How South African income tax is worked out
SARS taxes you on your taxable income for the tax year, which runs from 1 March to the end of February. The calculation follows the same steps as your ITR12 assessment:
- Add up gross income: salary, bonus, commission, allowances, fringe benefits, interest, rental profit and freelance income.
- Take off exemptions: the first R23,800 of local interest (R34,500 if you are 65 or older) is tax-free.
- Take off deductions: retirement fund contributions (up to 27.5% of income, capped at R430,000 from 1 March 2026) and a travel claim backed by a logbook.
- Add 40% of your net capital gain after the R50,000 annual exclusion.
- Apply the tax tables to taxable income, then subtract the rebates and medical tax credits.
- Compare with PAYE and provisional tax already paid. More paid than owed means a refund.
2026/27 income tax brackets (2027 tax year)
| Taxable income (R) | Rate of tax (R) |
|---|---|
| 1 to 245,100 | 18% of taxable income |
| 245,101 to 383,100 | 44,118 + 26% of income above 245,100 |
| 383,101 to 530,200 | 79,998 + 31% of income above 383,100 |
| 530,201 to 695,800 | 125,599 + 36% of income above 530,200 |
| 695,801 to 887,000 | 185,215 + 39% of income above 695,800 |
| 887,001 to 1,878,600 | 259,783 + 41% of income above 887,000 |
| 1,878,601 and above | 666,339 + 45% of income above 1,878,600 |
Full tables, rebates and thresholds: SARS tax tables 2026/27.
Tax rebates and tax-free thresholds 2026/27
Everyone gets the primary rebate of R17,820. From 65 there is a secondary rebate of R9,765, and from 75 a tertiary rebate of R3,249. In practice this means you pay no income tax if your taxable income is below R99,000 (under 65), R153,250 (65 to 74) or R171,300 (75 and older).
Worked example
Thandi is 35 and earns R420,000 a year. She contributes R30,000 to a retirement annuity and has a medical aid with two members.
- Taxable income: R420,000 − R30,000 = R390,000
- Tax on the tables: R79,998 + 31% × (R390,000 − R383,100) = R82,137
- Less primary rebate R17,820 and medical credits of R752 × 12 = R9,024
- Income tax for the year: R55,293, about R4,608 a month.
If her employer deducted R60,000 PAYE, she can expect a refund of about R4,700, mostly because of the RA contribution.
Ways to legally pay less tax
- Retirement annuity: every R1,000 you contribute saves you tax at your marginal rate. Try the RA tax saving calculator.
- Tax-free savings account: R46,000 a year (from March 2026) grows free of tax on interest, dividends and gains.
- Keep a logbook if you get a travel allowance: without one SARS won't allow a claim.
- Claim medical expenses not covered by your scheme: they count towards the additional medical credit.
Frequently asked questions
How much tax will I pay on R30,000 a month?
On R360,000 a year with no deductions, tax on the 2026/27 tables is R73,992 less the R17,820 rebate: R56,172 a year or R4,681 a month. UIF of R177.12 is deducted too. Use the salary calculator for your exact take-home pay.
What is the tax-free threshold for 2026/27?
R99,000 if you are under 65, R153,250 from 65 to 74 and R171,300 if you are 75 or older.
When does the 2026/27 tax year start and end?
It runs from 1 March 2026 to 28 February 2027. SARS calls it the 2027 year of assessment. You file the return for it in the 2027 filing season.
Is this the same as what SARS will calculate?
It uses the same SARS tables and formulas as the ITR12 assessment. Differences come from IRP5 codes or deductions not entered here, so always check the eFiling assessment.
Do I have to submit a tax return?
Not if your total employment income is under R500,000 from one employer for the full year, you have no other income (interest under the exemption) and no deductions to claim. Otherwise you must file, and filing is often worth it to get a refund.
Last updated 2026-10-10. Sources: SARS rates of tax for individuals, medical tax credit rates, interest exemption, capital gains tax and the rate-per-kilometre schedule on sars.gov.za.