SARS Tax Bracket and Tax Tables for 2024 in South Africa
The Income Tax brackets 2024 in South Africa will continue to be based on a progressive system.
The tax rates for individuals, companies, and small businesses are unchanged for the current year compared to last year.
Understanding the SARS tax brackets and rates is important for tax planning and following South African tax laws effectively.
Different tax rates exist for individuals, companies, small business corporations, and trusts. You need to consider the tax rates based on how you are running your business.
- Sole Proprietors are taxed according to the individual tax brackets
- Companies and Close Corporations are taxed according to the company tax brackets
- Small Business Corporations are taxed according to the Small Business Corporations' tax brackets
Let’s have a look at the SARS Tax Brackets and Tax Tables for 2024 - 2025
Personal Income Tax Rates
For Income tax in South Africa, you are required to pay income tax if you earn more than:
- R95 750 and you are younger than 65 years.
- If you are 65 or older but younger than 75 years old, the tax threshold (i.e. the amount above which income tax becomes payable) is R148 217.
- For taxpayers aged 75 years and older, this threshold is R165 689.
2024 Tax Year - Tax Table For Individuals
Taxable income (R) - Rates of tax (R)
1 – 237 100 - 18% of taxable income
237 101 – 370 500 - 42 678 + 26% of taxable income above 237 100
370 501 – 512 800 - 77 362 + 31% of taxable income above 370 500
512 801 – 673 000 - 121 475 + 36% of taxable income above 512 800
673 001 – 857 900 - 121 475 + 36% of taxable income above 512 800
857 901 – 1 817 000 - 251 258 + 41% of taxable income above 857 900
1 817 001 and above - 644 489 + 45% of taxable income above 1 817 000
Individual Income Tax Rebates for 2024 will be:
Under 65 years old = R17 235
Over 65 years and older = R9 444
Over 75 years and older = R3 145
Close Corporations and Company Tax Rates in South Africa
In South Africa, people view a private company as a legal entity. These include for-profit corporations as well as non-profit entities like clubs, religious institutions, and various philanthropic organizations.
In South Africa, for-profit corporations are the most prevalent type of business entity. Their owners primarily operate them, and they are the simplest to establish.
Close corporations, which were once similar to companies and previously used, can no longer register.
For the year ending on or after 28th February 2025. Here is the tax rate for close corporations:
Company Tax rate for year ends after 31 March 2023 will be 27%
SARS Small Business Corporations Tax Table 2024/2025
A small business corporation is taxed differently and there are major tax benefits for qualifying small businesses. Small Business Corporation (SBC) must meet strict rules to qualify as an entity.
Here are the requirements to qualify as a Small Business Corporation and for the SBC Tax Rate:
- Must be a corporate entity (Close Corporation, Private Company or Personal Liability Company).
- All shareholders of the entity must all be natural persons.
- The entity may not have a turnover of more than R 20 million.
- Shareholders may not hold shares in other companies.
- Entity may not be a personal service provider.
For the year of assessment 1st April 2024 to 31st March 2025:
Taxable Income (R) - Rate of Tax (R)
1 – 95 750 - 0% of taxable income
95 751 – 365 000 - 7% of taxable income above 95 750
365 001 – 550 000 - 18 848 + 21% of taxable income above 365 000
550 001 and above - 57 698 + 27% of the amount above 550 000
What is the Income tax rate of a Trust for 2024?
Trust Tax rates remain unchanged at 45%
What is the tax threshold for 2024 in South Africa?
In South Africa, you are required to pay income tax if you earn more than: R95 750 and you are younger than 65 years. If you are 65 or older but younger than 75 years old, the tax threshold (i.e. the amount above which income tax becomes payable) is R148 217.
Medical Tax Credits
The medical scheme fees tax credit is a rebate that reduces the amount of income tax you owe. It's based on the monthly contributions you make to your medical scheme.
These contributions are subtracted from your taxable income, so you end up paying less tax. It's a way to help you afford medical expenses and encourage people to join medical schemes.
Per Month (R) - 2024-2025
For the taxpayer who paid the medical scheme contributions - R364
For the first dependant - R364
For each additional dependant(s) - R246
Medical Aid Tax Credits
The medical scheme fees tax credit is a rebate that reduces the amount of income tax you owe. It's based on the monthly contributions you make to your medical scheme.
You subtract these contributions from your taxable income, so you end up paying less tax. A way to help you afford medical expenses and encourage people to join medical schemes.
Per Month (R) - 2024-2025
For the taxpayer who paid the medical scheme contributions - R364
For the first dependant - R364
For each additional dependant(s) - R246
Pension, Provident and Retirement Annuity Fund Contributions
Retirement fund lump sum benefits consists of:
- Lump sums from a pension
- Pension preservation
- Provident preservation
- Retirement annuity fund on death, retirement, or termination of employment due to attaining the age of 55 years, sickness, accident, injury, incapacity, redundancy, or termination of the employer’s trade.
Dividends Tax
The dividends tax is a 20% final tax on dividends paid by companies. This tax applies to shares listed on the Johannesburg Stock Exchange (JSE) or other licensed exchanges in South Africa. It doesn't matter if the companies are based in South Africa or not.
Dividends are not taxed if the recipient is a South African company, retirement fund, or other exempt individuals. In certain situations, beneficial owners of dividends who are not residents may enjoy lower tax rates.
