Understanding how to calculate your income tax accurately is essential for effective financial planning in South Africa. With the 2025/26 tax year underway, knowing how to use a tax calculator can save you time, help you maximise deductions, and avoid surprises come tax season.
How South African Income Tax Works
South Africa uses a progressive tax system where the tax rate increases as your income rises. The tax year runs from 1 March to 28 February the following year. For the 2025/26 tax year, there were no changes to the tax brackets, rebates, or medical tax credits, meaning the thresholds from the previous year remain the same. The South African Revenue Service (SARS) collects income tax, which funds public services like healthcare, education, and infrastructure.
Understanding Tax Brackets and Rates for 2025/26
The SARS tax tables divide taxable income into brackets, each with a specific tax rate. For example, income up to R237,100 is taxed at 18%, while income above R1,817,000 is taxed at 45%. Here are the key brackets for 2025/26:
R1 – R237,100: 18%
R237,101 – R370,500: 26% on income above R237,100 plus R42,678
R370,501 – R512,800: 31% on income above R370,500 plus R77,362
R512,801 – R673,000: 36% on income above R512,800 plus R121,475
R673,001 – R857,900: 39% on income above R673,000 plus R179,147
R857,901 – R1,817,000: 41% on income above R857,900 plus R251,258
Above R1,817,000: 45% on income above R1,817,000 plus R644,489
Using a Tax Calculator
A tax calculator simplifies this process by doing the math for you. You enter your annual or monthly income, any bonuses, allowances, and deductions such as retirement fund contributions or medical aid payments. The calculator then applies the SARS tax rates and rebates automatically to estimate your tax payable and your net take-home pay.
For example, if your taxable income is R500,000, a calculator will identify which bracket you fall into, apply the base tax for that bracket, then calculate the tax on the income above the lower threshold. This approach saves you from manually applying the complex tax brackets and reduces errors.
Why It’s Important to Use the Latest Tax Rates
Tax brackets and rebates can change annually based on the National Budget Speech. For 2025/26, no changes were made, but it’s important to always use an updated tax calculator that reflects the current SARS tables to avoid miscalculations. Some popular options include tools from SARS itself, financial websites like JustMoney, TaxTim, and banks such as FNB and Standard Bank.
Maximising Your Tax Deductions
Tax calculators often allow you to input deductions like retirement annuity contributions, medical scheme fees, or travel allowances. These reduce your taxable income and thus your overall tax liability. For instance, South Africans can claim deductions for contributions to retirement funds up to certain limits, which can significantly lower the tax payable.
Practical Tips for South African Taxpayers
First, gather all your income sources including side hustles, as SARS requires declaring all taxable income. Next, use a user-friendly calculator that guides you through each step clearly—this is especially helpful if you’re juggling multiple income streams. Finally, review your results and consider consulting a tax professional if your situation is complex.
By understanding how to use a tax calculator and keeping up to date with SARS tax tables, you can take control of your finances, plan your budget more effectively, and keep more of your hard-earned money.
