How to Calculate Your Tax: A Simple Guide for South African Taxpayers

Understanding how to calculate your tax can feel overwhelming, but with the right knowledge, you can confidently navigate the process. Whether you’re a salaried employee or a self-employed individual, calculating your tax accurately ensures compliance and helps you avoid penalties. This guide provides a straightforward approach to calculating your tax in South Africa.

1. Know Your Taxable Income

The first step in calculating your tax is to determine your taxable income. Taxable income is the amount of money you earn that is subject to taxation, and it includes your salary, bonuses, rental income, and other sources of income.

• For employees: Your taxable income is generally your gross salary minus allowable deductions (such as retirement fund contributions, medical aid, and travel expenses).

• For the self-employed: Your taxable income is the profit from your business after deducting any allowable expenses, such as business-related travel, office costs, and employee wages.

2. Apply the Tax Tables

Once you have your taxable income, you need to refer to the South African Revenue Service (SARS) tax tables. These tables outline the tax rates based on income brackets for the current tax year.

Here’s an example of how the income tax brackets work for the 2025/2026 tax year:

As your income rises, the percentage of tax you pay increases. For example, if your taxable income is R250,000, part of it will be taxed at 18%, and the remainder at 26%. This system is known as progressive taxation.

3. Calculate Your Tax Payable

Now that you know the tax brackets, the next step is to calculate how much tax you owe. Here’s how you can break it down:

• For the first portion of your income (up to R237,100), you’ll pay 18%.

• For income between R237,101 and R370,500, the tax rate is 26%.

• Continue this process for each income bracket your total income falls into.

If your taxable income is R250,000, your tax calculation would look like this:

• First R237,100 taxed at 18% = R42,678

• R250,000 – R237,100 = R12,900 taxed at 26% = R3,354

So, your total tax payable would be:
R42,678 + R3,354 = R46,032

4. Consider Deductions and Rebates

After calculating the tax on your taxable income, you might be eligible for tax deductions or rebates, which can lower your total tax liability.

• Tax Deductions: These reduce your taxable income. Common deductions include retirement contributions, medical expenses, and travel expenses for business purposes.

• Tax Rebates: These are subtracted from your tax payable. The primary rebate for individuals under 65 years of age is R16,425 (2025/2026 tax year). The age-based rebate increases for individuals over 65.

5. Submit Your Tax Return

Once you’ve calculated your tax payable, you need to submit your tax return to SARS. This can be done online via the SARS eFiling system, or you can visit a SARS branch for assistance. Make sure to keep records of all income, deductions, and any relevant documents to support your calculations.

6. Pay Your Tax

If you’re a salaried employee, your employer will usually deduct tax at source through Pay As You Earn (PAYE). However, if you’re self-employed or owe additional tax, you will need to pay SARS directly. Payment can be made via the SARS eFiling system or other payment methods outlined by SARS.

Calculating your tax can be a bit complex, but with this guide, you should have a clearer understanding of how to proceed. Always keep track of your income and deductions, and make use of the available rebates to minimize your tax burden. If you’re unsure about any aspect of tax calculation, consulting with a tax professional or accountant is a good idea to ensure compliance and avoid errors.

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