Small business corporation tax rates for 2027
The small business corporation tax bands SARS gives for years ending in the 2027 tax year, how they compare with the company rate, and how to estimate.
By Achekam · · 5 min read · For Running a business businesses in South Africa
An ordinary South African company pays one flat rate on its taxable income. A small business corporation does not. Its income is taxed in bands, starting with a band taxed at nothing at all, so a small company's tax bill can be a good deal lower than a flat rate would suggest.
That also means the tax cannot be estimated by multiplying profit by a single percentage. You have to know the bands for the right year and work through them. This article sets out the bands SARS has published for years of assessment ending in the 2027 tax year, how they moved from the previous year, how they compare with the standard company rate, and how to estimate the figure from your own books.
One thing it does not do is explain who qualifies. SARS sets conditions a company must meet to be treated as a small business corporation; confirm with SARS or your accountant that your company meets them before relying on these bands.
The bands, from 0% to 27%
SARS says that for years of assessment ending between 1 April 2026 and 31 March 2027, small business corporations pay tax on taxable income as follows:
| Taxable income | Tax payable |
|---|---|
| Up to R99 000 | 0% |
| Above R99 000, up to R365 000 | 7% of the amount above R99 000 |
| Above R365 000, up to R550 000 | R18 620 plus 21% of the amount above R365 000 |
| Above R550 000 | R57 470 plus 27% of the amount above R550 000 |
Read each band the same way. The fixed rand amount is the tax already due on all income below the start of the band; the percentage applies only to the part of taxable income that falls inside it. A company with taxable income in the third band pays R18 620 for the first R365 000, plus 21% of whatever lies between R365 000 and its actual taxable income.
The rates here are as SARS published them on 25 February 2026, at the time of writing. SARS sets out the company rate and the small business corporation bands year by year on its page for companies, trusts and small business corporations; check it for the year that matches your own year end.
How the 0% band moved
The band taxed at 0% is wider than it was. According to SARS, it was R95 750 in the previous year and is R99 000 for years ending between 1 April 2026 and 31 March 2027.
The practical lesson is about which year's table you use, not the size of the change. The bands apply by the date your year of assessment ends. A company with a February year end that closed its books on 28 February 2026 falls in the earlier year's table; the same company's year ending in February 2027 uses the bands above. Applying the wrong table to a year end is an easy mistake to make, and an easy one to avoid.
The standard company rate, for comparison
SARS says the income tax rate for companies is 27% for years of assessment ending from 1 April 2026 to 31 March 2027, unchanged from the previous year. It was 28% for years ending 1 April 2022 to 30 March 2023.
Set that beside the bands. A small business corporation reaches the 27% rate only on taxable income above R550 000, and even then only on the slice above that point. Below it, every rand is taxed at a lower rate than an ordinary company would pay. That is the whole value of the regime, and why it is worth checking carefully whether a company qualifies.
Personal service providers
Some companies earn their income from one person's services to a client, in a way that looks more like employment than business. SARS calls these personal service providers, and says they are no longer taxed separately: they are taxed as a company or as a trust.
What SARS's page does not say is that such a company is taxed as a small business corporation. If your company provides one person's services, take advice on which treatment applies before you use the bands above.
Provisional tax comes with the territory
SARS says companies automatically fall into the provisional tax system without a separate registration. A small business corporation is a company, so it makes provisional payments during the year based on its estimate of taxable income, and the bands above are what that estimate is run through.
Comparing a company that uses turnover tax instead is covered in turnover tax for micro businesses.
Estimating the tax from your own income statement
The bands apply to taxable income, which is not the same as accounting profit. But accounting profit is where every estimate starts, and your books can give it to you at any point in the year.
In Achekam, management accounts show an income statement for a chosen period beside the period before, and a balance sheet at period end, both added up from your own journals and exportable as PDF or CSV. The year-to-date preset starts on 1 January rather than your own year start, so a company with a March year should choose its own dates for the period.
The general ledger lists every posted line, and the trial balance shows each account for all time, for a period or at a date, and says whether debits equal credits. Check that it balances before you trust the profit figure.
A simple estimating routine:
- Run the income statement for the year so far, using your own year-start date.
- Add a reasonable view of the remaining months.
- Adjust for items your accountant treats differently for tax.
- Run the result through the bands for the year your year end falls in.
The wider question of planning company tax from your books, for companies that do not use the small business corporation bands, is covered in planning company tax from your books.
Before your next provisional payment
Confirm that your company qualifies, find the table for the year your year of assessment ends, and run your latest income statement through it. Then keep the working with your provisional tax papers, so that next time you are adjusting an estimate rather than starting again.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
