PAYE Calculator South Africa
2026/27 — Monthly Take-Home
Calculate monthly PAYE withholding, UIF deduction, and net take-home pay using the 4th Schedule of the Income Tax Act 58 of 1962 — Budget 2026/27. For employees and employers. Includes retirement contribution deduction and medical scheme credits.
PAYE method
Annualised
4th Schedule — ITA 58/1962
UIF employee rate
1%
UIF Act 4/2002 — monthly
UIF employer rate
1%
Additional employer cost
SDL exemption
< R500K payroll
SDL Act 9/1999 — annual
What is PAYE in South Africa?
PAYE defined — Pay As You Earn
PAYE (Pay As You Earn) is the mechanism by which South African employers withhold income tax from employees’ remuneration and remit it to SARS on a monthly basis, under the Fourth Schedule of the Income Tax Act 58 of 1962. The employer is the withholding agent — they are legally required to calculate, deduct, and pay PAYE correctly. An employer who fails to withhold the correct amount is personally liable for the shortfall.
PAYE is calculated using the annualised method: the monthly gross salary is multiplied by 12, the applicable deductions (retirement contributions) are subtracted, and the seven-bracket income tax table is applied to the annual figure. Rebates and medical credits are then subtracted, and the result is divided by 12 to produce the monthly PAYE withholding. This annualisation ensures that employees who earn a consistent salary pay the same effective tax rate each month.
In addition to PAYE, the employer deducts UIF (Unemployment Insurance Fund) contributions of 1% of gross monthly remuneration from the employee — with a matching 1% employer contribution paid separately. Employers with an annual payroll above R500,000 also pay SDL (Skills Development Levy) at 1% of total remuneration, which is not deducted from employees but is an additional employer cost.
PAYE calculator
Calculate monthly PAYE and take-home pay
Enter your gross monthly salary — not your CTC figure. Switch to Detailed Mode to include medical aid credits and retirement fund contributions that reduce PAYE.
Total gross remuneration per month before any deductions — your CTC (cost-to-company) salary component, or your IRP5 code 3601 figure divided by 12. Include all fixed monthly salary. Exclude annual bonuses and commissions unless they form part of your regular monthly pay.
Income Tax Act 58/1962 — 4th Schedule · UIF Act 4/2002 · Budget 2026/27
Awaiting calculation
Enter your gross monthly salary and click Calculate. Switch to Detailed Mode to include medical aid credits and retirement contributions.
PAYE formula — 4th Schedule
How PAYE is calculated — the annualised method
Annualise the gross monthly salary
4th Schedule — ITA 58/1962
Multiply the gross monthly remuneration by 12 to get the annual equivalent. PAYE is always calculated on an annualised basis, even though it is withheld monthly. For a salary of R45,000/month: annual gross = R540,000.
Subtract retirement fund contributions
ITA 58/1962 — s11F · 27.5% / R430,000 cap · Budget 2026/27
Subtract the annual equivalent of the employee's retirement fund contributions (RA, pension, provident) from the annual gross salary. The deduction is capped at the lesser of 27.5% of remuneration or R430,000 per year. For R4,500/month: annual contribution R54,000 — well within the 27.5% cap on R540,000 (R148,500). Taxable annual remuneration = R540,000 − R54,000 = R486,000.
Apply the seven-bracket income tax table
ITA 58/1962 — s6 · Budget 2026/27
Apply the income tax table to the taxable annual remuneration to get the annual gross tax before rebates. For R486,000: bracket 3 (R383,101–R530,200) → R79,998 + 31% × R102,900 = R79,998 + R31,899 = R111,897 gross annual tax.
Subtract rebates
ITA 58/1962 — s6(2) · Primary R17,820 · Secondary R9,765 · Tertiary R3,249
Subtract the primary rebate (R17,820) from the gross annual tax. For employees aged 65 and older, also subtract the secondary rebate (R9,765). For employees aged 75 and older, subtract the tertiary rebate (R3,249). For our R45,000/month example (age 42): R111,897 − R17,820 = R94,077.
