Here’s How Much Personal Income Tax You’ll Pay After the Budget

Finance Minister Enoch Godongwana has announced tax relief for South Africans for the first time in two years by adjusting personal income tax brackets for inflation.

This change ends two years of “bracket creep”, where tax brackets are not adjusted for inflation. Bracket creep causes people to pay more tax over time, even if their real income hasn’t increased.

Why This Matters

South Africa last adjusted tax brackets in the 2023/24 financial year. Since then, government relied on bracket creep to boost tax revenue without increasing tax rates.

While this helped raise revenue, slower wage growth in the private sector means personal income tax collections are now expected to come in below earlier projections.

Despite this, South Africa’s tax-to-GDP ratio rose from 25.1% to 25.9%, even though only a small group of taxpayers carry most of the burden.

• The top 13% of taxpayers pay over 60% of all personal income tax

• Nearly half of all personal income tax comes from the 7.7% earning more than R1 million a year

What Changed in the 2026 Budget

To ease pressure on households, government adjusted:

• Personal income tax brackets

• Medical aid tax credits

Both were increased in line with inflation of 3.4%.

Medical Aid Tax Credits

• First two members: R364 → R376

• Additional members: R246 → R254

Income Tax Thresholds

• People earning below R99,000 a year pay no income tax

• Earnings between R99,000 and R150,000 fall into the lowest tax bracket

• The highest tax bracket applies to those earning over R1.5 million a year

Big Picture

Government expects to collect R844.8 billion in personal income tax in the 2026/27 financial year.

The adjusted tax brackets mean:

• Less pressure from inflation

• Slightly more take-home pay

• Relief after two years of rising effective tax rates

Do you need a Quote for our Tax and Accounting Services?

Contact our team via any of the following channels to get a proposal for your accounting and tax services:

• Complete Individual proposal request form
• Complete Company, Micro Business or Small Business proposal request form
• Complete Trust proposal request form
• Book a video or telephone call
• Complete this contact form for a call back

Subscribe to our newsletters.

Purchase Contract TEMPLATES and BUSINESS STATIONERY at www.ZEELIEONLINE.com

Disclaimer:

The views or opinions expressed on this site are solely those of the original authors and other contributors.

The material and information contained on this website is for general information purposes only.

This information is for general purposes only. Don't use this information for making business, legal and tax decisions without consulting a professional.

We do not make any express or implied representation, as to the completeness or accuracy of the information published.

Tax law regularly changes, so any tax information on this site could become outdated.

We are not responsible for any other websites that you may access through links on our website.

ZPA accepts no liability for any loss or damage arising from the use of any material on this site.