SARS Tax Tables for the Tax Years 2025 and 2025

Including additional tax information

It is tradition and common practice that the South African Minister of Finance delivers the annual budget speech in the last week of February. Congruent with this tradition and common practice, the current Minister of Finance, Mr Tito Mboweni, delivered the budget speech on Wednesday, 24 February 2025 – laying out the projected revenue and expenditure of the National Treasury for the next fiscal year.

A Quick Overview of SARS Tax Tables 2025/2022

✔️What is SARS?
✔️What is the tax year?
✔️What are tax tables?
SARS tax tables (tax brackets) for individuals
SARS tax tables for businesses
Tax rates for trusts
Tables for transfer duty

Taxes are the main component of the projected revenue and SARS is mandated by the South African government to collect these taxes. Thus, SARS is the key institution to collect most of the government’s revenue.

What is SARS?

SARS is an acronym for the South African Revenue Service.

According to the website of SARS (www.sars.gov.za), it describes itself as follows: “The South African Revenue Service (SARS) is the nation’s tax collecting authority. Established in terms of the South African Revenue Service Act 34 of 1997 as an autonomous agency, we are responsible for administering the South African tax system and customs service.”

SARS administers, inter alia, the following tax-related legislation:

• Income Tax Act (Act 58 of 1962)
• Customs and Excise Act (Act 91 of 1964)
• Value-Added Tax Act (Act 89 of 1991)
• Tax Administration Act (Act 28 of 2011)
• Employment Tax Incentive Act (Act 26 of 2013)

What is the tax year?

The tax year is the accounting period of twelve months used by SARS as a basis for calculating and collecting taxes.

SARS refers to the tax year as the year of assessment.

For individuals, a tax year covers the period 1 March to the last day of February the following year. The South African tax year differs from a normal calendar year, which runs from 1 January to 31 December.

The current tax year (1 March 2025 to 28 February 2025) in South Africa is called the 2022 tax year because the tax year is named by the year in which it ends. The 2021 tax year refers to the period 1 March 2025 to 28 February 2025.

Companies are allowed to have a tax year ending on the same date as the last day of their financial year.

What are tax tables?

Tax tables, also known as tax brackets, are tools utilized by SARS to indicate the amount of tax due by a taxpayer based on income received. Put differently, tax brackets show the taxpayer the tax rate he or she will pay on each portion of their income.

Generally, tax tables change every year and are published on the website of SARS at the start of a new tax year, in March.

There are numerous types of tax tables on the website of SARS, among others, tax tables for individual taxpayers, businesses, and trusts.

SARS tax tables (tax brackets) for individuals

Individuals and income tax

Definition of income tax

Income tax is the normal tax payable on your taxable income.

What is taxable income?

Taxable income is the amount of income used by SARS to calculate the taxes owed by an individual or a business to the government in a tax year. Put in other words, taxable income is the amount of money that creates a potential tax liability for the taxpayer.

Calculation of taxable income

This is only a general outline and does not claim to be a complete example.

Tax tables (tax brackets) for individuals for the tax years 2025 and 2025

2022 (1 March 2025 – 28 February 2025)

2021 (1 March 2025 – 28 February 2025)

Tax rebates

After the calculation of your income tax, using one of the applicable tax tables above, you are entitled to a certain tax rebate. All taxpayers who are natural persons qualify for a certain rebate.

A rebate is the amount by which SARS reduces the actual amount of tax you owe the government.

The most common rebate applied by SARS is according to age. There are 3 different levels:

• Primary rebate – under 65 years.
• Secondary rebate – between 65 and 75 years.
• Tertiary rebate – 75 years and above.

Tables for tax rebates

Tables for tax rebates as per age group

Rebates with regard to medical expenses

There are two more types of rebates that a taxpayer can use to reduce his or her income tax payable, namely:

• Medical scheme fees tax credit.
• Additional medical expenses tax credit.

