South African VAT Calculator —
Add or Extract 15% VAT
Value-Added Tax in South Africa is levied at 15% under the Value-Added Tax Act 89 of 1991, administered by SARS. Compulsory registration is required when taxable supplies exceed R2,300,000 in any 12-month period — doubled from R1,000,000 by Budget 2026. Section 20 prescribes three tiers of tax invoice based on transaction value.
VAT Rate
15%
Since 1 Apr 2018
Compulsory Reg.
R2.3M
Budget 2026 · was R1M
Voluntary Reg.
R120k
Budget 2026 · was R50k
Tier 2 Invoice
R51–R5k
Abridged · s20 VAT Act
Full Invoice
>R5,000
10 fields required
Invoice Window
21 days
From date of supply
VAT in South Africa
What is VAT and how does it work in South Africa?
Value-Added Tax is an indirect tax levied on the value added at each stage of a supply chain — from manufacturer to wholesaler to retailer to end consumer. Under the Value-Added Tax Act 89 of 1991, VAT is levied at 15% on the supply of goods and services by registered vendors in South Africa. The rate has been unchanged since 1 April 2018, when it was raised from 14% in that year's Budget — the first rate change since 1 July 1993 when it rose from 10% to 14%.
The mechanism works through input and output VAT. A registered vendor charges output VAT on its taxable supplies to customers. The same vendor claims input VAT on qualifying goods and services purchased for business use. The VAT return calculates the net position: if output VAT exceeds input VAT, the difference is paid to SARS. If input VAT exceeds output VAT — common for exporters and capital-intensive businesses — SARS owes the vendor a refund.
Most businesses file bi-monthly VAT returns. Businesses with taxable supplies above R30,000,000 per year file monthly. Newly registered vendors may be placed on monthly filing for an initial period. Returns are submitted on eFiling or via a SARS branch, with payment due on the last business day of the month following the tax period.
VAT registration threshold doubled — what this means for your business
Budget 2026 made the most significant change to VAT registration thresholds in years. The compulsory registration threshold was doubled from R1,000,000 to R2,300,000 in taxable supplies per any consecutive 12-month period.
The voluntary registration minimum was raised from R50,000 to R120,000. This means sole proprietors, freelancers, and micro-enterprises with limited turnover now have a higher floor before voluntary registration is permitted.
Practical implication: Businesses that registered compulsorily because their turnover exceeded R1,000,000 but is below R2,300,000 should assess whether deregistration is appropriate. De-registering removes the compliance obligation but also eliminates the ability to claim input VAT — which can be material for capital-intensive or high-expense businesses. A tax adviser should model both scenarios before deregistering.
VAT Calculator
Calculate South African VAT at 15%
Select whether your amount is VAT-exclusive (you need to add VAT) or VAT-inclusive (you need to extract VAT). The Section 20 invoice tier is shown automatically based on the VAT-inclusive transaction value. A live preview calculates instantly as you type — the server result confirms with full statutory context.
Enter the amount before VAT — 15% VAT will be added to arrive at the invoice total.
Zero-Rated vs Exempt
The most important VAT distinction in South Africa: zero-rated vs exempt
The difference between zero-rated and exempt supplies is one of the most consequential distinctions in South African VAT — and one of the most commonly misunderstood. Both result in no VAT being charged to the customer, but the treatment of input VAT on related expenses is entirely different.
Zero-rated supplies — 0% VAT charged, input VAT claimable
The supply is taxable — just at 0%. The vendor charges no VAT on the sale but can still claim all input VAT on qualifying business expenses.
Examples under Schedule 2 of the VAT Act:
- · Exports of goods (VAT Act s11(1))
- · Basic foodstuffs (brown bread, fresh vegetables, milk, eggs)
- · Illuminating paraffin (domestic use)
- · Certain agricultural supplies
- · International transport services
Result: Exporters often receive VAT refunds because input VAT > output VAT (which is zero).
Exempt supplies — outside VAT entirely, no input VAT claimable
The supply is not subject to VAT. No output VAT is charged. But critically, no input VAT can be claimed on related business costs — the VAT paid becomes a dead cost to the business.
Examples under Section 12 of the VAT Act:
- · Residential rental (s12(b))
- · Financial services — loans, deposits, life insurance (s12(a))
- · Public road and rail passenger transport (s12(g))
- · Educational services from public institutions (s12(h))
Result: Banks, landlords, and insurers cannot reclaim input VAT on their operating costs.
