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Home › Provisional Tax South Africa 2026

Provisional Tax in South Africa — Who Must Pay and How It Works

Freelancers, business owners, and anyone with non-PAYE income must register. Here's how to calculate your payments and avoid penalties.

First payment due

End of August

Second payment due

28 February

Underestimate penalty

20%

Non-PAYE threshold

R30,000+

Provisional Tax Calendar — February Year-End Taxpayer

PeriodDeadlineWhat to PayBasis
1st payment31 August 202550% of estimated annual taxMin = 90% of actual OR prior year
2nd payment28 February 2026Remaining balance of annual taxEstimate within 80% of actual
3rd payment (voluntary)30 September 2026Top-up to avoid interestBring total to final liability
Final return31 January 2027ITR12 submissionReconcile actual vs payments

Provisional Tax Worked Example — Freelancer Earning R600,000/year

ItemAmount
Estimated annual taxable incomeR600,000
Estimated annual income tax (from brackets)~R159,000
Less primary rebate(R17,235)
Estimated annual tax payable~R141,765
First provisional payment (Aug, 50%)~R70,882
Second provisional payment (Feb)~R70,883
Top-up if actual income was R650,000~R14,000 due
Penalty if estimate was >20% low20% of shortfall

The Basics of Provisional Tax for Freelancers and Business Owners

Provisional tax is essentially a system of paying your income tax in advance, spread across the year, rather than in one lump sum at year-end. For salaried employees, PAYE handles this automatically every month. For the self-employed, rental property owners, freelancers, and business owners, no one deducts tax on your behalf — you have to do it yourself, twice a year.

The reason SARS requires provisional tax (rather than just waiting for your year-end return) is cash flow for the state. If every business owner and freelancer paid their full annual tax bill in February/March, SARS would have a very uneven cash flow. Provisional payments smooth this out and, from SARS's perspective, also reduce the risk of non-payment.

For the individual taxpayer, the challenge is estimating income before the year is complete. Your August payment is based on an estimate of your full year income — which is still half-unearned at that point. Many freelancers and small business owners simply use their prior year's taxable income as the base (which SARS calls the 'basic amount') to avoid having to estimate.

How to Avoid Provisional Tax Penalties in South Africa

The two key rules for avoiding SARS penalties on provisional tax: First, your second payment estimate must be at least 80% of your actual taxable income (or the basic amount from your last SARS assessment, whichever gives a higher payment). Second, any shortfall between your provisional payments and your actual tax liability must be paid on time to avoid interest charges.

A practical approach: use your prior year assessed income as the basis for your first payment. This is always safe because SARS will not penalise you for underpayment on the first payment if you use the basic amount. For the second payment, make your best estimate of full-year income. If you're unsure, it's generally better to overestimate slightly — you'll get the excess back after your final assessment.

The voluntary third payment (due about 7 months after year-end) is particularly useful if you've realised your income was higher than you estimated. Paying the balance voluntarily before SARS assesses you stops the interest clock running and avoids the 20% underestimation penalty.

Frequently Asked Questions

You must register as a provisional taxpayer if you receive income other than remuneration subject to PAYE. This includes: self-employed individuals and freelancers; directors of companies; people with rental income; those with investment income above R30,000/year (under 65) or R34,500/year (65+); and anyone whose taxable non-PAYE income exceeds R30,000. Salaried employees with only PAYE income are generally exempt.
There are two compulsory provisional tax payments per year: First payment: Within 6 months of the start of your tax year (for February year-end taxpayers, this is end of August). Second payment: At the end of your tax year (28 February for most individuals). A voluntary third payment can be made within 7 months of year-end to top up if your estimate was too low, avoiding penalties.
Your estimate must be at least 90% of your actual taxable income for the year, or equal to your assessed income from the previous year (whichever is lower, for the first payment). SARS provides a basic amount based on your last assessment. You can use this as your first payment estimate to avoid penalties. For the second payment, your estimate must be within 80% of actual income.
If your second provisional tax estimate is more than 20% below your actual taxable income, SARS can impose a 20% penalty on the underpayment (the shortfall between your estimate and your actual tax). Additionally, interest at the prescribed rate (currently around 11.5%) applies to late or underpaid amounts from the date the payment was due.
Yes — register on SARS eFiling. Navigate to 'Register' and add Provisional Tax to your tax types. Once registered, you'll need to submit an IRP6 (provisional tax return) for each payment period. Keep records of all income and expenses throughout the year so your estimate is as accurate as possible.

Related Tools & Guides

How PAYE Works SA SARS eFiling Guide Business Tax Estimator VAT Registration SA Register a Company SA

Disclaimer: This page is for informational purposes only and does not constitute financial, tax, or legal advice. Always consult a qualified professional before making financial decisions.

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