Medical scheme fees tax credit

Medical scheme fees tax credit (also referred to as MTC) is a non-refundable rebate. Any amount not permitted in the current tax year, can not be transferred to the next year of assessment.

The MTC rebate aims to help to achieve “greater equality in the treatment of medical expenses across all income groups,” according to SARS.

It is a fixed monthly amount that increases according to the number of dependants.

Medical tax credit rates

Additional medical expenses tax credit

Additional medical expenses tax credit (also referred to as AMTC) is also a non-refundable rebate and as with MTC, amounts not allowed in the current tax year, can not be carried over to the next year of assessment.

AMTC is mostly calculated against qualifying medical expenses paid for the taxpayer and any dependant but is limited to a certain amount.

Information about which medical expenses qualify for the AMTC rebate, who qualifies as a dependant, and how the rebate is calculated, is available on the SARS website (www.sars.gov.za).

Tax threshold

A tax threshold is the income level at which a natural person starts to pay income tax.

Tables for tax thresholds

Individuals – Comparisons of the average income tax rates for the 2025 and 2025 tax years

The average income tax rates comparisons for the 2025/21 to 2025/2022 year are not available yet from SARS as of beginning of March 2025.

Is there a difference between the average income tax rate and the effective income tax rate of an individual?

Basically, the two terms refer to the same thing. The effective tax rate is the average rate at which an individual is taxed on his or her taxable income. Putting it differently, a taxpayer’s average tax rate (or effective tax rate) is the percentage of taxable income that he or she pays in taxes.

The average tax rate (effective tax rate) is calculated as the total tax paid divided by the taxable income.

Table for annual income tax payable and average tax rates, 2025/2021 – Taxpayers below 65

Source: National Treasury

Table for annual income tax payable and average tax rates, 2025/2021 – Taxpayers aged 65 to 74

Source: National Treasury

Table for annual income tax payable and average tax rates, 2025/2021 – Taxpayers aged 75 and over

Source: National Treasury

Individuals – tax and retirement

An individual is allowed to retire from the age of 55 from a pension fund, a pension preservation fund, a provident fund, a provident preservation fund, and a retirement annuity fund.

When you retire as a member of a pension fund, pension preservation fund or retirement annuity fund, you are entitled to take up to a maximum of one-third of your retirement interest in the relevant fund. The balance must be utilized to buy an annuity (pension/income) that is paid at regular intervals, for instance, monthly or yearly.

However, if your total retirement interest in the fund is less than R247 500, you are allowed to take the full amount as a lump sum, which is taxable.

If you are already retired and receiving an annuity income from a living annuity arrangement and the remaining value of the living annuity drops below R50 000, you are entitled to take the full amount as a lump sum.

Currently (July 2025), the one-third rule does not apply to preservation funds.

SARS published a Guide on the Calculation of the Tax Payable on Lump Sum Benefits (the Guide) on October 16, 2018, in which guidelines about lump-sum benefits and their calculations are provided.

A member of a retirement fund qualifies for a lump sum benefit when his or her membership of that retirement fund stops.

There are two types of lump-sum benefits payable by a retirement fund, namely, withdrawal benefit and retirement benefit.

• Withdrawal benefit: an amount that is due to a member when the member leaves the retirement fund before reaching retirement age, for any reason other than retrenchment, retirement, or death, for instance, resignation, withdrawal, or divorce.
• Retirement benefit: An amount that is payable to a member when death, retrenchment, or retirement happens.

Tax tables for lump sum benefits

The withdrawal benefit

2022 tax year (1 March 2025 – 28 February 2025)

2021 tax year (1 March 2025 – 28 February 2025)

Retirement benefit

2022 tax year (1 March 2025 – 28 February 2025)

2021 tax year (1 March 2025 – 28 February 2025)

Calculation of tax payable on lump sums

Calculations on lump-sum benefits are done on a cumulative basis, meaning that all the lump sum benefits previously received by a member, or which accrued to her or him, since 1 October 2007 are taken into consideration.

