PAYE & Income Tax FAQ South Africa

PAYE (Pay-As-You-Earn) is calculated using a four-step process: (1) Your monthly gross salary is multiplied by 12 to get your annual income. (2) South Africa's progressive tax brackets are applied — only the income within each bracket is taxed at that bracket's rate, ranging from 18% to 45%. (3) Your age-based tax rebate (R17,820 for under-65s in 2026/2027) is subtracted from the total. (4) The resulting annual tax is divided by 12 to get your monthly PAYE deduction. Your employer handles this calculation and pays SARS on your behalf every month.

For the 2026/2027 tax year, no income tax is payable if your annual income is below: R99,000 (under 65), R153,250 (ages 65–74), or R171,300 (age 75 and older). These thresholds are derived from the primary rebate divided by the lowest bracket rate — they reflect the point at which the rebate fully offsets your progressive tax. Monthly equivalents: approximately R8,250/month (under 65), R12,771/month (65–74), R14,275/month (75+).

The seven tax brackets for 2026/2027 are: R0–R245,100 at 18%; R245,101–R383,100 at 26%; R383,101–R530,200 at 31%; R530,201–R695,800 at 36%; R695,801–R887,000 at 39%; R887,001–R1,878,600 at 41%; and R1,878,601 and above at 45%. South Africa uses a progressive system — only the income within each band is taxed at that rate. A higher bracket does not mean your entire salary is taxed at the higher rate.

Gross salary is your total earnings before any deductions — the amount on your offer letter or employment contract. Net salary (also called take-home pay or nett pay) is what is deposited into your bank account after PAYE income tax and UIF contributions have been subtracted. For example: a R30,000 gross monthly salary minus approximately R4,681 PAYE and R177 UIF leaves roughly R25,142 net take-home per month (under 65, 2026/2027).

On a R20,000 per month gross salary (under 65, 2026/2027), your monthly PAYE is approximately R2,115 and UIF is R177.12, giving an estimated net take-home of approximately R17,708 per month. Your effective tax rate is about 10.6%. Use the calculator on the homepage to get exact figures for your specific salary and age group.

On a R30,000 per month gross salary (under 65, 2026/2027), your monthly PAYE is approximately R4,681 and UIF is R177.12, giving an estimated net take-home of approximately R25,142 per month. Your effective tax rate is about 15.6%.

On a R40,000 per month gross salary (under 65, 2026/2027), your monthly PAYE is approximately R7,685 and UIF is R177.12, giving an estimated net take-home of approximately R32,138 per month. Your effective tax rate is about 19.2%.

A tax rebate is a fixed rand amount that SARS subtracts directly from your calculated tax bill — not from your income. For 2026/2027: under-65s receive a primary rebate of R17,820; those aged 65–74 receive R27,585 (primary + secondary); those 75 and older receive R30,834 (primary + secondary + tertiary). The rebate is why someone earning just above the tax threshold still pays little or no tax — the rebate offsets the small amount of tax calculated on their income.

Your marginal tax rate is the rate applied to the last rand you earn — the rate of the highest tax bracket your income reaches. Your effective tax rate is your total annual tax divided by your total annual income. The effective rate is always lower than the marginal rate because income in lower brackets is taxed at lower rates, and the rebate reduces the total. For example: someone on R45,000/month has a 36% marginal rate (they've entered the fourth bracket) but only a 20.6% effective rate.

The Unemployment Insurance Fund (UIF) employee contribution is 1% of your gross monthly salary. It is capped at R177.12 per month, which corresponds to the legislated maximum monthly remuneration of R17,712. If your salary is R17,712 or more, you pay the flat cap of R177.12 regardless of how much you earn. Your employer contributes a matching 1%, but this is not deducted from your salary.

This calculator covers the core statutory deductions — PAYE income tax and UIF. Your payslip may include additional deductions that this tool does not model: retirement annuity contributions, medical aid contributions (and the related medical scheme fees tax credit), company pension or provident fund deductions, or employer-specific allowances and benefits. These can significantly change your net pay. For an exact figure, refer to your payslip or consult your payroll department.

Yes — SARS applies age-based rebates and thresholds. Taxpayers aged 65–74 receive a higher rebate (R27,585 vs R17,820) and a higher tax-free threshold (R153,250 vs R99,000). Those aged 75 and older receive the highest rebate (R30,834) and threshold (R171,300). This means older taxpayers pay less PAYE at the same income level compared to someone under 65. Use the age group selector in the calculator to apply the correct rebate.

CTC (Cost to Company) is the total annual cost your employer incurs for your employment — your gross salary plus employer contributions such as medical aid, retirement fund, and UIF. If your CTC is R600,000 per year and your employer contributes R50,000 toward benefits, your gross salary for tax purposes is R550,000. Your take-home pay is calculated on the gross salary portion, not the full CTC. Always clarify whether a job offer is stated as CTC or gross salary.

Many salaried employees who earn below R500,000 per year from a single employer are exempt from submitting a tax return, provided PAYE was correctly deducted. However, you must submit a return if you earn above R500,000, have multiple income sources, received a travel allowance, have investment income, or need to claim deductions such as a retirement annuity. When in doubt, file — SARS may owe you a refund if too much PAYE was withheld.

No — this is an independent estimation tool. It uses the official SARS 2026/2027 tax brackets, rebates, and UIF rates sourced from National Treasury publications, but it is not affiliated with or endorsed by SARS. Results are indicative and may differ from your actual payslip due to deductions not modelled here. For formal tax assessments, refer to the SARS eFiling system or consult a registered tax practitioner.