Subtract annual medical scheme fees credit
ITA 58/1962 — s6A · R376 + R376 + R254 per member per month
If the employee contributes to a medical aid, subtract the annual medical credit. For a family of three (employee + spouse + child): (R376 + R376 + R254) × 12 = R12,072 annual credit. R94,077 − R12,072 = R82,005 annual tax after all credits.
Divide by 12 to get monthly PAYE
4th Schedule — annualised method
Divide the annual tax after rebates and credits by 12 to get the monthly PAYE withholding. R82,005 ÷ 12 = R6,834 monthly PAYE. This is the amount the employer remits to SARS each month on behalf of the employee.
Calculate UIF and net take-home
UIF Act 4/2002 — 1% employee contribution
UIF employee contribution: 1% of gross monthly salary = R45,000 × 1% = R450. Net take-home = gross salary − PAYE − UIF − retirement contribution = R45,000 − R6,834 − R450 − R4,500 = R33,216.
Payslip anatomy
What comes off your gross salary — the anatomy of a South African payslip
This table shows every deduction and employer cost for a standard South African salary earner. Employee deductions reduce take-home pay. Employer costs are additional — they do not appear on the payslip but are part of the total cost of employment.
| Item | Rate / amount | Who pays | Legislation |
|---|---|---|---|
| PAYE | Bracket table — varies | Employee (withheld by employer) | ITA 58/1962 — 4th Schedule |
| UIF employee | 1% of gross remuneration | Employee (withheld by employer) | UIF Act 4/2002 |
| Retirement contribution | Employee chosen — up to 27.5% | Employee (deducted) | ITA 58/1962 — s11F |
| UIF employer | 1% of gross remuneration | Employer only — not deducted from pay | UIF Act 4/2002 |
| SDL | 1% of total payroll | Employer only — where payroll > R500K | SDL Act 9/1999 |
Worked example
R45,000/month gross salary — age 42, family of 3 on medical aid, R4,500 RA
Skills Development Levy
SDL — what it is and when employers must pay it
SDL applies when
- →Annual payroll (total remuneration) exceeds R500,000
- →Rate: 1% of total monthly remuneration for all employees
- →Paid monthly to SARS together with PAYE
- →Paid entirely by the employer — not deducted from employee pay
- →Claimed back as training grants through SETA
SDL exemptions
- ✗Annual payroll below R500,000 — fully exempt
- ✗Public benefit organisations (PBOs) — conditionally exempt
- ✗National and provincial government departments
- ✗Religious or welfare organisations
Source: Skills Development Levies Act 9/1999
Practitioner notes
Common PAYE mistakes
Mistake 1: Confusing CTC with gross salary
CTC (Cost to Company) includes employer costs such as the employer UIF contribution (1%) and SDL (1% where applicable), in addition to the employee's gross salary. PAYE is calculated on the gross salary — not on CTC. Using the CTC figure as the PAYE input overstates the taxable remuneration and produces an inflated PAYE amount. Always separate the employee's gross salary from employer-only costs before applying the PAYE calculation.
Mistake 2: Not applying the medical credit in the PAYE calculation
The monthly medical scheme fees tax credit reduces the monthly PAYE withholding directly. Many employers — particularly smaller ones using manual PAYE calculations — forget to apply this credit, resulting in employees being over-withheld throughout the year. The over-withheld amount is refunded via the ITR12 assessment, but it reduces employee cash flow unnecessarily. The credit is (R376 × min(members, 2)) + (R254 × max(0, members − 2)) per month.
Mistake 3: Treating employer UIF and SDL as employee deductions
The employer UIF contribution (1%) and SDL (1% where applicable) are costs borne entirely by the employer — they are not deducted from the employee's gross salary. Some payslip software templates incorrectly show these as employee deductions, which understates take-home pay and creates confusion. On the employee's payslip, only the employee UIF (1%) should appear as a deduction. The employer UIF and SDL are payroll costs recorded in the employer's accounts.
Frequently asked questions
PAYE — common questions
How is PAYE calculated in South Africa?
