How South African income tax works
SARS uses a progressive sliding scale — different portions of your income are taxed at progressively higher rates. Only the income within each bracket is taxed at that bracket's rate, not your entire income.
2025/2026 Tax Brackets:
- R0 – R237,100: 18%
- R237,101 – R370,500: 26% on the amount above R237,100, plus R42,678
- R370,501 – R512,800: 31% on the amount above R370,500, plus R77,362
- R512,801 – R673,000: 36% on the amount above R512,800, plus R121,475
- R673,001 – R857,900: 39% on the amount above R673,000, plus R179,147
- R857,901 – R1,817,000: 41% on the amount above R857,900, plus R251,258
- R1,817,001+: 45% on the amount above R1,817,000, plus R644,489
Tax rebates are fixed amounts subtracted directly from your tax liability, not your income. Every taxpayer under 65 receives the Primary Rebate (R17,235). If you are 65 or older you also receive the Secondary Rebate (R9,444). At 75 or older the Tertiary Rebate (R3,145) applies as well.
Medical Aid Tax Credits reduce your tax liability by R383 per month for the first two beneficiaries (you and one dependant) and R258 per month for each additional member. The credit is non-refundable — it can only reduce your tax to zero.
Marginal rate vs effective rate: Your marginal rate is the rate applied to your last rand of income — the highest bracket you reach. Your effective rate is your total tax divided by your gross income. The effective rate is always lower than the marginal rate because lower income portions are taxed at lower rates. For example, a R600,000 annual income has a marginal rate of 36% but an effective rate of around 22%.
This calculator does not account for retirement annuity deductions, pension fund contributions, or other allowable deductions that may further reduce your taxable income. For complex tax situations consult a registered tax practitioner.