Annual SARS income tax on your taxable income, after age rebates.
Annual income tax
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Rebate applied
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Effective rate
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Worked example
Take a 40-year-old earning a taxable income of R450,000 for the 2025/26 year. SARS applies the 7-band scale to the whole amount. The first R237,100 is taxed at 18%, the slice from R237,100 to R370,500 at 26%, and the slice from R370,500 to R450,000 at 31%. That gives R42,678 plus R34,684 plus R24,645, a gross tax of R102,007. Everyone under 65 gets the primary rebate of R17,235, so the tax payable is R102,007 less R17,235, which is R84,772 for the year. That is an effective rate of 18.8% on R450,000, even though the top rand is taxed at the 31% marginal rate.
| Step | Amount |
|---|---|
| Band 1: R0 to R237,100 at 18% | R42,678 |
| Band 2: R237,100 to R370,500 at 26% | R34,684 |
| Band 3: R370,500 to R450,000 at 31% | R24,645 |
| Gross tax | R102,007 |
| Less primary rebate | minus R17,235 |
| Income tax payable | R84,772 |
How it is calculated
South Africa uses a progressive scale, so your income is sliced across seven bands and each slice is taxed at its own rate. Only the rands that fall inside a higher band attract the higher rate, which is why your effective rate sits well below your marginal rate. After the gross tax is worked out, SARS subtracts a fixed rebate that depends on your age: the primary rebate for everyone, a secondary rebate added from age 65, and a tertiary rebate added from age 75. If your income falls below the tax threshold for your age, the rebates wipe out the tax entirely and nothing is payable. The 2025/26 bands and rebates were left unchanged from the prior year, so bracket creep quietly raises real tax as salaries rise with inflation.