Retirement Fund Contributions
Money put into pension, provident, or retirement funds in a year can be subtracted from taxes by members of those funds.
The deduction is limited to 27.5% of the higher amount between remuneration for PAYE purposes or taxable income. This excludes retirement fund lump sums and severance benefits.
Medical and Disability Expenses
Each month, individuals can receive a tax rebate for their contributions to medical schemes. The rebate is up to R364 for the first two people covered and R246 for each additional dependent.
Travel Allowances
If you have to travel often for work and your employer pays a travel allowance, you can get some cash back from SARS. Make sure you keep a detailed logbook of your trips and the costs involved otherwise SARS will reject your claim. There is at least some compensation for the challenging periods spent traveling.
Deductible Business Expenses (Self-employed)
Independent contractors, freelancers and sole proprietors, take note of the self-employed expenses eligible for tax deductions. SARS allows you to deduct all expenses related to your income, such as stationery, telephone, and employee costs.
Keeping all invoices and records of expenses is important for preparing for tax time. Ensure you are thorough to stay organized.
Other Deductions for Self-employed People
Apart from the aforementioned deductions, a person can only claim deductions against their salary or allowances in certain specific scenarios, such as salary-related bad debt.
Transfer Duty
Transfer duty is payable at the following rates on transactions which are not subject to VAT:
Acquisition of property by all persons:
Value of property (R) - Rate
1 – 1 100 000 - 0%
1 100 001 – 1 512 500 - 3% of the value above R1 100 000
1 512 501 – 2 117 500 - R12 375 + 6% of the value above R 1 512 500
2 117 501 – 2 722 500 - R48 675 + 8% of the value above R 2 117 500
2 722 501 – 12 100 000 - R97 075 +11% of the value above R2 722 500
12 100 001 and above - R1 128 600 + 13% of the value exceeding R12 100 000
Turnover Tax
A turnover tax is similar to VAT, with the difference that it taxes intermediate and possibly capital goods. It is an indirect tax, typically on an ad valorem basis, applicable to a production process or stage.
Taxable turnover (R) - Taxable turnover (R)
1 – 335 000 - 0% of taxable turnover
335 001 – 500 000 - 1% of taxable turnover above 335 000
500 001 – 750 000 - 1 650 + 2% of taxable turnover above 500 000
750 001 and above - 6 650 + 3% of taxable turnover above 750 000
What is the Capital Gains Tax rate in South Africa for 2024
The inclusion rate (only 40% of the capital gain will be taxed if you're an individual, and 80% if it's a company or trust selling the property).
The capital gains tax rate:
As of February 2024, the marginal tax rate is 18% for individuals, 21.6% for businesses, and 36% for other trusts.
Frequently asked questions
What is a tax bracket?
In South Africa, tax brackets decide how much of your income you must pay in taxes. The rate changes depending on your filing status. The parliament determines such rates annually and they rise with income.
An individual uses examples of incomes received to determine taxable income.
- Remuneration (income from employment), such as salaries, wages, bonuses, overtime pay, taxable fringe benefits, allowances and certain lump sum benefits
- Profits or losses from a business or trade
- Income or profits arising from an individual being a beneficiary of a trust
- Director’s fees
- Investment income, such as interest and foreign dividends
- Rental profit or losses
- Income from royalties
- Annuities
- Pension income
- Certain capital gains
Why are tax brackets important for businesses in South Africa?
Understanding tax brackets is important for individuals and businesses. It helps them know how much tax they owe and when they need to file their tax returns.
To run your business smoothly and avoid legal issues, make sure to follow all government rules and regulations completely.
This information is useful when you have to make financial decisions, like selling a property in Cape Town, donating, or investing.
What is a Sole Proprietor?
A sole proprietorship, also referred to as a sole trader, individual entrepreneur, or proprietorship, is a business structure where the business and the owner are legally indistinguishable, and it's owned and operated by a single individual.
A sole proprietor isn't always a 'one-man show' — they can hire additional staff. In this scenario, the sole proprietor would earn all the profits, which constitutes their income. The sole proprietor holds ownership of all assets and liabilities.
The sole trader may use a trading name for their business. As a single proprietor, your taxes are determined using the personal tax rates chart above, which are progressive scales dependent on your taxable earnings.
What is Provisional Tax?
A provisional taxpayer is any person who earns income by way of remuneration from an unregistered employer or income that is not remuneration, or an allowance or advance payable by the person’s principal.
An individual is not required to pay provisional tax if he or she does not carry on any business, and the individual's taxable income:
- Will not exceed the tax threshold for the tax year; or
- From interest, dividends, foreign dividends, rental from the letting of fixed property, and remuneration from an unregistered employer will be R30 000 or less for the tax year.
What is withholding taxes (WHTs)?
The following WHTs apply to South-African sourced income payable to a foreign resident. The statutory rates may be reduced by double tax treaties (DTTs).
- WHT on royalties: 15% of the gross amount of royalties.
- WHT on foreign sportspersons and entertainers: 15% of the consideration for the person's activities in South Africa.
- WHT on dividends: 20% of the gross amount of dividend.
- WHT on interest: 15% of the gross amount of interest.
- WHT on the sale of South African immovable property: 7.5% of the consideration where the property is sold by a non-resident individual. This is not a final tax but an advance on the final tax liability and may be reduced upon a ruling from the South African tax authority.
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