Skip to main content
    Payroll Africa
    Free trial
    Benefits

    Provident fund

    A retirement fund similar to a pension fund, harmonised with pension fund rules since 1 March 2021.

    Full definition

    Provident funds were traditionally accessible as a full lump sum at retirement. Since 1 March 2021, new contributions to provident funds follow the same one-third/two-thirds annuity rule as pension funds. Amounts vested at 1 March 2021 remain accessible as a lump sum.

    See also

    Pension fund
    A retirement savings vehicle where contributions are tax-deductible (up to 27.5% of income, capped at R350,000/year).
    Two-pot retirement system
    From 1 September 2024, one-third of new retirement contributions go to a Savings Pot; two-thirds to a Retirement Pot.

    Automate Provident fund in your payroll

    Payroll Africa handles Provident fund calculations automatically for South African employers — SARS-aligned for 2026/27. From R90/month.

    Start free trial Back to glossary
    Browse the full South African payroll glossary — 55 terms explained.

    Let payroll handle Provident fund for you

    Payroll Africa calculates it automatically every month for South African employers — SARS-aligned, with payslips, EMP201 and IRP5 included.

    Start free trial Book a 15-min demo Free migration quote
    • No card required
    • 30-day free trial
    • Free migration from Sage, SimplePay, PaySpace or Excel
    • Cancel anytime

    Run Payroll Africa alongside your current system until you're happy to switch.