Below is How To Pay Tax In South Africa
You must pay South African taxes if you work in South Africa or own a South African business. The amount you’ll pay depends on certain factors, such as whether you are a resident or non-resident.
This guide explains the various aspects of taxes in South Africa, including the following:
The tax system in South Africa
South Africa uses a residence-based taxation system whereby residents are taxed on worldwide income and non-residents are taxed on South African-sourced income. With 22.2 million of its 58 million-strong population paying taxes, most of the state’s income comes from personal and corporate taxes. Indirect taxes, though, such as Value-Added Tax do account for nearly a third of the government’s coffers.
Federal taxes in South Africa
The South African government levies a series of direct taxes on citizens and companies operating in South Africa. These include income and business taxes, capital gains, and inheritance taxes.
Indirect taxes such as Value-Added Tax (VAT) and Fuel Duty also apply, as well as contributions towards social security in South Africa.
More information on who has to pay is available from the South African Revenue Service.
Taxes on goods and services in South Africa
VAT in South Africa is levied on the consumption of goods and services. The VAT rate in South Africa is currently 15% on most goods and services and on imported goods, though there are some exceptions, for example, some financial services.
Businesses are responsible for paying VAT to the government but they can pass on this charge to their customers or clients by adding VAT to the cost of invoiced goods and services.
Businesses must register for VAT in South Africa if their annual turnover exceeds R1 million within a 12-month period.
Can you get a refund on VAT?
Tourists and diplomats visiting South Africa can claim a refund of the VAT they paid on goods purchased in the country. To qualify, you’ll need to be a non-resident foreign passport-holder or a South African passport-holder who is now a permanent resident of another country. You can reclaim VAT when leaving the country by declaring the goods in question to a customs official.
The South African government’s guide to VAT refunds for tourists offers further information on how to make a claim.
Who has to pay tax in South Africa?
You must pay taxes in South Africa if you:
Are a permanent or temporary resident of South Africa – if you have South African citizenship or a South African residence permit, you must pay taxes.
Lived in South Africa for more than 91 days in each of the last five tax years, and at least 915 days in total across those five years.
Are a homeowner in South Africa. All homeowners (even non-residents) must register with the SARS in the event they are liable to pay capital gains tax on property.
Earn more than R1.25 million in foreign employment income as a tax resident.
There are exemptions to these rules, for example, if you are elderly and/or make under a certain amount annually. However, if you qualify as a tax resident in South Africa, you must register as a taxpayer by visiting your local SARS branch to verify your identity, address, and bank details. You can finish the remainder of the process online.
Income tax rates in South Africa
Earnings received from employment income, self-employed trade, rental income, investment income, and pension income are subject to income tax. Self-employed people pay income tax at the same levels as employees in South Africa.
These are South Africa’s income tax bands for the 2021 tax year (1 March 2020 to 28 February 2021):
| Taxable income (R) | Rates of tax (R) |
|---|---|
| Up to R205,900 | 18% of taxable income |
| R205,901–R321,600 | R37,062 + 26% of taxable income above R205,900 |
| R321,601–R445,100 | R67,144 + 31% of taxable income above R321,600 |
| R445,101–R584,200 | R105,429 + 36% of taxable income above R445,100 |
| R584,201–R744,800 | R155,505 + 39% of taxable income above R584,200 |
| R744,801–R1,577,300 | R218,139 + 41% of taxable income above R744,800 |
| R1,577,301 and above | R559,464 + 45% of taxable income above R1,577,300 |
At what salary do I pay tax in South Africa?
R87 300 if you are younger than 65 years. If you are 65 years of age to below 75 years, the tax threshold (i.e. the amount above which income tax becomes payable) increases to R135 150. For taxpayers aged 75 years and older, this threshold is R151 100.
How do I pay tax to SARS?
On eFiling, if you’re a registered efiler.
On the SARS MobiApp by clicking on the Profile Management button.
In-person at any SARS branch if you’re not registered with eFiling (this may require you to make an appointment).
When completing and submitting your Income Tax Return for Individuals (ITR12).