In calculating the tax, all lump sum benefits already received will be subjected to the current tax rates applicable to the retirement benefit and the withdrawal benefit, respectively.

Dates since tax calculations are done cumulatively on lump-sum benefits:

• 1 October 2007 for retirement benefits.
• 1 March 2009 for withdrawal benefits.
• 1 March 2011 for severance benefits.

Severance benefit

A detailed examination of a severance benefit is not the focus of this article. However, a short description of what a severance benefit entails, is necessary, because it must be considered in the accumulation of lump-sum benefits when the tax on a retirement lump sum is calculated.

A severance benefit is a lump sum paid by an employer to an employee. However, it is not a “lump sum benefit” per definition, because it is paid by the individual’s employer and not by the person’s retirement fund. The amounts paid by an employer in respect of a severance benefit are unrelated to amounts paid by the employee’s retirement fund.

According to the Income Tax Act of 1962, the following occurrences can give rise to a severance payment: relinquishment, termination, loss, repudiation, cancellation or variation of the employee’s office, employment, or appointment.

Furthermore, certain additional requirements have to be met, for instance, the employee must have reached the age of 55 years at the time of the lump sum payment.

Severance benefits are taxed on the same basis as retirement benefits.

Steps to follow when calculating the tax payable on a current lump sum amount

Step 1

Determine the total taxable income of all lump sums received or accrued, including the current lump-sum benefit by:

• Adding together –
• the current retirement benefit, withdrawal benefit or severance benefit;
• all previous retirement benefits received or accrued on or after 1 October 2007;
• all previous withdrawal benefits received or accrued on or after 1 March 2009;
• all previous severance benefits received or accrued on or after 1 March 2011.
• Deducting any contributions to any retirement fund, that were previously not allowed, if any.

Step 2

Apply the tax rate, according to the tax table (retirement benefit or withdrawal benefit) applicable, to the total lump sum amount calculated in Step 1.

Step 3

Determine the total taxable income of all previous lump sums, excluding the current lump-sum benefit, by:

• Adding together –
• all previous retirement benefits accrued on or after 1 October 2007;
• all previous withdrawal benefits accrued on or after 1 March 2009;
• all previous severance benefits accrued on or after 1 March 2011.
• Deducting any contributions to any retirement fund, that were allowed as a deduction against any previous lump sums, if any.

Step 4

Apply the tax rate, according to the tax table (retirement benefit or withdrawal benefit) applicable, to the total lump sum amount calculated in Step 3, irrespective of whether the previous lump sum was of a different type of lump sum.

Step 5

Deduct the tax calculated in Step 4 from the value in Step 2 to determine the tax payable on the current lump sum.

Note: Steps 3 to 5 are not necessary when a lump sum benefit or severance benefit was not previously received by or accrued to the taxpayer.

Practical examples to illustrate how tax is calculated on any lump sum payable to a member

Example 1 – Member receives a withdrawal benefit with no previously received lump sum benefits

Situation: Mr CL Ever terminates his membership of the FWN Provident Fund on 31 December 2019 and requests that his benefit of R90 000 be paid to him as a lump sum. He did not receive any lump sum payments in the past.

Step 1

Ascertain the total taxable income of all lump sums received or accrued.

Step 2

Consult the tax table for a withdrawal benefit and apply the tax rate to the lump sum amount of R90 000 calculated in Step 1.

The total taxable income of R90 000 falls within the tax bracket of: “18% of taxable income above R25 000.”

The tax calculation is as follows:

The first R25 000 of the R90 000 is tax-free while R11 700 tax is payable on R65 000.

Example 2 – Member receives a retirement benefit and received a withdrawal benefit since 1 March 2009

Situation: Ms DE Cent retires from the GRQ Provident Fund on 31 January 2025. Her retirement benefit amounts to R2 000 000 at this stage. Her choice is to receive the full benefit as a lump sum. She has R300 000 of excess fund contributions that were previously not taken into consideration. She received a withdrawal benefit of R400 000 from the FDK Provident Fund on 31 May 2014. Tax of R67 500 was paid on the withdrawal benefit.

