It’s the question behind every payslip: “Where does all my tax actually go — and how is it worked out?” 🤔

The good news is that South Africa’s income tax system, while it looks intimidating, follows a simple logic once someone explains it properly. So let’s do that, with the actual tax brackets 2026 numbers, in plain language.

⚠️ These are the official figures for the 2027 tax year (1 March 2026 – 28 February 2027), but tax is personal, confirm your own calculation on SARS eFiling or with your accountant.

📊 The 2026/27 tax brackets

South Africa uses a progressive system — you don’t pay one rate on everything. Your income is sliced into bands, and each band is taxed at its own rate. For the 2027 tax year (1 March 2026 – 28 February 2027), the brackets for individuals are:

🟢 R1 – R245,100: 18% of taxable income

🟡 R245,101 – R383,100: R44,118 + 26% of the amount above R245,100

🟠 R383,101 – R530,200: R79,998 + 31% of the amount above R383,100

🔵 R530,201 – R695,800: R125,599 + 36% of the amount above R530,200

🟣 R695,801 – R887,000: R185,215 + 39% of the amount above R695,800

🔴 R887,001 – R1,878,600: R259,783 + 41% of the amount above R887,000

⚫ R1,878,601 and above: R666,339 + 45% of the amount above R1,878,600

The brackets were adjusted upward by about 3.4% for inflation this year — the first inflation relief in a couple of years, offering mild respite from “bracket creep” 📈

❓ Does moving into a higher bracket tax all my income more?

No — and this is the single most misunderstood thing about tax 🙌

A pay rise that pushes you into a higher bracket does not mean your whole salary is suddenly taxed at the higher rate. Only the rand above each threshold is taxed at that band’s rate. Everything below stays taxed at the lower rates.

So earning one rand into the next bracket never leaves you worse off overall. You never “lose money by getting a raise” — that’s a myth 💡

💰 Rebates: the discount everyone gets

Here’s the part that softens the blow. After your tax is calculated, SARS subtracts a rebate, a fixed amount off your tax bill. For 2026/27:

🧍 Primary rebate (everyone): R17,820

🧓 Secondary (age 65–74): an extra R9,765

👵 Tertiary (age 75+): a further R3,249

A rebate is even better than a deduction, it comes straight off the tax you owe, rand for rand 🎯

🚪 The tax threshold: below this, you pay nothing

Because of the primary rebate, you pay no income tax at all until your taxable income crosses the tax threshold:

🧍 Under 65: R99,000 per year

🧓 65–74: R153,250 per year

👵 75 and older: R171,300 per year

Earn below your threshold and your tax calculation reduces to nil (though you may still need to file a return in some cases).

❓ What’s the difference between a deduction, a credit and a rebate?

People mix these up constantly, so here’s the plain version:

📉 Deduction — reduces your taxable income before tax is calculated (e.g. retirement annuity contributions). Worth more the higher your bracket.

💳 Medical tax credit — a fixed amount off your tax for medical scheme membership (R376/month for the first two members, R254 for each additional dependant in 2026/27).

🎁 Rebate — a fixed amount off your tax, based on age, applied automatically.

Deductions shrink the income that gets taxed; credits and rebates shrink the tax itself.

❓ How can I legally pay less tax?

Entirely legitimate ways to reduce your bill:

🏦 Retirement contributions — deductible up to 27.5% of income (capped at R430,000/year for 2026/27). The single most powerful lever for most people.

🏥 Claim your medical credits — and out-of-pocket medical expenses if applicable

🎁 Donations to Section 18A public benefit organisations — deductible up to 10% of taxable income

🏠 Home office — if you genuinely qualify

💼 Claim every legitimate work expense you’re entitled to

This is exactly where a good accountant pays for themselves, making sure you claim everything you’re allowed to, and nothing you’re not. Many auto-assessed taxpayers leave money unclaimed simply because SARS doesn’t know about these, see our guide on checking your auto-assessment.

❓ Am I a provisional taxpayer?

If you earn significant income that isn’t taxed via PAYE, freelance work, rental, business or investment income, you may be a provisional taxpayer, meaning you pay tax twice a year rather than just through your salary. Worth checking, because the penalties for getting it wrong add up.

🎯 Understand it once, benefit every year

Tax feels complicated because nobody explains it, but the core is simple: progressive brackets, minus rebates, minus what you can legitimately claim. Understand that, and you can plan around it instead of just wincing at your payslip.

The team at Go2 Accounting helps South Africans understand exactly what they owe, claim every deduction they’re entitled to, and structure their income to keep their tax bill as low as the law allows.

Because the goal isn’t to pay no tax, it’s to pay not a rand more than you have to 😉