MODULE 2
Personal Tax
South African personal tax is levied on individuals under the Income Tax Act 58 of 1962, administered by SARS, and structured around a seven-bracket progressive table updated annually after the February Budget. These eight tools encode the exact current-year figures – no estimates, no approximations – grounded in the Budget 2026/27 Tax Pocket Guide.
45%
Top marginal rate
Above R1,878,600
R99,000
Tax-free threshold (u/65)
Primary rebate R17,820
R1.21M
Transfer duty threshold
Zero duty below this
R50,000
CGT annual exclusion
Individuals & special trusts
THE TAX SYSTEM
How South African personal income tax works
South African resident individuals are taxed on their worldwide income. Non-residents are taxed only on income from a South African source. The tax year runs from 1 March to 28 February – not the calendar year. All brackets, rebates, thresholds, and credits are announced in the February Budget and take effect from 1 March of that year.
The tax system uses a progressive bracket structure: each rand of income is taxed at the rate applicable to the bracket it falls into, not at a flat rate on total income. A taxpayer earning R700,000 does not pay 39% on all R700,000 – they pay 18% on the first R245,100, 26% on the next portion, and so on up the brackets. The 39% marginal rate applies only to the portion between R695,801 and R887,000.
Rebates reduce the tax calculated from the bracket table. The primary rebate of R17,820 applies to all individuals. An additional secondary rebate of R9,765 applies at age 65, and a tertiary rebate of R3,249 at age 75. These are not deductions from income – they directly reduce the tax payable. This is why the tax-free thresholds differ by age: they are the income level at which the bracket tax exactly equals the applicable rebate.
Medical scheme fees tax credits provide a further rand-for-rand reduction in tax for members of registered medical schemes. The credit is R376 per month for the main member, R376 for the first dependant, and R254 for each additional dependant – regardless of how much the scheme actually charges. These are among the most practically significant tax benefits available to South African employees.
Employees have their tax withheld monthly through the PAYE (Pay As You Earn) system. Employers calculate monthly PAYE based on the employee's annualised income, apply the applicable rebates and medical credits, and remit the tax to SARS. Self-employed individuals and those with income beyond their salary pay provisional taxin two (or optionally three) payments during the year.
KEY FIGURES 2026/27
Budget 2026/27 · Last updated June 2026
R17,820
Primary rebate
ITA s6
R9,765
Secondary rebate (65+)
ITA s6
R3,249
Tertiary rebate (75+)
ITA s6
R99,000
Tax-free threshold (u/65)
SARS Budget 2026/27
R153,250
Tax-free threshold (65—74)
SARS Budget 2026/27
R171,300
Tax-free threshold (75+)
SARS Budget 2026/27
R376/month
Medical credit (main member)
ITA s6A
R254/month
Medical credit (extra dep.)
ITA s6A
R50,000
CGT annual exclusion
8th Schedule ITA
R3,000,000
Primary residence exclusion
8th Schedule ITA
R23,800
Interest exemption (u/65)
ITA s10(1)(i)
R34,500
Interest exemption (65+)
ITA s10(1)(i)
ITA = Income Tax Act 58/1962
TAX TABLES
South African income tax brackets 2026/27
Applicable 1 March 2026 to 28 February 2027. Source: SARS Budget 2026/27 Tax Pocket Guide. These brackets apply to the taxable income of natural persons. Rebates and medical credits reduce the tax calculated from this table.
| Taxable Income (R) | Rate | Tax on lower limit (R) | Marginal rate |
|---|---|---|---|
| R1 — R245,100 | 18% of taxable income | R0 | 18% |
| R245,101 — R383,100 | R44,118 + 26% above R245,100 | R44,118 | 26% |
| R383,101 — R530,200 | R79,998 + 31% above R383,100 | R79,998 | 31% |
| R530,201 — R695,800 | R125,599 + 36% above R530,200 | R125,599 | 36% |
| R695,801 — R887,000 | R185,215 + 39% above R695,800 | R185,215 | 39% |
| R887,001 — R1,878,600 | R259,783 + 41% above R887,000 | R259,783 | 41% |
| R1,878,601 and above | R666,339 + 45% above R1,878,600 | R666,339 | 45% |
WORKED EXAMPLE – Income tax calculation, age 40, 2 on medical aid, R820,000 taxable income
Source: ITA 58/1962 · Budget 2026/27 · Illustrative – does not include RA deductions or other credits
Transfer duty rates 2026/27
Transfer duty applies to property acquisitions not subject to VAT. Zero duty on properties at or below R1,210,000. Source: Transfer Duty Act 40/1949, Budget 2026/27.