Step 1

Determine the total taxable income of all lump sums received or accrued.

Step 2 

Refer to the tax table for a retirement benefit and apply the tax rate to the lump sum amount of    R2 100 000 calculated in Step 1.

The total taxable income of R2 100 000 falls within the tax bracket of: “R130 500 + 36% of taxable income above R1 050 000.”

The tax calculation is as follows:

Step 3

Determine the total taxable income of all previous lump sums received or accrued, excluding the current lump sum benefit.

Step 4

Refer to the tax table for a retirement benefit and apply the tax rate to the taxable income of R400 000 calculated in Step 3.

The total taxable income of R400 000 falls within the tax bracket of: “0%”, meaning there is no tax payable on the R400 000.

Step 5

Subtract the tax calculated in Step 4 from the tax calculated in Step 2 to determine the tax payable on the current retirement fund.

Thus, Ms Cent will receive R1 491 500 of her total benefit of R2 000 000.

Note: The deduction may not exceed the amount of the lump sum benefits.

Individuals – tax and investments

Tax on interest earned

Interest earned on bonds, cash in banks, and unit trusts will be taxed. Even interest received from your Medical Savings Account (MSA) can be taxed.

However, a certain amount of interest earned from a South African source by any natural person is exempt from tax. Consult the tax table below for the interest exemptions per tax year.

Tax table for interest exemptions

Interest from foreign resources has no exempt portion, although a taxpayer is allowed to deduct any foreign tax paid. You need to report the South African rand equivalent amount of foreign interest earned to SARS.

Tax on dividends

Regarding local dividend income, dividends tax is a withholding tax of 20% that is deducted from dividend payments to shareholders and paid over to SARS by the company paying the dividend. It is referred to as dividends withholding tax (DWT).

With regard to foreign dividend income, a taxpayer is obliged to report the ZAR equivalent amount to SARS. Foreign dividends are usually taxable, although, you will be allowed to deduct any tax you pay in a foreign country where the dividends were received.

Individuals – tax on donations and gifts

Donations tax is applicable to donations and gifts.

When you are the giver (the donor) of a donation or gift, you are liable for donations tax, which is calculated at a flat rate of 20% on the gift or donation’s value, up to R30 million. Above R30 million the rate is 25%.

However, there is an annual exemption of R100 000 of the value of all your donations made during the tax year. There are also other exemptions, for instance, donations made to a spouse and an approved public benefit organisation (PBO).

When you are the receiver (the donee) of a donation, you are not taxed.

However, when the donor fails to pay the donations tax on time, the donee and donor will be equally responsible for the donations tax.

Donations tax must be paid by the end of the month following the month during which the donation was made.

Individuals – tax on inheritance

Regarding a deceased estate, estate duty comes into play. Estate duty is a form of tax that is levied on the deceased estate. According to SARS, “the purpose of estate duty is to tax the transfer of wealth (assets) from the deceased estate to the beneficiaries.”

The estate duty rate is 20% on the first R30 million of the dutiable (taxable) amount of a deceased estate and 25% on the amount exceeding R30 million. However, there is an estate duty rebate of R3.5 million, meaning the 20% rate comes into effect after the deduction of R3.5 million from the net value of the estate.

For example, if the total net value of the estate is R5 million, the estate will be taxed on R1.5 million (R5 million less R3.5 million), which amounts to R300 000.

It is normally the responsibility of the deceased estate’s executor to pay the estate duty to SARS.

Individuals and PAYE

PAYE stands for “Pay As You Earn,” which is the process of withholding or deducting tax from an employee’s remuneration (salary, wage, commission) by the employer. It is referred to as Employees’ Tax by SARS.

Put in other words, PAYE means that you as a taxpayer are paying the tax that you owe to SARS on a monthly basis.

