Tax Return for Students: Do You Need to File?

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For many South African students, the question of whether they need to file a tax return can be both confusing and intimidating. With the South African Revenue Service (SARS) continuously updating tax regulations and filing requirements, understanding your obligations as a student is crucial to avoid penalties, claim possible refunds, and stay compliant with the law. The 2025 tax season has introduced new filing requirements and thresholds, making it essential for students to be informed about when and how to file their returns. Many students earn income from part-time jobs, bursaries, scholarships, or freelance work, which may or may not require filing a tax return depending on the amount earned and the nature of the income. Additionally, students who have investments, receive interest, or have any other form of taxable income must navigate the complexities of SARS regulations to ensure proper compliance. This article provides an in-depth analysis of the current South African tax landscape for students, including practical steps, examples, and expert guidance to help students make informed decisions about filing their tax returns in 2025.

Understanding Tax Filing Obligations for Students in South Africa

Tax filing in South Africa is governed by SARS, which annually updates the filing process, thresholds, and requirements. For students, the key question is: Do you need to file a tax return? The answer depends on multiple factors including income level, source of income, and whether you are registered as a taxpayer. The 2025 tax year (covering 1 March 2024 to 28 February 2025) has specific thresholds that determine filing obligations.

Who Needs to File a Tax Return?

According to SARS, the general rule is that individuals earning below the tax filing threshold and whose income comes solely from one employer with Pay-As-You-Earn (PAYE) withholding may not need to file a tax return as SARS typically auto-assesses these cases. However, if you:

  • Earn more than R95,750 (if younger than 65 years) in taxable income, or above the higher thresholds for older taxpayers (R148,217 for ages 65 to 74 and R165,689 for 75+),
  • Have income from multiple sources, such as freelance work, rental income, interest, dividends, or capital gains,
  • Are a provisional taxpayer or self-employed,
  • Have received bursaries or scholarships exceeding certain limits,
  • Or have been requested by SARS to file a return,

you are required to file a tax return.

Types of Income Commonly Earned by Students

Students often have diverse income streams, each treated differently by SARS:

  • Part-time employment income: Usually subject to PAYE deductions by the employer, potentially requiring no filing if below threshold and no other income.
  • Bursaries and scholarships: Amounts used for tuition are generally exempt, but if bursaries cover living expenses or exceed R36,000 per year, they may be taxable.
  • Freelance or gig work: Income from freelancing is taxable and may require filing, especially if tax was not deducted at source.
  • Interest and dividends: Interest earned above R23,800 (for individuals under 65) or R34,500 (65 and older) must be declared.
  • Capital gains: Gains from selling assets like property or shares may trigger filing requirements if the gain exceeds R40,000.

Step-by-Step Guide: How Students Can File Their Tax Return

Filing a tax return may seem daunting for students, but following a structured process can simplify the experience. Here is a detailed step-by-step guide for the 2025 tax season:

Step 1: Register for a Tax Number

If you have never filed a tax return before, you must register with SARS to obtain a tax reference number. Registration can be done online via SARS eFiling, through your employer, or at a SARS branch. You will need your South African ID or passport, and for minors, additional documentation such as a birth certificate and guardian ID.

Step 2: Gather Your Documentation

Before you start filing, collect all relevant documents:

  • Your IRP5 or IT3(a) certificates from employers or institutions
  • Statements for any interest earned from banks
  • Proof of bursaries or scholarships received
  • Receipts for allowable deductions such as medical expenses or retirement contributions
  • Details of any freelance income or business activities

Step 3: Log in to SARS eFiling

The SARS eFiling platform is the primary channel for submitting tax returns. If you are registered, log in at the SARS website. If not, register as described in Step 1. SARS also offers the SARS MobiApp for mobile filing, which may be more convenient for students.

Step 4: Complete the ITR12 Tax Return Form

Once logged in, select the ITR12 form (Income Tax Return) for individuals. SARS often prepopulates sections of your return with data from employers and financial institutions, but you must verify and complete any missing information, especially if you have additional income or deductions.

Step 5: Review and Submit Your Return

Carefully review your tax return for accuracy. Filing early is recommended to avoid technical issues and to speed up any refund processing. Submit your return electronically before the deadline, which for the 2025 tax season is 20 October 2025 for most individuals.

Step 6: Monitor SARS Communication

After submitting, SARS may request additional information or issue an assessment. Keep track of your SARS eFiling profile and respond promptly to any queries to avoid penalties.

Real-World Examples and Case Studies

Understanding tax filing through practical examples helps clarify students’ obligations.

Case Study 1: Part-Time Student Employee

Thandi is a 22-year-old university student who works part-time earning R7,000 per month from a retail job. Her total annual income is R84,000, below the tax threshold of R95,750 for her age group. SARS automatically assesses her PAYE deductions, so she is not required to file a return unless she has other income sources. However, if she had freelance income or interest exceeding the exemption, she would need to file.

