How Salary Deductions Work in South Africa (2026 Guide) (2026)
After three frozen years, Budget 2026 finally moved South Africa’s tax brackets. Here’s the 2026/27 system — brackets, rebates, thresholds and UIF — on one page.
The 2026/27 brackets (from 1 March 2026)
| Annual taxable income | Rate |
|---|---|
| R1 – 245,100 | 18% |
| R245,101 – 383,100 | R44,118 + 26% above R245,100 |
| R383,101 – 530,200 | R79,998 + 31% above R383,100 |
| R530,201 – 695,800 | R125,599 + 36% above R530,200 |
| R695,801 – 887,000 | R185,215 + 39% above R695,800 |
| R887,001 – 1,878,600 | R259,783 + 41% above R887,000 |
| Above R1,878,600 | R666,339 + 45% above R1,878,600 |
Every figure rose +3.4% for inflation — the first adjustment since 2023/24 (previously the first bracket was R237,100). The top rate stays 45% (unchanged since 2017/18).
Rebates and thresholds
Rebates cut the tax bill directly: R17,820 primary (was R17,235), +R9,765 secondary (65–74), +R3,249 tertiary (75+). That lifts the tax-free thresholds to R99,000 / R153,250 / R171,300 a year.
UIF — 1% to R17,712
Employee 1% + employer 1% of remuneration, ceiling R17,712/month (max R177.12/month each side) — unchanged since the 28 May 2021 Gazette notice. It does not reduce taxable income for PAYE. (Note: the figure R17,728 seen on some sites is wrong.)
Residency and exclusions
Residents are taxed on worldwide income; non-residents pay the same progressive rates on SA-source employment income. Not modelled: medical-aid tax credits, retirement-annuity deductions (27.5% to R430,000/year), and the s10(1)(o) foreign-employment-income exemption (up to R1.25m).
How monthly PAYE withholding works
Employers annualise your monthly salary, compute the yearly tax from the tables above, subtract one-twelfth of your rebates, and withhold the result each month — so a mid-year raise can push later months into a higher band. UIF (1% to R17,712) comes off separately and never enters the PAYE calculation. If you earn below the R99,000/year threshold, no PAYE is withheld at all — only UIF.
Worked examples
Example 1 — R30,000/month (under 65): UIF R177.12; PAYE R56,172/year after the R17,820 rebate → net R25,141.88/month.
Example 2 — R15,000/month: UIF R150; PAYE R14,580/year → net R13,635/month.
Common mistakes
1. Old brackets, new year. Anything showing R237,100 as the first bracket is the frozen 2023/24 table — 2026/27 starts at R245,100.
2. UIF as a tax deduction. It isn’t one — keep it out of the taxable-income line.
3. Forgetting the rebate is per person. The R17,820 comes off your computed tax, whatever your income — it’s not phased out.
Try it: South Africa salary calculator →
South Africa — frequently asked questions
South Africa salary FAQs
When does the 2026/27 tax year run?
1 March 2026 to 28 February 2027.
How much is UIF?
1% of remuneration to a R17,712/month ceiling — maximum R177.12/month employee (employer matches).
What’s the top tax rate?
45% above R1,878,600 — unchanged since 2017/18.
Do the new brackets help everyone?
Yes — the +3.4% inflation adjustment to all brackets, rebates and thresholds is the first since 2023/24, so fiscal drag eases slightly.