Who has to pay provisional tax in South Africa
Who SARS treats as a provisional taxpayer, why every company is one, which individuals are left out, and why deciding is the taxpayer's own job.
By Achekam · · 4 min read · For Running a business businesses in South Africa
A salaried employee never thinks about provisional tax. Their employer deducts PAYE every month, and by the end of the year most of their tax has already reached SARS. The moment someone earns money that does not come through a payslip, that changes: a consultant's fees, a landlord's rent, a sole trader's takings, a company's profits.
Provisional tax is how SARS collects income tax on that kind of income during the year rather than all at the end. The first question is not when to pay or how much, but whether you are in the system at all. This article explains who SARS treats as a provisional taxpayer, why every company is one, which individuals are left out, and why the decision rests with you.
Income other than remuneration
SARS's starting rule is broad. It says any person who receives income other than remuneration is a provisional taxpayer.
"Remuneration" is broadly what an employer pays an employee, the income PAYE is deducted from. Everything else, such as business profits, fees for services, rental income or interest, is "income other than remuneration". Receiving any of it puts a person into the provisional tax system, unless one of the exclusions below applies.
That catches people who do not think of themselves as running a business:
- an employee who also earns fees from occasional consulting;
- someone who lets out a flat;
- a retired person living on interest and rent;
- a sole proprietor of any size.
Companies fall in automatically
For companies, SARS leaves no room for doubt. It says companies automatically fall into the provisional tax system, without a separate registration.
So a company that registers for income tax is a provisional taxpayer from the start, whether it is profitable or not, large or small. There is no form to opt in and no threshold to cross. The practical consequence is that every company needs a provisional tax calendar from its first year. When the payments fall due is set out in provisional tax payment dates and the top-up.
Individuals who are left out
For individuals, SARS carves out two groups. It says a natural person with no business income is not a provisional taxpayer if either:
- their taxable income will not exceed the tax threshold, which for the 2027 tax year is R99 000 for someone under 65; or
- their income from interest, foreign dividends, rental and remuneration from an unregistered employer will not exceed R30 000.
The tax threshold is higher for older taxpayers: SARS gives R153 250 for those aged 65 to 74 and R171 300 for those aged 75 and over, for the 2027 tax year.
The words "no business income" matter most for readers of this article. Both exclusions are only for individuals without business income. A sole proprietor running a business, however small, does not fall within either, and so stays a provisional taxpayer under the general rule.
| Who | Provisional taxpayer? |
|---|---|
| A company | Yes, automatically |
| A sole proprietor with business income | Yes, under the general rule |
| An individual with no business income, below the tax threshold | No |
| An individual with no business income, whose interest, foreign dividends, rental and unregistered-employer pay stays within R30 000 | No |
| An employee with only remuneration from a registered employer | Not on that income alone |
These are the figures SARS published for the 2027 tax year, at the time of writing. SARS's provisional tax page explains who is a provisional taxpayer, the exclusions and how the payments and returns work.
The onus is yours
The most important sentence on SARS's page may be this one. SARS says the onus is on the taxpayer to determine whether it is liable for provisional tax, and to request and submit the IRP6 return through eFiling.
SARS will not necessarily tell you that you have become a provisional taxpayer. A person who starts earning rental income, or an employee who takes on a side business, has to recognise the change and act on it.
And the system has teeth once you are in it. SARS says a provisional taxpayer who does not submit the final provisional tax return within four months after the end of the year of assessment is deemed to have estimated nil taxable income. Missing the final return does not make the obligation go away; it replaces your estimate with nothing at all.
Estimating taxable income from your management accounts
Each IRP6 needs an estimate of the year's taxable income. For a business, the most defensible estimate starts with its own books.
In Achekam, 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. A balanced trial balance is the first check that the figures are complete.
Management accounts then 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. Use the income statement for the year so far as the starting point, and adjust it with your accountant for items treated differently for tax. One setting to watch: the year-to-date preset starts on 1 January, not on your own year start, so choose your own dates if your year begins in March or another month.
For a company, the rate applied to that estimate is covered in planning company tax from your books.
Checking where you stand
If you are a company, you are in. If you are an individual with any business income, you are in. If you are an individual without business income, compare your taxable income with the threshold for your age, and your interest, foreign dividends, rental and unregistered-employer pay with R30 000. If you are in, request your IRP6 on eFiling and set up the calendar before the first payment falls due.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