PAYE is calculated using the annualised method under the 4th Schedule of the Income Tax Act 58 of 1962. The monthly gross salary is multiplied by 12 to get the annual figure. Retirement fund contributions (capped at 27.5% of remuneration or R430,000 per year) are subtracted. The seven-bracket income tax table is applied. The primary rebate (R17,820), secondary rebate (R9,765 for age 65+), tertiary rebate (R3,249 for age 75+), and medical credits are subtracted. The result is divided by 12 for the monthly PAYE amount.
What is the UIF contribution rate in South Africa?
UIF (Unemployment Insurance Fund) contributions are 1% of gross monthly remuneration for the employee, with an equal 1% employer contribution — totalling 2% per month. Both are capped at the statutory UIF ceiling based on the maximum remuneration threshold. The UIF is governed by the Unemployment Insurance Contributions Act 4 of 2002. The employee 1% is deducted from gross pay. The employer 1% is an additional cost paid separately to SARS with the monthly EMP201 submission.
What is SDL and when does it apply in South Africa?
SDL (Skills Development Levy) is a 1% payroll levy on total monthly remuneration, paid by employers with an annual payroll exceeding R500,000 under the Skills Development Levies Act 9 of 1999. Employers below the R500,000 threshold are fully exempt. SDL is paid monthly to SARS with the EMP201 return. It is an employer-only cost — not deducted from employee pay. Employers can claim training grant refunds through their SETA (Sector Education and Training Authority).
Does a retirement annuity contribution reduce PAYE in South Africa?
Yes. Employee contributions to an RA, pension fund, or provident fund reduce taxable remuneration before PAYE is calculated — the deduction reduces the income base on which the tax table is applied. The deduction is capped at the lesser of 27.5% of gross annual remuneration or R430,000 per year (Budget 2026/27). For example, an employee contributing R4,500/month on a R45,000 gross salary reduces annual taxable remuneration by R54,000, moving from the 31% bracket to a lower effective rate.
What is the difference between CTC and take-home pay in South Africa?
CTC (Cost to Company) is the total employer cost: gross salary plus employer UIF (1%) and SDL (1% where applicable). Gross salary is what appears as the employee's income before deductions. Take-home pay is gross salary minus PAYE, minus employee UIF (1%), minus any retirement fund contributions. For a R45,000 gross salary, take-home pay with a R4,500 RA contribution, family medical aid, and age 42 is approximately R33,216 — about 74% of gross salary.
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PAYE calculation encodes the 4th Schedule annualised method exactly as required by the Income Tax Act 58 of 1962. UIF at 1% (employee + employer) is sourced from the Unemployment Insurance Contributions Act 4 of 2002. SDL threshold of R500,000 is from the Skills Development Levies Act 9 of 1999. All rebates and medical credits are from SARS Budget 2026/27 Tax Pocket Guide.
PAYE quick reference
4th Schedule ITA 58/1962 · Budget 2026/27
Method
Gross × 12, tax ÷ 12
Annualised
RA deduction cap
s11F — lesser of two
27.5% / R430K
Primary rebate (monthly)
R17,820 ÷ 12
R1,485
Secondary (65+, monthly)
R9,765 ÷ 12
R814
Tertiary (75+, monthly)
R3,249 ÷ 12
R271
Medical credit — main member
s6A ITA 58/1962
R376/month
Medical credit — first dep.
s6A ITA 58/1962
R376/month
Medical credit — further deps.
s6A ITA 58/1962
R254/month
UIF employee
UIF Act 4/2002
1%
UIF employer
UIF Act 4/2002
1%
SDL rate
SDL Act 9/1999
1%
SDL exemption
Annual total payroll
< R500K payroll
EMPLOYER — EMP201
Employers submit the EMP201 return monthly to SARS and remit PAYE + UIF (employer + employee) + SDL by the 7th of the following month (or the last business day before if the 7th falls on a weekend or public holiday). Late payment attracts a 10% penalty.
LOW DISCLAIMER
PAYE is calculated on standard salary inputs. Actual withholding may differ for employees with fringe benefits, commission income, multiple employers, or assessed losses. Employers must use SARS eFiling or the official PAYE tables for authoritative payroll processing.