Case Study 2: Student with Scholarship and Freelance Income

Lwazi receives a scholarship of R40,000 per year and freelances as a graphic designer, earning R30,000 annually. Since his scholarship exceeds the R36,000 exemption and he has additional freelance income, he must file a tax return. He registers on SARS eFiling, declares both incomes, claims allowable expenses related to freelancing, and submits his return before the deadline. He qualifies for a refund due to overpaid PAYE and deductible expenses.

Case Study 3: International Student with South African Income

Maria is an international student from Germany studying in Johannesburg. She works part-time and earns R100,000 annually. As a tax resident, she must file a return. Additionally, if she earns interest from South African sources or disposes of assets, she must declare these. SARS requires her to file electronically and comply with all tax obligations, even as a non-resident for some purposes.

Current Data and Statistics on Student Tax Filing in South Africa

Recent statistics from SARS and financial institutions provide insight into student tax filing trends and compliance:

  • In 2024, approximately 1.2 million individual tax returns were filed by taxpayers under 30, a significant portion of whom were students or young workers.
  • Only about 60% of eligible students file returns annually, often missing out on refunds or facing penalties for late filing.
  • The average refund claimed by student taxpayers in 2024 was around R3,500, primarily from overpaid PAYE and deductible expenses.
  • Interest rates on SARS late payment penalties currently stand at 7.75% per annum, emphasizing the importance of timely filing.
  • SARS processing times have improved, with early filers receiving refunds within 3-5 weeks, compared to up to 8 weeks for late filers.

Expert Recommendations and Practical Tips for Students

Tax experts and SARS officials recommend the following best practices for students to manage their tax affairs effectively:

  • Register early: Even if you earn below the threshold, registering with SARS prepares you for future filing obligations and enables access to tax benefits.
  • Keep detailed records: Maintain receipts, contracts, and statements for all income and expenses related to your studies and work.
  • Understand bursary rules: Know that bursaries covering tuition are exempt, but living allowances may be taxable.
  • File electronically: Use SARS eFiling for quick, accurate submissions and faster refunds.
  • File early: Avoid last-minute rush, technical glitches, and penalties by submitting your return as soon as SARS opens the filing season.
  • Claim all deductions: Medical expenses, travel costs, and retirement contributions can reduce taxable income.
  • Seek professional help if needed: Tax practitioners or university financial advisors can assist with complex returns.
  • Monitor SARS communications: Respond promptly to any SARS queries or audit requests.

Comparison Table: Filing Requirements for Students by Income Type

Income Type Tax Threshold Filing Requirement Notes
Part-time Employment (PAYE deducted) Below R95,750 (under 65) No filing required if no other income SARS auto-assesses PAYE taxpayers
Bursaries/Scholarships Up to R36,000 exemption File if bursary exceeds exemption or covers living expenses Excess bursary is taxable income
Freelance/Gig Income No exemption threshold Filing required regardless of amount Declare gross income, claim expenses
Interest Income R23,800 (under 65) File if interest exceeds threshold or combined income requires filing Includes interest from all sources
Capital Gains R40,000 annual exclusion File if gains exceed exclusion Applies to asset sales, including shares and property

Consequences of Not Filing or Late Filing

Failing to submit your tax return when required can lead to several negative consequences:

  • Administrative penalties: SARS imposes fines starting at R250 for late filing, escalating with continued non-compliance.
  • Interest on unpaid tax: Interest charged at 7.75% per annum on outstanding tax amounts.
  • Estimated assessments: SARS may issue assessments based on estimated income, which can be higher than actual tax due.
  • Credit record impact: Non-compliance can affect your credit score and ability to obtain loans.
  • Legal action: Persistent non-filing may lead to summons or prosecution.

Actionable Steps for Students to File Their Tax Return Effectively

For students preparing to file their 2025 tax returns, here are practical tips to ensure a smooth process:

  • Confirm your tax status: Use the SARS online tools or contact SARS to verify if you need to file based on your income and circumstances.
  • Register for SARS eFiling early: Avoid delays by setting up your account ahead of the filing season opening in July 2025.
  • Organise your documents: Create a folder (physical or digital) for all tax-related documents throughout the year.
  • Review SARS prepopulated data: Carefully check the accuracy of your prefilled return and add any missing income or deductions.
  • Use SARS auto-assessment if eligible: Some taxpayers qualify for auto-assessment, which speeds up the process.
  • Submit before the deadline: File your return well before 20 October 2025 to avoid issues.
  • Keep copies of submissions: Save confirmation emails, receipts, and tax return copies for future reference.
  • Seek assistance: If unsure, consult a tax professional or your university’s financial aid office.

Conclusion: Staying Compliant and Maximising Benefits as a Student Taxpayer

Filing a tax return as a student in South Africa can initially appear complex, but understanding your obligations and following a clear process simplifies the task. The 2025 tax season brings updated thresholds and filing requirements that every student should be aware of to avoid penalties and potentially claim refunds. By registering with SARS, accurately reporting income, and filing on time through eFiling, students not only remain compliant but also build a positive tax record that benefits their future financial activities. Taking proactive steps such as maintaining detailed records and seeking expert advice when needed ensures a smooth tax filing experience. Ultimately, filing your tax return responsibly can provide financial advantages and peace of mind, empowering you to focus on your studies and career development.

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