Employers are obliged to withhold PAYE each month and pay it over to SARS on the employee’s behalf on a monthly basis, within seven days after the end of the month during which the PAYE was deducted.

To determine the PAYE of an employee, employers have to consult the SARS Tax Deduction Tables, comprising weekly, fortnightly, monthly, and annual tax deduction tables.

To determine whether you are liable for PAYE or not, consult the summary below:

2022 Tax year

2021 Tax year

Individuals and Unemployment Insurance Fund (UIF)

According to SARS, the purpose of the Unemployment Insurance Fund (UIF) is to “give short-term relief to workers when they become unemployed or are unable to work because of maternity, adoption leave, or illness. It also provides relief to the dependants of a deceased contributor.”

Employees are compelled to contribute 1% of their remuneration received from their employers to the UIF. For example, when a taxpayer’s gross remuneration is R 10 000 per month, the UIF contribution will be R100 (R10 000 x 0.01). However, the “maximum earnings ceiling” is R14 872 per month (R178 464 annually). Therefore, the maximum monthly contribution for an employee can not be higher than R148.72 (R14 872 x 0.01).

Some employees are exempted from UIF contributions, for instance when employed for less than 24 hours per month.

The employer is also obliged to pay 1% of the employee’s remuneration to the UIF.

Individuals and capital gains tax (CGT)

SARS issued a guide, “ABC of Capital Gains Tax for Individuals” on March 11, 2025 – A thorough guide that explains the ins and outs of capital gains tax.

The Income Tax Act of 1962 provides that a taxable capital gain must be included in an individual’s taxable income. Therefore, (CGT) is not a separate tax but forms part of income tax.

CGT is a tax levied on an individual’s capital gain on an asset. SARS describes capital gain as follows: “A person’s capital gain on an asset disposed of is the amount by which the proceeds exceed the base cost of that asset. A capital loss is equal to the amount by which the base cost of the asset exceeds the proceeds.”

There are two tax rates applicable to CGT, namely:

• Inclusion rate: The rate at which capital gain is taxed in order to determine an amount that is to be included in a taxpayer’s income.
• Maximum effective rate: The rate at which capital gains are eventually taxed, which is a lower effective rate than the effective rate for income tax.

There is an annual exclusion of R40 000 that is deducted from the capital gain before the 40% tax rate is applied.

 Tax rates for individuals for CGT

• Inclusion rate

2021 and 2025 tax years: 40%

• Maximum effective rate

2021 and 2025 tax years: 18%

SARS tax tables for businesses

Corporate income tax (CIT)

Corporate income tax (CIT) is a direct tax imposed on businesses incorporated under the applicable laws of the Republic of South Africa and which derive their income from within and outside the country.

According to SARS, CIT is applicable (but not limited) to the following businesses:

• Listed public companies
• Unlisted public companies
• Private companies
• Dormant companies
• Close corporations
• Co-operatives
• Share block companies
• Public benefit companies
• Body corporates
• Collective investment schemes
• Small business corporations (section 12E of the Income Tax Act 58, 1962)

A business is taxed on its net income (taxable income). (Net income = revenue less all applicable and allowable expenses.)

For both the 2025 and 2025 tax years, the Corporate Income Tax is 28%.

Corporate income tax is also referred to as business tax, corporation tax, or company tax.

Small businesses and tax

SARS has two categories of favorable tax dispensations for qualifying small businesses, i. e. micro-businesses and small business corporations.

Turnover tax for micro-businesses

Turnover tax is a simplified turnover-based tax system that applies to sole proprietors, partnerships, close corporations, companies, and co-operatives, which qualify as micro or small businesses.

The turnover tax system replaces Income Tax, VAT, Provisional Tax, Capital Gains Tax, and Dividends Tax.

The system is elective, meaning a taxpayer who qualifies can choose to be part of it or not. A micro-business can voluntarily exit the system at the end of any year of assessment. However, once leaving the system the taxpayer will not be permitted re-entry.

To qualify for turnover tax, a micro-business must not have an annual turnover of more than R1 million.

