors
- Company directors earning directors’ fees
- Freelancers with annual non-salary income above R30,000
- Rental property owners
- Investors earning significant interest, dividends or capital gains
- Individuals earning foreign income above the threshold
| Payment | Deadline | Basis |
|---|---|---|
| First provisional (IRP6) | Last business day of August | Estimated income for first 6 months |
| Second provisional (IRP6) | Last business day of February | Estimated full-year income |
| Voluntary third payment | With annual return (July–Jan) | Top-up to avoid interest |
If you underestimate your provisional tax by more than 20% of the actual tax assessed, SARS charges a 20% penalty plus interest. Estimate conservatively — it is better to overpay and receive a refund than to face penalties. For more on simplified tax options for small businesses, read our Turnover Tax South Africa guide.
How Can You Reduce Your Tax Bill Legally in South Africa?
Short answer: The three most effective legal strategies are maximising retirement contributions (up to 27.5% of taxable income or R350,000 per year — saving up to R143,500 in tax at the 41% top bracket), using your R36,000 tax-free savings allowance, and claiming all eligible deductions before year-end (28 February). Strategic timing of bonuses and income can also move you into a lower bracket.
- Max out retirement contributions: Contribute 27.5% of taxable income — at a R600,000 salary this saves roughly R33,000 in tax per year at the 36% marginal rate
- Use your TFSA allowance: R36,000 per year into a Tax-Free Savings Account grows tax-free — no CGT, no dividends tax, no interest tax on withdrawal
- Claim medical aid credits: Ensure all dependents are correctly registered on your plan — each dependent saves R364 or R246/month directly off your tax bill
- Keep a travel logbook: Business kilometres are deductible — without a logbook the claim is disallowed
- Donate to registered PBOs: Donations are deductible up to 10% of taxable income — at the 31% bracket, R10,000 donated saves R3,100 in tax
- Defer income to a lower-earning year: If possible, shift bonuses or project income to a tax year where you expect lower overall earnings
Cryptocurrency is treated as an asset by SARS — profits from trading are taxed as income, and investment gains are subject to Capital Gains Tax. All crypto transactions must be declared. See our Crypto Tax South Africa guide for full details.
How Do You File Your Tax Return on SARS eFiling?
Short answer: Log into SARS eFiling, navigate to Returns → File Return, verify auto-populated data from your IRP5, add any additional income and deductions, review and submit. SARS auto-assesses many straightforward taxpayers — if you receive an auto-assessment and agree with it, no action is needed. If you disagree, you can edit and resubmit within 40 business days.
- 1Gather your documentsIRP5 from employer, medical aid certificate, retirement annuity certificate, investment statements (IT3b for interest, IT3c for dividends), travel logbook if claiming travel allowance.
- 2Log into eFiling and open your returnGo to sarsefiling.co.za, navigate to Returns → Returns History → File Return. SARS auto-populates data from third-party sources — verify each figure against your documents.
- 3Declare all income and claim deductionsAdd any income not in the auto-populated data — freelance income, rental income, foreign income, crypto gains. Then claim all eligible deductions: retirement contributions, travel expenses, home office costs, medical out-of-pocket expenses above the credit threshold.
- 4Review, submit and check your assessmentReview every field carefully before submitting — errors trigger audits and delays. After submission, SARS issues an ITR12 assessment. Query any discrepancy within 30 business days using a Request for Correction (RFC).
Key deadline: For salaried employees, the 2026 filing season typically opens in July 2026 and closes in October/November 2026. Provisional taxpayers have until January 2027. Always confirm exact dates on sars.gov.za — dates shift slightly year to year. Our eFiling step-by-step guide covers the full registration process.
When Do You Get a Tax Refund from SARS?
Short answer: You get a refund when your total PAYE or provisional tax payments exceed your actual tax liability for the year. SARS pays refunds directly into your nominated bank account — within 72 hours to 21 days for auto-assessments and 21 to 30 business days for standard returns. Ensure your banking details on eFiling are correct before submitting.