Section 20 — Tax Invoices
The Section 20 three-tier tax invoice system explained
Section 20 of the VAT Act prescribes three categories of VAT documentation, determined entirely by the VAT-inclusive value of the transaction. A vendor who issues the wrong tier of invoice — or fails to issue one at all — risks disallowance of the recipient's input VAT claim, and may face administrative penalties. The 21-day rule applies across all tiers: the invoice must be issued within 21 calendar days of the date on which the taxable supply was made.
The 10 required fields for a full tax invoice are: (1) the words "Tax Invoice" prominently displayed; (2) supplier's name and address; (3) supplier's VAT registration number (10 digits, starting with 4); (4) a unique sequential invoice number; (5) the date of issue; (6) recipient's name and address; (7) recipient's VAT registration number; (8) a description of goods or services supplied; (9) the quantity or volume; (10) the value of supply and the amount of VAT charged — or a statement that the consideration includes VAT and the rate applicable.
For an abridged invoice (R51–R5,000), fields 6, 7, and 9 are not required. The most common error in practice is issuing an abridged invoice for a transaction above R5,000, which is fatal to the recipient's input VAT claim.
Calculation Method
How to calculate South African VAT — the formula and the logic
Adding VAT to a VAT-exclusive amount
Multiply the VAT-exclusive amount by 0.15 to calculate the VAT component. Add the VAT to the original to get the VAT-inclusive (customer-pays) amount. Formula: VAT-inclusive = VAT-exclusive × 1.15. The factor 1.15 represents 100% of the price plus 15% VAT. Example: R8,700 × 1.15 = R10,005 VAT-inclusive. VAT component: R10,005 − R8,700 = R1,305.
Extracting VAT from a VAT-inclusive amount
Divide the VAT-inclusive amount by 1.15 to get the VAT-exclusive amount. The VAT component is the difference. Formula: VAT-exclusive = VAT-inclusive ÷ 1.15. Example: R10,005 ÷ 1.15 = R8,700 VAT-exclusive. VAT component: R10,005 − R8,700 = R1,305. Note: dividing by 1.15 is mathematically equivalent to multiplying by 100/115, which simplifies to 20/23.
Determining the invoice tier (Section 20)
The correct invoice tier is determined by the VAT-inclusive value of the supply — not the exclusive value. Use the VAT-inclusive total after step 1 or 2 to determine whether no invoice, an abridged invoice, or a full tax invoice is required. The calculator above shows the applicable tier automatically.
Calculating the net VAT position for a VAT return
A vendor's VAT return reports total output VAT (VAT charged on sales during the period) and total input VAT (VAT paid on qualifying purchases). The net payment to SARS is output VAT minus input VAT. If input exceeds output — a refund position — SARS is obligated to pay the refund within 21 business days of the return being assessed, failing which SARS pays interest at 10.25% per annum (the prescribed rate) on the refund.
Worked Example
A South African service business invoices R57,500 VAT-inclusive
A marketing consultancy charges a corporate client R57,500 all-inclusive for a campaign. The client is a registered VAT vendor who will claim the input VAT. The consultancy needs to know: what is the VAT component, what is the net amount, what invoice type is required, and how to correctly record both lines.
const VAT_TERMINAL_FIX = (Common Mistakes
Four VAT mistakes that cost South African businesses money
1. Treating exempt supplies the same as zero-rated
This is the single most expensive VAT error in practice. A property management company that believes residential rental is zero-rated claims input VAT on maintenance costs, repairs, and agent fees. It is not zero-rated — it is exempt under Section 12(b). No input VAT may be claimed on expenses directly related to exempt supplies. The VAT paid on those costs is a dead loss. SARS will disallow the input claims with interest and penalties on audit.
2. Issuing an abridged invoice above R5,000
The Section 20 threshold for a full tax invoice is R5,000 VAT-inclusive — not R5,000 exclusive. A vendor who issues an abridged invoice (missing recipient VAT number and quantity) for a R5,800 VAT-inclusive transaction has issued a defective invoice. The recipient cannot claim input VAT on a defective invoice. The vendor must issue a corrected full tax invoice. If the financial year has closed and the return submitted, a debit and credit note sequence under Section 21 is required.
3. Missing the 21-day invoice issuance window
Section 20 requires a tax invoice to be issued within 21 calendar days of the date of supply — not the payment date, not month-end. A consultant who completes work on 10 June must issue the invoice by 1 July. A late invoice does not affect the vendor's output VAT obligation (it is triggered by the time of supply rules) but a recipient cannot claim input VAT until a valid invoice is held. Late invoices can distort VAT periods and trigger queries on reconciliation.
