What is PAYE in South Africa?

PAYE (Pay-As-You-Earn) is the South African income tax that your employer withholds from your salary every month and pays directly to SARS on your behalf. It is calculated based on your gross income, age, and any deductions like retirement contributions or medical aid.

Which tax year does this calculator use?

This calculator uses the SARS 2026/27 individual income tax brackets, rebates, and thresholds — applicable from 1 March 2026 to 28 February 2027. We update the underlying figures every March after the National Budget Speech.

How is my marginal tax rate calculated?

Your marginal rate is the tax rate that applies to the next rand you earn. South Africa uses a progressive tax system with seven brackets ranging from 18% to 45%. The calculator finds which bracket your annual taxable income falls into and reports that rate. Your effective rate (total tax ÷ total income) will always be lower than your marginal rate.

What are the SARS age-based rebates?

For 2026/27 the primary rebate is R17,820 — every taxpayer gets this. Taxpayers aged 65 to 74 get an additional secondary rebate of R9,765, and those 75 and older receive a further tertiary rebate of R3,249. Rebates are applied directly against tax owed, so they reduce your PAYE rand-for-rand.

How does the Medical Tax Credit (MTC) work?

The MTC is a fixed monthly tax credit that reduces your PAYE if you contribute to a registered medical scheme. For 2026/27 it is R364 per month for the main member, R364 for the first dependant, and R246 for each additional dependant. The credit is applied directly against tax owed, not against income.

How does the retirement annuity (RA) deduction work?

Contributions to pension funds, provident funds, and retirement annuities are deductible from your taxable income, up to 27.5% of the greater of remuneration or taxable income, capped at R350,000 per year. This calculator estimates the tax saved by your RA contribution at your marginal rate.

Is UIF deducted from my salary?

Yes. The Unemployment Insurance Fund (UIF) levy is 1% of your remuneration, capped at R177.12 per month (1% of the R17,712 monthly ceiling). Your employer matches this with a further 1%, but the calculator only shows your share since that's what comes off your payslip.

Why is the tax different from what my payslip shows?

Real payslips can vary slightly because of timing — bonuses spread over the year, changes mid-year, fringe benefits, travel allowances, and employer share schemes. This calculator gives you a clean annualised view based on the inputs you provide. For a precise figure, check your IRP5 / EMP501 reconciliation at year-end.

How are bonuses taxed?

A 13th cheque or once-off bonus is taxed at your marginal rate when it is paid. SARS allows employers to spread the PAYE on a known annual bonus across the year, but the total tax for the year is the same. The calculator simply adds the bonus to your annual taxable income before applying the brackets.

Do Section 18A donations reduce my tax?

Yes. Donations to approved Public Benefit Organisations (PBOs) that issue a Section 18A certificate are deductible up to 10% of your taxable income for the year. Anything above 10% can be carried over to the following tax year.

Can I rely on this for my tax return?

No. This is an estimator for planning purposes only. Your actual tax liability is determined when you submit your ITR12 to SARS via eFiling, and depends on travel allowances, fringe benefits, capital gains, foreign income, and many other factors not included here. Always consult a registered tax practitioner for your specific situation.

Is this calculator financial advice?

No. MyFinHealth is not a registered financial advisor under the FAIS Act, nor a registered tax practitioner with SARS. This tool is for informational purposes only — please consult a qualified professional before making decisions based on these figures.

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