How an employee's age changes their PAYE

How the secondary and tertiary rebates and the higher tax thresholds reduce PAYE for South African employees aged 65 and over, and 75 and over.

By Achekam · 11 October 2026 · 5 min read · For Running a business businesses in South Africa

A bookkeeper who has worked for the practice for decades turns 65. A retired engineer comes back two days a week as a consultant on the payroll. A family business keeps the founder on a salary well into his late seventies. In each case the employee's PAYE should be lower than a younger colleague's on the same pay, and in each case a payroll that ignores age will take too much.

South Africa's tax system gives older taxpayers extra rebates, which also raise the income level at which tax starts. The employer applies them through PAYE. This article sets out the figures for the 2027 tax year, why the date of birth on the payroll matters, and how Achekam applies the rebates once the year's table has been confirmed.

Three rebates for the 2027 tax year

SARS's employer guide gives the 2027 tax rebates as:

A rebate is subtracted from the tax worked out on taxable income, so it reduces the tax itself rather than the income it is calculated on. The rebates build on one another: an employee aged 65 or more receives the secondary rebate on top of the primary one, and an employee aged 75 or more receives all three. The thresholds below only make sense that way.

These are the figures at the time of writing, for the 2026/2027 tax year, which SARS's guide gives as 1 March 2026 to 28 February 2027. The guide also sets out the brackets the rebates are subtracted from: taxable income up to R245 100 is taxed at 18%, rising through the brackets to R666 339 plus 45% of taxable income above R1 878 600. SARS's Guide for Employers in respect of Employees' Tax (2027) sets out the full tables, the rebates and the thresholds, and it is the document to check the figures against.

Tax thresholds by age

The rebates create a different starting point for tax at each age. SARS's employer guide gives the 2027 tax thresholds as:

• R99 000 for persons under 65;
• R153 250 for persons 65 and older;
• R171 300 for persons 75 and older.

Below the threshold for their age, an employee's tax after rebates is nil. So a part-time employee aged 70, earning an annual amount between the under-65 threshold and the 65-plus threshold, should normally have no PAYE deducted, while a younger colleague on exactly the same pay would.

The same age thresholds appear in SARS's rules on provisional tax. SARS says a natural person with no business income is not a provisional taxpayer if their taxable income will not exceed the tax threshold for their age, or if their income from interest, foreign dividends, rental and remuneration from an unregistered employer will not exceed R30 000. Older employees with investment income sometimes ask about this; the answer depends on their whole income, not only their salary, so point them to their own tax adviser.

Why the date of birth on the payroll record matters

Everything above turns on age. If an employee's date of birth is missing from the payroll, or mistyped by a decade, the payroll will apply the wrong rebates, and the error repeats every pay period until someone notices.

The risk runs mostly one way. An older employee whose age is not recorded is taxed as if they were under 65, so PAYE is over-deducted. They may be able to recover the excess through their own tax return, but in the meantime they are short every month, and they will reasonably ask why their payslip changed nothing when they turned 65.

A quick check for any payroll:

1. List every employee with their date of birth, and look for blanks.
2. Compare dates of birth with an ID document for anyone close to 65 or older.
3. Note which employees reach 65 or 75 during the current tax year.
4. Check how SARS's guide treats an employee who reaches one of those ages part-way through the year.
5. After the next run, confirm that older employees' PAYE has moved as expected.

Applying the rebates in Achekam

Achekam's South African calculation applies the tax brackets, age rebates, medical tax credits and the retirement-contribution deduction limit, caps UIF at the ceiling and applies the SDL exemption, all from the confirmed tax table. Age rebates are therefore applied as part of the ordinary run, provided the table is right and the employee's details are complete.

The table needs attention this year. Only the 2025/26 South African tax table ships with Achekam, and it ships unconfirmed. For South African payroll paid on or after 1 March 2026, a business must start its own 2027 tax table, which it can begin from the 2026 figures, update it to SARS's figures, and confirm it before running payroll. No 2026/27 South African table ships with Achekam.

Check the 2027 figures before you confirm

When you build the 2027 table, the rebates and thresholds are among the figures that changed. Before confirming, compare each one with SARS's guide:

• the primary, secondary and tertiary rebates;
• the thresholds for under 65, 65 and older, and 75 and older;
• the brackets and rates.

Confirming the table is a statement by a named person that the figures match SARS's. The wider routine for that check, field by field, is covered in confirming the 2026-27 tax table. Employees with medical scheme membership or retirement fund contributions have further credits and deductions that interact with age; those are explained in medical credits and retirement contributions.

One check, once a year

At the start of each tax year, confirm the table against SARS's guide and run your eye down the dates of birth. For the employees who have reached 65 or 75, that one check is the difference between a payslip that reflects the law and one that quietly over-deducts every month.

General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.