| Property Value (R) | Rate | Notes |
|---|---|---|
| R0 — R1,210,000 | 0% | Zero-rated threshold |
| R1,210,001 — R1,663,800 | 3% above R1,210,000 | |
| R1,663,801 — R2,329,300 | R13,614 + 6% above R1,663,800 | |
| R2,329,301 — R2,994,800 | R53,544 + 8% above R2,329,300 | |
| R2,994,801 — R13,310,000 | R106,784 + 11% above R2,994,800 | |
| R13,310,001 and above | R1,241,456 + 13% above R13,310,000 | Top rate since Budget 2023/24 |
Note: Transfer duty does not apply to VAT transactions. When a seller is a VAT vendor and the property is sold as part of a VAT enterprise, VAT applies instead of transfer duty.
CAPITAL GAINS TAX
How capital gains tax works in South Africa
Capital gains tax (CGT) in South Africa is not a standalone tax – it is part of the income tax system. When a capital asset is disposed of, a portion of the gain is included in taxable income and taxed at the individual's marginal rate. The portion included depends on the taxpayer type: 40% inclusion for individuals and special trusts, and 80% for companies and other trusts.
The calculation sequence is: determine the gross capital gain (proceeds minus base cost), apply any applicable exclusions (R50,000 annual exclusion, R3,000,000 primary residence exclusion, R440,000 year-of-death exclusion), apply the inclusion rate, and add the result to taxable income. The effective maximum CGT rate for an individual at the top 45% marginal rate is therefore 18% (40% — 45%).
The primary residence exclusion of R3,000,000 is one of the most significant CGT reliefs available to South Africans. It applies to gains on a person's primary residence – the home they ordinarily inhabit. Only the gain above R3,000,000 is subject to CGT. Where the gain is below R3,000,000, it is fully excluded.
CGT inclusion rates and maximum effective rates – 2026/27
| Taxpayer type | Inclusion rate | Maximum marginal rate | Maximum effective CGT rate | Source |
|---|---|---|---|---|
| Individual / Natural person | 40% | 45% | 18% | 8th Schedule ITA |
| Special trust | 40% | 45% | 18% | 8th Schedule ITA |
| Company | 80% | 27% | 21.6% | 8th Schedule ITA |
| Other trust (not special) | 80% | 45% | 36% | 8th Schedule ITA |
Source: Eighth Schedule to the Income Tax Act 58/1962 · Budget 2026/27 · ITA = Income Tax Act
8 STATUTORY TOOLS
Apply the 2026/27 rules to your situation
Each tool below encodes a specific aspect of South African personal tax as an AI-callable calculation – exact bracket arithmetic, not approximations.
Income Tax Calculator
MEDIUM DISCLAIMER2026/27 SARS tax table. Primary R17,820 / secondary R9,765 / tertiary R3,249 rebates. Medical credits. Effective and marginal rates.
Income Tax Act 58/1962 — Budget 2026/27
Open calculator â†'
PAYE Calculator
LOW DISCLAIMERMonthly PAYE, UIF, and net take-home pay. RA deduction applied. 2026/27 tax year.
Income Tax Act 58/1962 — Fourth Schedule
Open calculator â†'
Capital Gains Tax Calculator
HIGH DISCLAIMERCGT with all exclusions. Primary residence R3M. Annual exclusion R50K. Year of death R440K. Inclusion rates by entity.
Income Tax Act 58/1962 — Eighth Schedule
Open calculator â†'
Provisional Tax Calculator
MEDIUM DISCLAIMERFirst and second provisional payments. 20% underestimation penalty risk flag. IRP6 estimate.
Income Tax Act 58/1962 — Fourth Schedule
Open calculator â†'
Transfer Duty Calculator
LOW DISCLAIMERProperty transfer duty. Zero below R1,210,000. 2026/27 tiered brackets up to 13%.
