SARS Income Tax Guide 2026/2027 — Tax Brackets, Deductions & ITR12 Filing Rules
Income tax is a direct tax levied on the taxable income of individuals resident in South Africa, administered by the South African Revenue Service (SARS) under the Income Tax Act 58 of 1962. This guide explains how income tax works, what the current tax brackets and rates are, what you can deduct, how to file your annual return (ITR12), and how to claim a refund — all in plain language.
What is income tax in South Africa?
Income tax is a tax levied on the taxable income earned by individuals and legal entities during each tax year. For individuals, it is governed by the Income Tax Act 58 of 1962 and administered by the South African Revenue Service (SARS).
Administered by: South African Revenue Service (SARS) — sars.gov.za
Tax year: 1 March to 28/29 February
Key Facts
- South Africa's tax year for individuals runs from 1 March to 28/29 February
- Income tax is progressive — the more you earn, the higher the rate on additional income
- Tax is collected in three main ways:
- PAYE (Pay As You Earn) — deducted monthly by employers from salaries
- Provisional tax — paid in advance by individuals and businesses without a full-time employer
- Assessment — annual reconciliation when you file your tax return (ITR12)
- All income earned by South African tax residents is subject to income tax, regardless of where in the world it was earned (with specific exemptions — see foreign income)
- Non-residents are taxed only on income from South African sources
What counts as taxable income?
- Salary, wages, and bonuses
- Commission income
- Rental income from property
- Interest income (from bank accounts, fixed deposits, bonds)
- Foreign income (for tax residents)
- Freelance and self-employment income
- Pension and annuity income
- Certain fringe benefits from employers
What does NOT count as taxable income?
- Inheritances (though estate duty may apply)
- Lottery and prize winnings (generally exempt)
- Certain life insurance policy proceeds
- Interest income below the annual exemption threshold (R23,800 for under 65; R34,500 for 65 and older — 2026/2027)
Income tax brackets and rates for 2026/2027
South Africa uses a progressive income tax system, meaning different portions of your income are taxed at different rates. As your income increases, only the income within each higher bracket is taxed at the higher rate — not your entire salary. The 2026/2027 tax brackets were adjusted by 3.4% for inflation, as announced by the National Treasury in the Budget Speech on 25 February 2026 — the first inflationary bracket adjustment since 2023/2024.
| Taxable Income | Rate of Tax |
|---|---|
| R1 – R245,100 | 18% of taxable income |
| R245,101 – R383,100 | R44,118 + 26% of amount above R245,100 |
| R383,101 – R530,200 | R80,038 + 31% of amount above R383,100 |
| R530,201 – R695,800 | R125,643 + 36% of amount above R530,200 |
| R695,801 – R887,000 | R185,259 + 39% of amount above R695,800 |
| R887,001 – R1,878,600 | R259,767 + 41% of amount above R887,000 |
| Above R1,878,600 | R666,553 + 45% of amount above R1,878,600 |
Source: National Treasury Budget 2026 / SARS Tax Tables 2026/2027. Effective 1 March 2026. Always verify current rates at sars.gov.za.
Worked example (Tax on R450,000 income)
| Step | Calculation | Amount |
|---|---|---|
| Tax on first R245,100 | 18% × R245,100 | R44,118 |
| Tax on R245,101 to R383,100 | 26% × R138,000 | R35,880 |
| Tax on R383,101 to R450,000 | 31% × R66,900 | R20,739 |
| Total before rebates | R100,737 | |
| Less: Primary rebate | (R17,820) | |
| Tax payable | R82,917 | |
| Effective tax rate | R82,917 ÷ R450,000 | 18.4% |
| Marginal rate | 31% |
*2025/2026 brackets were unchanged from 2024/2025 — the same 7-bracket structure applied, with the lowest bracket starting at R237,100 and the top rate applying above R1,817,000.
Tax rebates for 2026/2027
A tax rebate is a fixed rand amount deducted directly from your income tax liability — not from your taxable income. Unlike deductions (which reduce the income on which tax is calculated), a rebate reduces the actual tax you owe. Every natural person resident in South Africa is entitled to the primary rebate.
| Rebate | Amount (per year) | Who qualifies |
|---|---|---|
| Primary rebate | R17,820 | All individual taxpayers |
| Secondary rebate | R9,765 (additional) | Taxpayers aged 65 and older |
| Tertiary rebate | R3,249 (additional) | Taxpayers aged 75 and older |
Source: SARS Budget 2026 FAQ — sars.gov.za. Applicable 1 March 2026 – 28 February 2027.
The secondary rebate is cumulative — a taxpayer aged 75+ receives all three rebates: R17,820 + R9,765 + R3,249 = R30,834 total.
Tax-free thresholds (2026/2027)
| Age group | Tax-free threshold |
|---|---|
| Under 65 | R99,000 |
| Age 65 to 74 | R153,250 |
| Age 75 and older | R171,300 |
These thresholds mean: if your taxable income is below these amounts, you pay zero income tax — because the applicable rebate fully offsets the 18% tax calculated on that income.
Medical Scheme Fees Tax Credit (MSFTC)
A separate credit for taxpayers who contribute to a registered medical scheme. Deducted from tax owed (not from taxable income).
| Beneficiary | Monthly credit |
|---|---|
| Main member | R376 per month |
| First dependant | R376 per month |
| Each additional dependant | R254 per month |
What can you deduct from your income tax?
A deduction reduces your taxable income before tax is calculated — meaning every rand you deduct saves you tax at your marginal rate. The main deductions available to South African individuals are set out in sections 10, 11, and 18 of the Income Tax Act 58 of 1962.
