Calculating your income tax in South Africa

Calculating your income tax in South Africa

Tax Services Port Elizabeth

South Africa income tax is governed by the Income Tax Act South Africa and collected by the South African Revenue Service (SARS). All residents living and working in South Africa are typically liable to pay income tax in South Africa, although how much SARS income tax you must pay depends on your tax residency status and earning amount.

South African income tax is levied on residents’ worldwide income, with appropriate relief to avoid double taxation for certain foreigners, plus exemptions and allowable deductions as per the Act. Non-residents, however, are only taxed on their income from South African sources.

This detailed guide covers the main aspects of individual income tax in South Africa, including who must pay South African income tax, income tax brackets, SARS income tax deadlines, income tax deductions and allowances, SARS income tax calculators and how to fill out your South African tax return.

Who has to pay income tax in South Africa?

South Africa operates on a residency-based taxation system, meaning that residents (whether permanent or temporary) pay tax on their worldwide incomes. Residents are those with citizenship or residence permits, but you are also considered a resident for tax purposes if you have been living in South Africa for more than 91 days in total in each of the last five tax years, or at least 915 days in total across those five years.

What earnings are subject to SARS income tax? 

SARS income tax applies to the following type of earnings:

  • employment income including salaries, bonuses, overtime and taxable benefits and allowances (in most cases deducted from wage payments by employers through a pay-as-you-earn or PAYE scheme)
  • profits or losses from a business or self-employed trade
  • director’s fees
  • rental income
  • investment income such as interest or dividends
  • annuities
  • royalties
  • pension income (excluding foreign pensions)
  • certain capital gains

There is also an additional dividends tax in South Africa imposed on dividends payments to shareholders at the rate of 20% (this increased from 15% in February 2017). This is a separate tax that is withheld from the dividend payment by the company making the payment.

We provide professional and efficient tax services for all your personal or business tax needs.

We will sort out your tax for you – accurately and timeously – and remove the risk of penalties and legal action.

 

2018-09-18T10:49:11+00:00 Latest News|

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