Transfer Duty Act 40/1949 — Budget 2026/27
Open calculator â†'
Pre-Retirement Withdrawal Tax
MEDIUM DISCLAIMERTax on resignation or pre-retirement fund withdrawal. R27,500 tax-free. Cumulative withdrawal table.
Income Tax Act 58/1962 — Second Schedule
Open calculator â†'
Retirement Lump Sum Tax Calculator
MEDIUM DISCLAIMERTax on retirement, death, retrenchment, or severance lump sum. R550,000 tax-free cumulative.
Income Tax Act 58/1962 — Second Schedule
Open calculator â†'
2026/27 SARS Tax Tables
LOW DISCLAIMERComplete 2026/27 SARS reference. Brackets, rebates, thresholds, medical credits, interest exemptions.
Income Tax Act 58/1962 — Budget 2026/27
Open calculator â†'
FREQUENTLY ASKED QUESTIONS
Common questions about SA personal tax
What are the income tax brackets in South Africa for 2026/27?
The 2026/27 South African income tax brackets are: 18% on income 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; and 45% on income above R1,878,600. Each bracket rate applies only to the income within that bracket – not to total income.
What is the tax-free threshold in South Africa in 2026?
The tax-free threshold for 2026/27 is R99,000 for taxpayers under 65, R153,250 for those aged 65—74, and R171,300 for taxpayers 75 and older. These thresholds are derived from the primary rebate (R17,820), secondary rebate (R9,765 at age 65+), and tertiary rebate (R3,249 at age 75+) applied against the bracket tax. Income below these levels produces zero tax after rebates.
What is the transfer duty threshold in South Africa in 2026?
Properties valued at R1,210,000 or less attract no transfer duty. Above this, duty is levied on a six-bracket progressive scale: 3% above R1,210,000, rising to 13% on amounts above R13,310,000. Transfer duty is not payable when a property transaction is subject to VAT – the two taxes are mutually exclusive.
How is capital gains tax calculated in South Africa?
Calculate the capital gain (proceeds minus base cost), deduct applicable exclusions (R50,000 annual for individuals, R3,000,000 primary residence), apply the inclusion rate (40% for individuals), and add the result to taxable income. The included gain is then taxed at the marginal rate – giving a maximum effective rate of 18% for an individual at the top 45% bracket.
What are the medical tax credits in South Africa for 2026/27?
Medical scheme fees tax credits are R376 per month for the main member, R376 for the first dependant, and R254 for each additional dependant. These are direct rand-for-rand reductions in tax payable, not income deductions. A family of four on a medical aid receives R1,260 per month in medical tax credits (R376 + R376 + R254 + R254).
What is the difference between withdrawal tax and lump sum tax at retirement?
Pre-retirement withdrawals use a less favourable table with only R27,500 tax-free and rates of 18%, 27%, and 36%. Retirement lump sums use the more favourable retirement table with R550,000 tax-free cumulative and the same progressive rates above that. Both tables are applied cumulatively across a lifetime – prior withdrawals reduce the available tax-free thresholds on all future withdrawals.
Wandile Lokwe
FAIS Key Individual · 20 years South African financial services
The tax brackets, rebates, credits, and rates on this page are maintained from official SARS publications – the Budget Tax Pocket Guide, SARS Interpretation Notes, and the Acts themselves. All figures are updated after the February Budget and after any mid-year legislative amendments.
Content last updated: June 2026 · Figures as at Budget 2026/27 · Next statutory review: March 2027 · Contact: wandile@centurionai.co.za
RELATED TOOLS
Tools from other modules practitioners use with personal tax
RA Deductibility
MEDIUMHow much of your RA contribution is deductible — reduces taxable income before income tax.
ITA s11F
Two-Pot Withdrawal Tax
MEDIUMSavings pot withdrawals are taxed at your marginal income tax rate — not the retirement table.
Revenue Laws Amendment Act
Estate Duty Calculator
HIGHEstate duty calculated after income tax and CGT obligations reduce the net estate.
Estate Duty Act 45/1955
Retirement Projection
LOWProject retirement capital using after-tax contributions and real return assumptions.
Pension Funds Act 24/1956
VAT Calculator
LOWVAT on professional services, rental income, and business transactions alongside personal tax.
VAT Act 89/1991
SARB Rates
LOWOfficial rate (repo + 1%) for fringe benefit calculations and SARS interest on late payments.
ITA s89quat