First and second provisional-tax payments on estimated taxable income.
This payment
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Estimated annual tax
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First payment
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Why provisional tax exists at all
If you earn a salary, your employer deducts PAYE every month and SARS gets its money as you go. Provisional taxpayers, the self employed, landlords, freelancers, company directors with side income, have no employer doing that for them. So SARS asks them to estimate their annual taxable income and pay the tax in two big instalments during the year, with a third optional top up to mop up any shortfall. This calculator works out what each of those instalments should be, so you are not blindsided by a bill at filing.
The two-payment rhythm
The first payment falls roughly at the middle of the tax year and the second at year end. The logic the tool follows is simple once you see it. First it computes the full tax on your estimated income, applying the SARS progressive scale and subtracting your age based rebate. The first payment is then about half that annual tax, less half of any PAYE already withheld. The second payment is the full annual tax, less all your PAYE, less whatever you already paid in the first instalment. Done this way, the two payments together cover the year's tax.
The rebate that quietly lowers every bill
Before any payment is split, your gross tax is reduced by the primary rebate, with extra rebates stacked on if you are older. The figures this calculator applies are a primary rebate of R17,235 for everyone, a further R9,444 from age 65, and another R3,145 from age 75. These are the numbers to confirm with SARS each year, but the principle that a flat rebate trims your tax before instalments are calculated does not change.
A R600,000 estimate, worked through
Say you estimate R600,000 of taxable income, you are under 65, and no PAYE has been withheld. Here is how the first payment is built, using the rates this calculator applies.
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With no PAYE, the two payments are equal halves of the R135,632 annual tax. The moment PAYE enters, that symmetry breaks, because PAYE is credited across both instalments and reduces what you still owe.
The underestimation penalty trap
The biggest risk with provisional tax is lowballing your second estimate. SARS can levy a penalty if your second estimate is too far below your actual taxable income, with the test tightening once taxable income passes R1,000,000. Below that line you can lean on a safe harbour tied to your last assessment, above it you are expected to land within 80 percent of the real figure. A practical tip: if your income surged late in the year, make a voluntary third payment before the deadline to close the gap and dodge interest, the tool's two figures are the floor, not a ceiling.
Who needs to make provisional payments?
Anyone earning meaningful income that has no PAYE deducted, business profit, rental, investment income above the exemption, or a mix. If you only draw a salary with PAYE already taken off, you are generally not a provisional taxpayer and this tool is not for you. If you are unsure whether you cross the line, check your status first before working out payment amounts.
What if I already paid PAYE on part of my income?
Enter it in the PAYE field and the tool credits it against your provisional payments. A director who draws a salary and also runs a side business, for instance, has PAYE on the salary but owes provisional tax on the business profit. The calculation halves the PAYE against the first payment and applies the rest against the second, so you do not pay twice on the same income.