SARS tax tables — brackets, rebates and thresholds
PAYE is calculated by annualising an employee's remuneration, applying the SARS income tax table for the year of assessment, subtracting the applicable rebates and medical scheme fees tax credits, then dividing back to the pay period. The brackets and rebates are announced in the February Budget and apply from 1 March.
Payroll Africa Editorial · SARS Payroll Compliance Team
The Payroll Africa editorial team is composed of registered tax practitioners, payroll administrators and BCEA specialists who maintain the SARS PAYE, UIF, SDL and ETI engines that power the platform. Every article is reviewed against the current SARS BRS and Basic Conditions of Employment Act before publication.
- SARS registered tax practitioners
- SAPA-affiliated payroll administrators
- BCEA and LRA compliance reviewers
Last updated 26 Aug 2026
Income tax brackets for individuals
South Africa uses a sliding scale of seven brackets, from 18% on the first slice of taxable income to 45% on income above roughly R1.8 million. Each bracket taxes only the income inside it, so a raise never reduces net pay.
The bracket boundaries move only when the Minister of Finance adjusts them. In years where they are left unchanged ("no inflation adjustment"), employees drift into higher brackets — the effect known as bracket creep.
- 18% on the first bracket of taxable income
- 26%, 31%, 36%, 39% and 41% on the middle brackets
- 45% on taxable income above roughly R1.8 million
- Each rate applies only to income within that bracket
- Rates apply to annual taxable income, not monthly pay
Rebates and tax thresholds
Rebates are flat amounts subtracted from the calculated tax. Every taxpayer gets the primary rebate; taxpayers aged 65 and over also get the secondary rebate, and those 75 and over the tertiary rebate.
The tax threshold is simply the income at which the rebate is used up — below it, no PAYE is due. That is why thresholds are higher for older employees.
- Primary rebate — every individual taxpayer
- Secondary rebate — additional, from age 65
- Tertiary rebate — additional, from age 75
- Capture each employee's date of birth so the right rebate applies
- Below the threshold: no PAYE, but the employee still needs an IRP5
Medical scheme fees tax credits
Medical scheme fees tax credits reduce PAYE directly. A fixed monthly credit applies for the main member, the same amount for the first dependant, and a smaller amount for each additional dependant.
The credit is applied in the payroll only where the employer pays or deducts the medical aid contribution. Employees on a private scheme claim it on assessment instead.
How PAYE is calculated from the tables
Take the pay period's remuneration, annualise it, apply the bracket table, subtract the rebates and medical credits, then divide by the number of periods in the year. Annual payments such as a bonus are added to the annualised figure once, not annualised themselves.
Irregular income (commission, overtime, once-off allowances) uses the same approach but must be flagged as non-recurring so the payroll does not annualise a one-off amount and over-deduct.
- Annualise → apply table → less rebates → less medical credits → divide back
- Bonuses and once-off payments are added, not annualised
- Retirement fund contributions are deductible up to 27.5%, capped at R350,000
- Travel allowance: 80% (or 20%) is included in remuneration for PAYE
- Directors of private companies use deemed remuneration rules
Keeping tables current
The tables change on 1 March each year. Running February's tables into March produces incorrect PAYE, which surfaces as EMP501 variances and employee assessment shortfalls.
Payroll Africa updates the SARS tables, rebates, thresholds, medical credits and UIF ceiling centrally, so every company on the platform is on the correct year without a manual update.
Frequently asked questions
Related guides
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