Tax on a pre-retirement withdrawal on resignation or transfer.
Net withdrawal
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Tax due
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Effective rate
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Cashing out when you resign is the expensive option
When you leave a job and choose to take your pension, provident, or preservation fund in cash rather than transferring it, SARS applies the withdrawal benefits table. This is a different and far harsher table than the one used at retirement. Where retirement gives you R550,000 tax-free, a pre-retirement withdrawal gives you only R27,500. This calculator runs your withdrawal through that table, factors in any earlier withdrawals, and shows the tax, the net cash, and the effective rate so you can see the real cost before you commit.
The withdrawal table band by band
The rates this calculator applies, following the SARS withdrawal benefits table, run as follows. The first R27,500 is free, then 18 percent, 27 percent, and 36 percent on the higher bands. The tiny tax-free amount is the whole point of the table: the system is designed to discourage you from raiding your retirement savings early. Verify the band edges with SARS before relying on them, since the legislated table can change.
- First R27,500: 0 percent
- R27,500 to R726,000: 18 percent
- R726,000 to R1,089,000: 27 percent
- Above R1,089,000: 36 percent
The cost of cashing out R200,000
Say you resign and take R200,000 from your fund in cash, with no earlier withdrawals. Using the rates this calculator applies, the first R27,500 is free, and the remaining R172,500 is taxed at 18 percent, which is R31,050. You walk away with R168,950, an effective rate of 15.5 percent on the whole amount.
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Now picture leaving that same R200,000 invested instead. The chart contrasts the cash you keep today against what is lost to tax, and hints at the far larger compounding loss over the decades to retirement.
Preserve instead, and the tax disappears for now
The single most useful thing to know is that transferring your fund to a preservation fund or your new employer's fund triggers no tax at all. The withdrawal table only applies when you take cash. Under the two-pot system introduced in September 2024, you can also access only your savings pot once a tax year while leaving the larger retirement pot preserved, which softens the all-or-nothing choice people used to face on resignation. If you can avoid the cash-out, you keep both the capital and decades of tax-sheltered growth.
Are prior withdrawals really added to this one?
Yes. SARS aggregates your previous withdrawal lump sums with the current one, applies the table to the running total, and credits the tax already paid. So if you cashed out R200,000 a few years ago, your R27,500 tax-free amount is already used up and your next withdrawal is taxed from the 18 percent band immediately. Repeated cash-outs are taxed progressively harder, which is why the prior withdrawals field matters.
Is a two-pot savings withdrawal taxed on this table?
No. A withdrawal from your two-pot savings component is taxed at your marginal income tax rate, added to your other income for the year, not on this withdrawal benefits table. This calculator models the classic full or partial resignation withdrawal from the retirement portion. The two are taxed under different rules, so check which type of withdrawal you are actually making.