2025 SARS tax pocket guide (Part One)

By BVK Group | 18 Mar 2025

This SARS tax pocket guide provides a summary of the most important information relating to taxes, duties and levies for 2025/26.

INCOME TAX: INDIVIDUALS AND TRUSTS

Tax rates from 1 March 2025 to 28 February 2026:

Individuals and special trusts

Trusts other than special trusts: rate of tax 45%.

Provisional Tax

A provisional taxpayer is any person who earns income that

is not remuneration, an allowance or advance payable by the

person’s principal; or income by way of remuneration from an

unregistered employer. 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. 

   

Deceased estates are not provisional taxpayers.

Retirement Fund Lump Sum Withdrawal Benefits

Retirement fund lump sum withdrawal benefits consist of

lump sums from a pension, pension preservation, provident,

provident preservation or retirement annuity fund on

withdrawal (including assignment in terms of a divorce order).

Tax on a specific retirement fund lump sum withdrawal benefit

(lump sum X) is equal to:

• •The tax determined by the application of the tax table 

  to the aggregate of lump sum X, plus all other retirement 

  fund lump sum withdrawal benefits accruing from March 

  2009, all retirement fund lump sum benefits accruing from 

  October 2007, and all severance benefits accruing from 

  March 2011; less 

   

• •The tax determined by the application of the tax table to 

  the aggregate of all retirement fund lump sum withdrawal 

  benefits accruing before lump sum X from March 2009, all 

  retirement fund lump sum benefits accruing from October 

  2007, and all severance benefits accruing from March 

  2011. 

Retirement Fund Lump Sum Benefits or Severance Benefits

Retirement fund lump sum benefits consist of lump sums

from a pension, pension preservation, provident, provident

preservation or retirement annuity fund on death, retirement,

or termination of employment due to reaching the age of

55, sickness, accident, injury, incapacity, redundancy or

termination of the employer’s trade.

Severance benefits consist of lump sums from or by

arrangement with an employer due to relinquishment,

termination, loss, repudiation, cancellation or variation of a

person’s office or employment.

Tax on a specific retirement fund lump sum benefit or a

severance benefit (lump sum or severance benefit Y) is equal to:

• •The tax determined by the application of the tax table to the 

  aggregate of amount Y, plus all other retirement fund lump 

  sum benefits accruing from October 2007, all retirement 

  fund lump sum withdrawal benefits accruing from March 

  2009, and all other severance benefits accruing from March 

  2011; less 

   

• •The tax determined by the application of the tax table to the 

  aggregate of all retirement fund lump sum benefits accruing 

  before lump sum Y from October 2007, all retirement fund 

Other Deductions

Other than the deductions set out above, an individual may only

claim deductions against employment income or allowances in

limited specified situations, e.g., bad debt in respect of salary.

Fringe Benefits

Employer-owned vehicles

• •The taxable value is 3.5% of the determined value (the cash 

  cost, including Value-added Tax) of each vehicle per month. 

  Where the vehicle is: 

    » The subject of a maintenance plan when the employer 

  • acquired it, the taxable value is 3,25% of the determined

    value; or

    » Acquired by the employer under an operating lease, the 

  • taxable value is the cost incurred by the employer under

    the operating lease plus the cost of fuel.

   

• •Eighty per cent of the fringe benefit must be included in the 

  employee’s remuneration for the purposes of calculating 

  PAYE. The percentage is reduced to 20% if the employer is 

  satisfied that at least 80% of the use of the motor vehicle 

  for the tax year will be for business purposes. 

   

• •On assessment, the fringe benefit for the tax year is reduced 

  by the ratio of the distance travelled for business purposes, 

  substantiated by a logbook, divided by the actual distance 

  travelled during the tax year. 

   

• •On assessment, there is further relief for the cost of the 

  licence, insurance, maintenance and fuel for private travel, 

  if the full cost thereof has been borne by the employee and if 

  the distance travelled for private purposes is substantiated 

  by a logbook. 

Interest-free or low-interest loans

The difference between interest charged at the official rate

and the actual amount of interest charged is to be included in

gross income.

Residential accommodation

• •The value of the fringe benefit to be included in gross 

  income is the lower of the benefit calculated by applying 

  a prescribed formula, or the cost to the employer 

  if the employer does not have full ownership of the 

  accommodation. 

   

• •The formula will apply if the accommodation is owned by the 

  employee, but it does not apply to holiday accommodation 

  hired by the employer from non-associated institutions. 

INCOME TAX: COMPANIES