Common situations that result in a SARS refund:
- Your employer over-deducted PAYE during the year
- You changed jobs mid-year and tax was calculated incorrectly on IRP5s
- You claimed significant deductions (retirement, travel, home office) not factored into PAYE
- You made excess provisional tax payments
- You received a large medical out-of-pocket expense qualifying for additional credits
| Return Type | Refund Timeline |
|---|---|
| Auto-assessment (agreed) | 72 hours to 21 days |
| Standard self-filed return | 21 to 30 business days |
| Complex return or audit | Up to several months |
If your refund is delayed, possible causes are: outstanding returns from prior years, SARS verification or audit review, a tax debt being offset against the refund, or incorrect banking details on file. Check your refund status on eFiling under “Returns” → “Notices/Letters” or contact SARS directly on 0800 00 7277.
You can claim refunds for returns up to five years retrospectively — if you have unclaimed deductions from previous years, submit those returns promptly.
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Frequently Asked Questions — Income Tax South Africa
What is the income tax threshold in South Africa for 2026/2027?+
For 2026/2027, you pay no income tax if you earn below R99,000 (under 65), R153,250 (age 65–74) or R171,300 (age 75+). These thresholds increased from R95,750, R148,217 and R165,689 respectively after the 3.4% inflationary bracket adjustment in Budget 2026.
What are the income tax brackets for 2026/2027 in South Africa?+
Seven brackets: 18% on up to R245,100 | 26% on R245,101–R383,100 | 31% on R383,101–R530,200 | 36% on R530,201–R695,800 | 39% on R695,801–R887,000 | 41% on R887,001–R1,878,600 | 45% above R1,878,600. These are marginal rates — you only pay each rate on the slice of income within that band.
How much income tax do I pay on R500,000 in South Africa?+
On R500,000 taxable income (2026/2027): base tax R79,998 + 31% on R116,900 = R116,237 total before rebate. Minus primary rebate R17,820 = R98,417 annual tax (R8,201/month). Effective rate: 19.7%.
What is the primary rebate for income tax in South Africa 2026?+
The primary rebate for 2026/2027 is R17,820. This applies to all individual taxpayers and directly reduces your calculated tax. The secondary rebate (65–74) is an additional R9,765. The tertiary rebate (75+) is an additional R3,249.
How does PAYE work in South Africa?+
Your employer estimates your annual income, calculates the tax using SARS tables, divides by 12 and deducts that amount from your monthly salary. PAYE is paid to SARS by the 7th of the following month. You receive an IRP5 at year-end — use it to file your annual return and claim any overpayment as a refund.
What deductions reduce taxable income in South Africa?+
Main deductions: retirement fund contributions (up to 27.5% of taxable income or R350,000), travel allowance (business km with logbook), home office expenses (proportional share for a dedicated workspace), and registered business expenses. Donations to PBOs are deductible up to 10% of taxable income.
Who must register for provisional tax in South Africa?+
You must register as a provisional taxpayer if you earn more than R30,000 per year from non-salary sources — freelance, rental, investment income or directors’ fees. Two advance payments are required: by end of August and end of February. Underestimating by more than 20% triggers a SARS penalty.
How do I claim a tax refund from SARS in South Africa?+
File your annual return on SARS eFiling, declare all income and claim all deductions. If PAYE or provisional tax paid exceeds your assessed tax, SARS refunds the difference to your nominated bank account — 72 hours to 21 days for auto-assessments, 21–30 business days for standard returns.
What is the medical aid tax credit for 2026/2027?+
Medical aid tax credits: R364/month for the main member, R364/month for the first dependent, R246/month for each additional dependent. These credits reduce your final tax — not just taxable income — and apply regardless of your income level.
How much can I contribute to a retirement annuity for tax purposes?+
You can deduct retirement contributions of up to 27.5% of your taxable income or R350,000 per year, whichever is lower. Excess contributions carry over to future tax years. At a R600,000 salary, contributing R165,000 saves approximately R33,000 in annual tax at the 36% marginal rate.
Disclaimer: This guide is for general informational purposes only and does not constitute professional tax advice. Tax laws change — always verify current rates on sars.gov.za or consult a registered tax practitioner. TaxPlanners is not a registered tax practitioner.