Turnover tax tables for the 2025 (1 March 2025 – 28 February 2025) and 2025 (1 March 2025 – 28 February 2025) tax year

Tax rates for small business corporations

Although businesses are generally subjected to a flat corporate income tax rate of 28%, a small business corporation (SBC) may qualify for more favourable tax rates on its taxable income up to R550 000.

To qualify for the favourable tax rates, an SBC is obliged to meet the following six requirements:

1. The SBC must be one of the following business types: Private company, close corporation, personal liability company, or co-operative.
2. The SBC’s gross income for the year of assessment must be less than R20 million.
3. All the shareholders or members of the specific business entity have to be natural persons throughout the year of assessment.
4. The company, close corporation or co-operative may not be a personal service provider or venture capital company.
5. No more than 20% of the SBC’s gross income and all capital gains may consist collectively of investment income and income derived from rendering a personal service.
6. No member or shareholder of the specific business entity must hold shares in any other private company or members’ interest in any other close corporation or co-operative other than those which:

• are inactive and have assets with a market value less than R5 000; or
• are in the process of liquidation, winding-up, or deregistration.

Tax tables for small business corporations (SBCs)

Financial year ending on any date between 1 April 2025 and 31 March 2025

Financial year ending on any date between 1 April 2025 and 31 March 2025

Businesses and Unemployment Insurance Fund (UIF)

In addition to the compulsory 1% contributions of employees, employers are also compelled to contribute 1% of an employee’s remuneration to the UIF. There is a “maximum earnings ceiling” of R14 872 per month (R178 464 annually), which means a maximum of R148.72 can monthly be deducted for UIF from an employee’s salary.

The 2% contributions (1% employer and 1% employee) must be paid over to SARS by the employer before the 7^th of the month following the month in which the UIF contributions were deducted.

Companies and Capital Gains Tax (CGT)

• Inclusion rate

2021 and 2025 tax years: 80%

• Maximum effective rate

2021 and 2025 tax years: 22.4%

Businesses and depreciation allowances

Depreciation allowances, also referred to as wear-and-tear allowances, are granted by SARS for certain “qualifying assets”.

Depreciation is a method that allows a business to write off an asset’s value over a period of time, commonly referred to as the asset’s useful life. It enables a business to spread out the cost of an asset over a number of years, instead of realising the cost in one financial year (tax year). The most common method of depreciation is the straight-line method where the value of an asset is reduced evenly over its useful life.

A complete “schedule of write-off periods acceptable to SARS” regarding the depreciation allowances can be found (pages 13 – 20) in a document from SARS: “Binding General Ruling (Income Tax) 7 (Issue 3)”, with the subject, “Wear-and-tear or depreciation allowance” and dated 24 March 2025.

The following table is an excerpt from the SARS schedule.

Tax rates for trusts

Tax rate for trusts other than special trusts

The tax rate for trusts for both the 2025 and 2025 tax years is 45%.

With regard to capital gains tax (CGT), the inclusion rate for trusts is 80% and the maximum effective rate is 36% (for the 2025 and 2025 tax years).

Tax rate for special trusts

The following trusts are categorised as special trusts:

• A trust solely created for the benefit of an individual affected by a mental illness or serious physical disability prevents that individual to be self-sufficient.
• A testamentary trust established solely for the benefit of minor children who are alive and related to the deceased on the date of death.

Special trusts are taxed at the same income tax rates applicable to individuals. However, special trusts are not entitled to any rebate.

Regarding capital gains tax (CGT), the 40% inclusion rate for CGT applies to both types of special trusts. There is also an annual exclusion of R40 000.

Tables for transfer duty

Transfer duty on immovable property is payable by the person or entity acquiring the property.

Transfer duty is payable by all natural persons and legal entities.

No transfer duty is payable if the transaction is subject to VAT.

2022 tax year (1 March 2025 – 28 February 2025)

2021 tax year (1 March 2025 – 28 February 2025)

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