SARS Provisional Tax: Who Must Pay and How It Works
Provisional tax is a method of paying income tax in advance during the tax year, rather than in a single lump sum at year end. It is not a separate tax but a way of spreading your income tax liability across the year. Provisional taxpayers make two compulsory payments per year based on estimated taxable income.
Salaried employees whose only income is subject to PAYE are generally NOT provisional taxpayers, unless they also earn significant other income.
Who Must Register for Provisional Tax?
You are a provisional taxpayer if you receive income that is not subject to PAYE (Pay As You Earn) deductions by an employer, or if your non-employment income exceeds certain thresholds.
- Self-employed individuals and sole proprietors
- Freelancers, consultants and contractors
- Commission earners not on PAYE
- Directors of private companies
- Members of close corporations
- Rental income earners
- Individuals earning interest above R30,000 per year (under 65) or R34,500 (aged 65 and older)
- Individuals earning dividends from foreign companies
- Shareholders receiving foreign dividends
Provisional Tax Payment Deadlines for 2026/27
| Payment | Period | Deadline | Basis of Calculation |
|---|---|---|---|
| First payment (1st provisional) | 1 March 2026 to 31 August 2026 | 31 August 2026 | 50% of estimated annual tax liability |
| Second payment (2nd provisional) | 1 September 2026 to 28 February 2027 | 28 February 2027 | 100% of estimated annual tax less first payment |
| Third payment (voluntary top-up) | After 28 February 2027 | 30 September 2027 (6 months after year end) | Voluntary payment to avoid penalties |
How to Calculate Provisional Tax
- Estimate your total taxable income for the full tax year including all sources: salary, freelance income, rental, interest, dividends.
- Apply the tax bracket table to your estimated taxable income to calculate the gross tax.
- Subtract applicable rebates (primary, secondary, tertiary) and medical tax credits.
- Subtract any PAYE already deducted by an employer during the year.
- The result is your estimated annual provisional tax liability.
- For the first payment: pay 50% of this annual liability.
- For the second payment: calculate the full annual liability again with updated income estimates and pay the balance after deducting the first payment and any PAYE.
Base your provisional tax estimates on realistic income projections. Use last year as a starting point and adjust for any expected changes. If in doubt, rather over-estimate and claim a refund when you file.
Under-Estimation Penalties
SARS imposes a 20% penalty on the second provisional tax payment if you under-estimated your taxable income and the shortfall exceeds certain limits. This is designed to prevent taxpayers from deliberately under-estimating to defer tax.
For the 2025/26 year, if your taxable income is below R1,000,000, your second payment estimate must be at least 90% of your actual taxable income. If income exceeds R1,000,000, the estimate must be at least 80% of actual income.
How to Submit Provisional Tax Returns on eFiling
- Log in to www.sarsefiling.co.za.
- Navigate to Returns > Returns Issued and look for IRP6 (provisional tax return) for the relevant period.
- Complete the IRP6 by entering your estimated taxable income for the year.
- eFiling will calculate the tax due automatically based on your estimate.
- Submit the return and make the payment via eFiling using your bank account (EFT) or at a bank.
- Ensure payment is made before the deadline. Late payment attracts a 10% penalty and interest at the prescribed rate.
Third Provisional Payment (Voluntary Top-Up)
If your actual taxable income turns out to be higher than estimated, and you did not pay enough tax via the two compulsory payments, you can make a voluntary third payment within 6 months after year end (by 30 September 2027 for the 2026/27 tax year).
Making this voluntary payment avoids penalties on under-estimation, even if you did not fully pay your liability by the second payment deadline.