SARS tax tables 2026: income tax rates for individuals and small businesses

Published Friday 14 August 2026

Table of contents

• What are SARS tax tables?
• Individual income tax brackets for 2026/2027
• Tax rebates and thresholds for 2026/2027
• Medical tax credits for 2026/2027
• Small business tax rates for 2026/2027
• Budget 2026: what's new for 2026/27
• How to calculate your income tax in South Africa
• Simplify your small business tax with Xero
• FAQs on SARS tax tables

Key takeaways

• South Africa's 2026/2027 tax year runs from 1 March 2026 to 28 February 2027, with seven individual income tax brackets ranging from 18% to 45%.
• The tax-free threshold for individuals under 65 is R99,000 per year, meaning you won't owe income tax if you earn below this amount.
• Small business corporations (SBCs) pay 0% tax on the first R99,000 of taxable income, and micro businesses earning under R2.3 million can register for simplified turnover tax.
• Budget 2026 raised retirement contribution caps to R430,000, increased the tax-free savings account limit to R46,000 per year, and lifted the capital gains tax annual exclusion to R50,000.

What are SARS tax tables?

The South African Revenue Service (SARS) publishes tax tables each year to set out how much income tax individuals and businesses owe. These tables define the tax brackets, rates, rebates, and thresholds that apply for a specific tax year.

South Africa uses a progressive tax system. This means you don't pay one flat rate on all your income. Instead, your income is split into portions, and each portion is taxed at a different rate. The more you earn, the higher the rate on the top portion of your income.

The 2026/2027 tax year runs from 1 March 2026 to 28 February 2027. The rates in this guide apply to income earned during that period.

How progressive taxation works

Progressive taxation means only the income within each bracket is taxed at that bracket's rate. Your total tax bill is the sum of what you owe in each bracket.

For example, if you earn R300,000 per year, your tax isn't simply 26% of R300,000. Instead, the first R245,100 is taxed at 18%, and the remaining R54,900 is taxed at 26%. This keeps your effective tax rate lower than your marginal rate.

Individual income tax brackets for 2026/2027

These are the seven income tax brackets for individuals for the 2026/27 tax year. You can find the official rates on the SARS website.

• R1 to R245,100: taxed at 18% of taxable income
• R245,101 to R383,100: R44,118 plus 26% of the amount above R245,100
• R383,101 to R530,200: R79,998 plus 31% of the amount above R383,100
• R530,201 to R695,800: R125,599 plus 36% of the amount above R530,200
• R695,801 to R887,000: R185,215 plus 39% of the amount above R695,800
• R887,001 to R1,878,600: R259,783 plus 41% of the amount above R887,000
• R1,878,601 and above: R666,339 plus 45% of the amount above R1,878,600

How to read the tax brackets

The brackets work by layering one rate on top of another. Here's a worked example for someone earning R500,000 per year.

Your first R245,100 is taxed at 18%, which comes to R44,118. The next R138,000 (from R245,101 to R383,100) is taxed at 26%, which adds R35,880. The remaining R116,900 (from R383,101 to R500,000) is taxed at 31%, which adds R36,239.

This means your effective tax rate will always be lower than your top marginal rate, because only a portion of your income is taxed at the highest bracket.

What changed from the previous year

The 2026/2027 tax brackets have been adjusted upward compared to the previous year. This is known as bracket creep adjustment, and it prevents inflation from pushing you into a higher bracket when your real income hasn't changed.

The key differences include:

• Bracket thresholds have increased across all seven tiers (approximately 3.4%)
• The primary rebate rose to R17,820
• The tax-free threshold for under-65s increased to R99,000

These adjustments mean you keep slightly more of your income compared to the previous year, even if your salary stayed the same. If your employer gave you an inflation-linked raise, the bracket adjustment helps ensure that raise translates into real extra take-home pay rather than being absorbed by higher tax.

Tax rebates and thresholds for 2026/2027

Tax rebates reduce the amount of tax you owe, and thresholds determine the minimum income level at which you start paying tax. The 2026/2027 rebates and thresholds are:

• Primary rebate (all individuals): R17,820
• Secondary rebate (age 65 and older): R9,765, in addition to the primary rebate
• Tertiary rebate (age 75 and older): R3,249, in addition to the primary and secondary rebates

The tax-free thresholds that flow from these rebates are:

• Under 65: R99,000 per year
• Age 65 to 74: R153,250 per year
• Age 75 and older: R171,300 per year

What tax rebates mean for you

A rebate is a direct reduction of your tax liability, not a deduction from your income. If you're under 65 and your calculated tax comes to R15,000, the primary rebate of R17,820 wipes it out entirely, meaning you owe nothing.

If you earn below the threshold for your age group, you don't need to submit a tax return unless SARS specifically requests one. However, you may still want to file if you're owed a refund from tax already withheld by your employer.

Medical tax credits for 2026/2027

Medical tax credits reduce your tax bill based on the number of dependants on your medical scheme. For the 2026/2027 tax year, the monthly credits are:

• R376 per month for the first member (the taxpayer)
• R376 per month for the first dependant
• R254 per month for each additional dependant

Over 12 months, a single member receives R4,512 in medical tax credits. A family of two receives R9,024, and a family of four receives R15,120 for the year.

These credits apply regardless of your income level. You claim them through your annual tax return or through your employer's payroll system.

If you're 65 or older and your medical expenses exceed a certain threshold, you may also qualify for additional medical tax credits. These additional credits take into account your total out-of-pocket medical costs for the year. Check with your tax practitioner or SARS to confirm whether you qualify for this extra relief.

Small business tax rates for 2026/2027

South Africa offers several tax structures designed to reduce the burden on small businesses. The structure that applies to your business depends on your business type, annual turnover, and how it's registered.