4. Not reviewing registration status after Budget 2026
The compulsory registration threshold doubled from R1,000,000 to R2,300,000 in Budget 2026. Businesses that registered under the old threshold with turnover between R1,000,000 and R2,300,000 can now apply to deregister — eliminating the compliance burden. However, deregistering means losing the ability to claim input VAT, which may be more valuable than the compliance cost savings. This trade-off requires careful modelling before a deregistration application is submitted.
Frequently Asked Questions
South African VAT — practitioners' questions answered
What is the VAT rate in South Africa in 2026?
The South African VAT rate is 15%, effective 1 April 2018 under the Value-Added Tax Act 89/1991. It was increased from 14% in the 2018 Budget — the first rate change since 1993. The rate remained unchanged through Budget 2026/27. To add VAT: multiply by 1.15. To extract VAT: divide by 1.15.
When does a business have to register for VAT in South Africa?
Compulsory registration is triggered when taxable supplies in any consecutive 12-month period exceed R2,300,000 — doubled by Budget 2026 from the previous R1,000,000 threshold. Voluntary registration is permitted from R120,000. Once the threshold is exceeded, the business must register within 21 days of the end of the month in which the threshold was crossed.
What is the difference between zero-rated and exempt VAT supplies in South Africa?
Zero-rated supplies are taxable at 0% — the vendor charges no VAT but can still claim input VAT on related expenses. Exports and basic foodstuffs are zero-rated. Exempt supplies — residential rental, financial services, public transport — fall outside VAT entirely: no VAT is charged and no input VAT can be claimed on related costs. Misclassifying exempt supplies as zero-rated and claiming input VAT is a common audit trigger.
What are the required fields on a South African VAT invoice?
A full tax invoice (for supplies above R5,000 VAT-inclusive) requires 10 fields under Section 20 of the VAT Act: the words 'Tax Invoice'; supplier name and address; supplier VAT registration number (10 digits, starting with 4); a unique sequential invoice number; date of issue; recipient name and address; recipient VAT number; description of goods or services; quantity or volume; and the value of supply with VAT shown separately or a statement that the price includes VAT at 15%.
Can a business claim input VAT on expenses related to zero-rated supplies?
Yes. Input VAT on expenses related to zero-rated supplies is fully claimable. This is the defining advantage of zero-rating over exemption. An exporter who charges 0% VAT on sales still claims input VAT on raw materials, transport, overheads, and other qualifying business costs — often resulting in a VAT refund position. SARS is obligated to refund excess input VAT within 21 business days of assessment.
What changed about South African VAT registration in Budget 2026?
Budget 2026 doubled the compulsory VAT registration threshold from R1,000,000 to R2,300,000 in taxable supplies per any consecutive 12-month period. The voluntary registration minimum was more than doubled from R50,000 to R120,000. Businesses with turnover between R1,000,000 and R2,300,000 may now consider deregistering, but should first model whether the loss of input VAT claims outweighs compliance cost savings.
How long does a business have to issue a VAT invoice in South Africa?
A VAT invoice must be issued within 21 calendar days of the date on which the taxable supply was made — per Section 20 of the VAT Act. The date of supply is determined by the time of supply rules in Section 9: generally the earlier of the date an invoice is issued, payment is received, or goods are delivered / services completed. Late invoicing does not defer the vendor's output VAT liability but does prevent the recipient from validly claiming input VAT in the correct period.
What is the format of a South African VAT registration number?
South African VAT registration numbers are 10 digits long and must begin with the digit 4. SARS issues VAT numbers in this format upon successful registration. Vendors must display their VAT registration number on all tax invoices. Recipients of invoices should verify the format before claiming input VAT — a number that does not start with 4 or is not 10 digits is invalid, and input VAT claims based on such invoices may be disallowed.
Related Tools
Other VAT and business compliance tools
VAT Position Calculator
Assess your VAT registration status — compulsory, voluntary, or not required — and model your output/input VAT position.
VAT Invoice Checker
Verify a tax invoice against the Section 20 ten-field checklist. Confirm VAT number format and invoice tier compliance.
SARB Rates
SARS VAT refund interest rate (10.25%) and late payment interest — relevant for VAT return planning.
SBC Tax Calculator
Compare Small Business Corporation tax rates vs standard 27% vs turnover tax — for registered and non-registered VAT vendors.
Wandile Lokwe
FAIS Key Individual · CenturionAI (Pty) Ltd · 20 years South African financial services
Last updated: June 2026 · Figures as at Budget 2026/27 · VAT rate unchanged since 1 April 2018 · Registration threshold updated: Budget 2026 · Next review: Budget 2027 (February 2027)