At what salary do you start paying tax in South Africa?

In South Africa, you are liable to pay income tax if you earn more than: R95 750 and you are younger than 65 years. If you are 65 or older but younger than 75 years old, the tax threshold (i.e. the amount above which income tax becomes payable) is R148 217.

  • For taxpayers aged 75 years and older, this threshold is R165 689.

A tax table is a chart that displays the amount of tax due based on income received. The tax rate in the relevant tables may be shown as an amount, a percentage rate, or a combination of both.

Tax Table 2023/2024

Taxable Income (R)Rate of Tax (R)
1 – 237 00018% of taxable income
237 101 – 370 50042 678 + 26% of taxable income above 237 100
370 501 – 512 80077 362 + 31% of taxable income above 370 500
512 801 – 673 000121 475 + 36% of taxable income above 512 800
673 001 – 857 900179 147 + 39% of taxable income above 673 000
857 901 – 1 817 000251 258 + 41% of taxable income above 857 900
1 817 001 and above644 489 + 45% of taxable income above 1 817 000

The higher your taxable income, the more tax you are due to pay. Your taxable income is your profit from your business less any taxable deductions that are awarded to you as a Sole Trader. 

The deductions that you can utilise include Retirement Annuities, Donations to a Public Benefit Organisation (PBO) and Medical Expenses. These deductions are all calculated differently with different limitations.Retirement fund lump sum benefits consist of lump sums from a pension, pension preservation, provident, provident preservation or retirement annuity fund on death, retirement, or termination of employment due to attaining the age of 55 years, sickness, accident, injury, incapacity, redundancy, or termination of the employer’s trade.

Tax for companies and close corporation

A private company is seen as a legal person in South Africa. These are profit companies and non-profit companies which can be clubs, churches and other charitable organisations.

Profit companies are the most commonly used entity type in South Africa and are the easiest to form. Private companies are mainly owner-run businesses.

Close corporations are another type of entity that were used previously and were very similar to companies, but they can no longer be registered.

For the year ending on any date on or after 31 march 2023.

Small Business Corporations Tax Table

A small bussiness corporation is tax differently  and there are major tax benefits for companies that qualify. However, there are strict rules which need to be met before an entity can qualify as a Small Business Corporation. Here are the requirements:

  • Must be a corporate entity (Close Corporation, Private Company or Personal Liability Company).
  • All shareholders of the entity must all be natural persons.
  • The entity may not have a turnover of more than R 20 million.
  • Shareholders may not hold shares in other companies.
  • Entity may not be a personal service provider.

For the year of assessment 1st April 2023 to 31st March 2024: 

Taxable Income (R)Rate of Tax (R)
1 – 95 7500% of taxable income
95 751 – 365 0007% of taxable income above 95 750
365 001 – 550 00018 848 + 21% of taxable income above 365 000
550 001 and above57 698 + 27% of the amount above 550 000

For companies, close corporations, personal liability companies and those which qualify as a Small Business Corporation, your Net Profit  on which your tax is payable is your total taxable income (excluding any capital proceeds) less any qualified deductions and special allowances.

Once you come to your Net Taxable Income

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