Small business corporation (SBC) tax brackets

If your business qualifies as a small business corporation, you benefit from reduced, progressive tax rates on taxable income. To qualify, your business must be a close corporation, private company, or personal liability company with gross income under R20 million per year. All shareholders must be natural persons, and no shareholder may hold shares in another company.

The SBC tax brackets for 2026/2027 are:

• R0 to R99,000: 0% (no tax)
• R99,001 to R365,000: 7% of the amount above R99,000
• R365,001 to R550,000: R18,620 plus 21% of the amount above R365,000
• R550,001 and above: R57,470 plus 27% of the amount above R550,000

This means a qualifying SBC with R400,000 in taxable income pays R0 on the first R99,000, then 7% on the next R266,000 (R18,620), and 21% on the remaining R35,000 (R7,350).

That's an effective tax rate of 6.5% and a tax bill of R25,970 – compared to R108,000 under the standard 27% corporate rate.

Turnover tax for micro businesses

Turnover tax is a simplified tax system for very small businesses, sole proprietors, and partnerships with qualifying turnover of R2.3 million or less per year. It replaces income tax, capital gains tax, and dividends tax with a single annual payment based on turnover. Businesses registered for turnover tax are also not required to separately register for VAT, provided their turnover stays below the R2.3 million threshold.

The turnover tax rates for 2026/2027 are:

• R0 to R600,000: 0% (no tax)
• R600,001 to R950,000: 1% of the amount above R600,000
• R950,001 to R1,400,000: R3,500 plus 2% of the amount above R950,000
• R1,400,001 to R2,300,000: R12,500 plus 3% of the amount above R1,400,000

Turnover tax is calculated on your gross turnover, not your taxable profit. This makes it simpler to calculate, but it may not suit every business. If your profit margins are low, you could end up paying more under turnover tax than under the normal income tax system. It's worth comparing both options before you register.

Standard company tax rate

Companies that don't qualify for SBC rates or turnover tax pay a flat corporate income tax rate of 27% on all taxable income. This rate applies to all registered companies in South Africa, regardless of size.

Budget 2026: what’s new for 2026/27

The 2026 National Budget introduced several changes that affect both individuals and small businesses. Here are the most significant updates:

• Retirement contribution cap: increased to R430,000 per year, up from R350,000.
• Tax-free savings account (TFSA) annual limit: raised to R46,000 per year, up from R36,000.
• Capital gains tax (CGT) annual exclusion: increased to R50,000, up from R40,000.
• CGT primary residence exclusion: raised to R3,000,000, up from R2,000,000.

These changes apply from the 2026/2027 tax year onward. Together, they give you more room to save, invest, and plan for the future while reducing your overall tax liability.

How to calculate your income tax in South Africa

Follow this process to work out what you owe for the 2026/2027 tax year.

1. Add up all your taxable income from employment, rental income, investments, and any other sources for the tax year (1 March 2026 to 28 February 2027).
2. Subtract any allowable deductions, such as retirement fund contributions (up to R430,000 or 27.5% of taxable income, whichever is lower), travel allowances, and home office expenses.
3. Find your bracket in the tax table. Take the base figure, then add the applicable rate on the amount your income exceeds that bracket's lower threshold.
4. Subtract your applicable rebates (primary: R17,820; secondary if 65 or older: R9,765; tertiary if 75 or older: R3,249).
5. Subtract your medical tax credits based on the number of dependants on your medical scheme.
6. The result is your final tax liability for the year.

Here's a worked example for someone earning R450,000 per year, under 65, with no dependents on medical aid.

R450,000 falls in the third bracket (R383,101 to R530,200). Using the tax table: R79,998 plus 31% of R66,900 (the amount above R383,100) = R79,998 + R20,739 = R100,737.

Subtract the primary rebate: R100,737 - R17,820 = R82,917.

Your final tax for the year: R82,917. That's an effective tax rate of about 18.4%.

If you had oneo dependant on your medical scheme, you'd subtract an additional R9,024 in medical tax credits (R376 x 2 members x 12 months), bringing your final tax down to R73,893. Your effective rate would drop to about 16.4%.

Simplify your small business tax with Xero

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FAQs on SARS tax tables

Here are answers to common questions about SARS tax tables and income tax in South Africa.

What are the SARS tax brackets for 2026/2027?

There are seven brackets, starting at 18% for income up to R245,100 and rising to 45% for income above R1,878,600. Each bracket applies only to the portion of income within that range.

How much tax do I pay on my salary in South Africa?

Your tax depends on your total taxable income, applicable rebates, and any deductions you claim. Find your bracket in the tax table, apply the rate to the amount above that bracket's lower threshold, then subtract your rebates and medical credits.

What is the tax-free threshold for 2026?

If you're under 65, you don't owe income tax on earnings below R99,000 per year. The threshold rises to R153,250 for those aged 65 to 74, and R171,300 for those 75 and older.

What are the small business tax rates in South Africa?

Qualifying small business corporations pay 0% on the first R99,000, then 7%, 21%, and 27% on higher portions. Micro businesses with turnover under R2.3 million can register for simplified turnover tax instead.

What changed in the 2026 Budget for income tax?

The retirement contribution cap rose to R430,000, the TFSA annual limit increased to R46,000, and the CGT annual exclusion went up to R50,000. The CGT primary residence exclusion also increased to R3,000,000.

What is the turnover tax threshold for 2026?

The qualifying turnover threshold for turnover tax is R2.3 million per year, up from the previous R1 million limit. Turnover tax replaces income tax, CGT, and dividends tax with a single payment based on your business's turnover. Businesses registered for turnover tax are also not required to separately register for VAT, provided their turnover stays below the R2.3 million threshold.