- Deductible: Up to 27.5% of the greater of remuneration or taxable income, capped at R430,000 per tax year (2026/2027 — increased from R350,000 effective 1 March 2026).
- Applies to: Retirement annuity (RA) funds, pension funds, provident funds.
- Key rule: Unused deductions carry forward to future years.
- Scheme contributions: Covered by the Medical Scheme Fees Tax Credit (see Section 4).
- Additional expenses: Taxpayers aged 65 and older, or with a disability, may claim a further deduction for qualifying out-of-pocket medical expenses.
- Employees who receive a travel allowance from their employer may claim a deduction based on actual business kilometres travelled.
- A SARS-compliant logbook is required.
- PAYE is withheld on 80% of the travel allowance (or 20% if at least 80% of use is for business).
- Employees who work from home and have a dedicated workspace used regularly and exclusively for work may deduct a proportional share of home expenses.
- Applicable to both salaried employees and self-employed individuals.
- Donations to SARS-approved PBOs are deductible under Section 18A of the Income Tax Act.
- Deduction limited to 10% of taxable income (donations in excess carry forward).
- A valid Section 18A receipt is required.
- Allowable for amounts that have been included in income in a prior year and have genuinely become irrecoverable.
- Must meet requirements under Section 11(i) of the Income Tax Act.
- Premiums paid on income protection policies (not life insurance or disability lump sum) are deductible.
- Self-employed individuals may deduct costs incurred in the production of income:
- Professional subscriptions
- Business-related travel
- Equipment (subject to wear and tear provisions)
- Business insurance
- Home office
Who must submit an income tax return (ITR12)?
SARS requires certain individuals to submit an annual income tax return (ITR12). Whether you must file depends on your income level, income sources, and tax situation. Submitting when you don't need to is not harmful — you may even receive a refund. Failing to submit when required can result in administrative penalties.
You MUST file if:
- Gross income exceeded tax threshold for your age
- Received rental, foreign, business, or freelance income
- Worked for more than one employer
- Received a travel allowance or taxable fringe benefit
- Carrying forward an assessed loss
- Notified by SARS to submit
- Want to claim deductions not on your IRP5 (e.g. RA, home office)
You do NOT need to file if ALL apply:
- Income consisted only of salary from a single employer
- Remuneration was below the tax threshold
- No other taxable income
- SARS has not notified you to submit
- You are not a registered provisional taxpayer
Deadlines (2026 Year of Assessment)
The official dates for the 2026 tax filing season (1 March 2025 – 28 February 2026):
*Source: SARS official 2026 filing season announcement.
How to file your income tax return (ITR12) on SARS eFiling
The quickest and most convenient way to submit your ITR12 is via SARS eFiling (sarsefiling.co.za) or the SARS MobiApp. SARS recommends eFiling for all individual taxpayers.
Register for SARS eFiling (if not yet registered)
Visit sarsefiling.co.za and click "Register". You will need your South African ID number, tax reference number, email address, and cellphone number.
Full eFiling registration guide →Log in to eFiling
Go to sarsefiling.co.za and enter your username and password.
Request your ITR12 return
Navigate to: Returns → Returns Issued → Income Tax → ITR12. Select the relevant year of assessment and answer the wizard questions to customise your return.
Complete your return
SARS will pre-populate income from your IRP5, medical scheme certificates, and investment certificates (IT3b). Verify all pre-populated information carefully — you are responsible for its accuracy. Add any additional income sources or deductions.
Review and submit
Review the assessment on the final screen. If you owe tax: arrange payment before the deadline. If SARS owes you a refund: ensure your banking details are up to date on eFiling before submission.
Track your return status
Navigate to: Returns → Returns History. Statuses include Submitted, Captured, Assessment Issued, or Refund Issued.
Documents to have on hand
You do NOT submit these — keep them for 5 years.
- IRP5 or IT3(a) from your employer
- Medical aid tax certificate
- Retirement annuity tax certificate
- Bank interest certificate (IT3b)
- Travel logbook (if claiming travel allowance)
- Home office expense records
- Section 18A donation receipts
Income tax refunds — when and how SARS pays you back
A refund arises when the total tax you paid during the year (via PAYE or provisional tax payments) exceeds your final tax liability as calculated on assessment. SARS will pay the difference back to you directly into your bank account.
When you are likely to receive a refund:
- Your employer over-deducted PAYE
- You made deductions not reflected in PAYE
- You overpaid provisional tax
Why might your refund be delayed?
- Outstanding returns from prior years
- Outstanding debt to SARS
- Selected for audit or verification
- Banking details not verified
Income tax guides for specific situations
Your tax obligations depend on your income sources and employment type. Select the guide that applies to you.
Frequently Asked Questions
Related guides
Specific scenarios & deductions
Essential tax guides
Calculators & forms
Sources and references
All income tax information on this page is sourced from, or verified against, the following official and authoritative references:
- Income Tax Act 58 of 1962 — Primary legislation governing income tax
- SARS — Personal Income Tax — sars.gov.za/types-of-tax/personal-income-tax/
- SARS — Income Tax Rates — sars.gov.za/tax-rates/income-tax/
- SARS — Employers and PAYE — sars.gov.za/types-of-tax/pay-as-you-earn/
- National Treasury Budget Documents — treasury.gov.za
This page was last reviewed in March 2026 by Jane Smith, CA(SA). Next review: after Budget Speech February 2027.
This content is for informational purposes only and does not constitute professional tax advice. Consult a registered tax practitioner for advice specific to your situation.