Tax & Payroll Terms
South African Payroll & Tax Glossary
Plain-English definitions of common payroll and tax terms used in South Africa. Covers salary concepts, SARS income tax, and UIF deductions.
Income & Salary
- Gross Salary
- Your total earnings before any deductions — tax, UIF, or otherwise. The figure you usually negotiate with an employer. Also called gross income.
- Net Salary (Take-Home Pay)
- What actually lands in your bank account each month after PAYE, UIF, and any other deductions have been subtracted from your gross salary.
- Gross vs Net — Worked Example
-
If your gross salary is R30,000/month:
- PAYE deducted: ≈ R4,681
- UIF deducted: R177.12
- Net take-home: ≈ R25,142/month
Use the calculator to get your exact figures.
- Basic Salary
- The fixed base component of your remuneration, excluding allowances, bonuses, and benefits. Often lower than your total gross package.
- Cost to Company (CTC)
- The total annual cost your employer incurs for your employment — includes your gross salary plus employer contributions to medical aid, pension, UIF, and other benefits. Your take-home pay is always less than your CTC.
- Annual Income
- Your total gross earnings over a full 12-month tax year (March to February in South Africa). SARS uses your annual income to determine which tax brackets apply.
- Nett Pay
- An alternative spelling of "net pay" — same meaning. The amount you actually receive after all deductions. Both spellings are used in South African payslips.
Tax Terms
- PAYE (Pay-As-You-Earn)
- The system by which your employer deducts income tax from your salary every month and pays it directly to SARS on your behalf. You don't wait until year-end — tax is collected incrementally.
- Income Tax
- A tax levied by SARS on individuals' earnings. In South Africa, it's progressive — higher earners pay a higher percentage. For most employees, income tax is collected via the PAYE system.
- Progressive Tax System
- South Africa uses progressive taxation: income is divided into bands (brackets), each taxed at an increasing rate. Only the income within each band is taxed at that band's rate — not your entire salary.
- Tax Bracket
- A range of annual income taxed at a specific rate. For 2026/2027 there are seven brackets, ranging from 18% (R0–R245,100) up to 45% (above R1,878,600).
- Marginal Tax Rate
- The rate applied to the last rand you earn — the rate of your highest bracket. Earning more doesn't mean all your income is taxed at the new rate; only the portion above the bracket threshold is.
- Effective Tax Rate
- Your total annual tax ÷ total annual income, expressed as a percentage. Always lower than your marginal rate because lower-earning portions of your income are taxed at lower rates.
- Tax Rebate
- A fixed rand amount deducted from your calculated tax bill — not your income. For 2026/2027: R17,820 for under-65s, rising to R27,585 (65–74) and R30,834 (75+). This is why lower earners pay no tax even if their income exceeds R0.
- Tax Threshold
- The annual income level below which no tax is payable after the primary rebate. For 2026/2027: R99,000 (under 65), R153,250 (65–74), R171,300 (75+).
- Taxable Income
- The portion of your income that is subject to tax — gross income minus allowable deductions such as retirement annuity contributions and medical scheme fees credit. This calculator assumes no additional deductions.
- SARS
- South African Revenue Service — the government body responsible for collecting taxes and administering customs and excise. All tax brackets, rebates and thresholds are published annually by SARS in the National Budget.
UIF & Other Deductions
- UIF (Unemployment Insurance Fund)
- A mandatory statutory contribution that provides short-term relief if you become unemployed, are unable to work due to illness, or go on maternity/adoption leave. Both employer and employee each contribute 1% of gross salary.
- UIF Monthly Cap
- Contributions are capped at R177.12/month (employee share) regardless of salary — based on the legislated monthly remuneration ceiling of R17,712. Earners above this threshold pay the same flat amount.
See these terms in action
Enter your salary and watch PAYE, UIF, marginal rate and effective rate calculated instantly.
Calculate my take-home pay →