Provisional tax is how SARS collects tax during the year from people and companies who earn income that is not taxed through a payroll. You pay twice a year based on an estimate, so the estimate is what matters.
Who has to pay it
Every company is a provisional taxpayer. So is any person who earns income other than a salary, such as business, freelance or rental income.
You do not have to pay provisional tax if you do not run a business and your taxable income for the year will be under the tax threshold (R99 000 if you are under 65), or if your interest, dividends, rental and similar income for the year will be R30 000 or less.
The 2026/27 dates for individuals
- First payment: 31 August 2026, for the first six months of the tax year
- Second payment: 26 February 2027, because 28 February falls on a Sunday
- Voluntary third payment: 30 September 2027, to top up and cut interest
Before each payment, gather
Getting the second estimate right
SARS charges an underestimation penalty on the second payment if your estimate is too low. If your taxable income is R1 million or less, the estimate must be at least 90% of your actual taxable income, or at least the basic amount (generally your last assessed taxable income). Above R1 million, it must be at least 80% of the actual figure.
The penalty is 20% of the difference between the tax on the required amount and the tax on your estimate, plus interest on what you paid late. A careful estimate and, where needed, a voluntary third payment avoid most of it.
When to ask for help
If your income jumps or drops a lot, you sold a property or shares, or SARS has already charged you a penalty, it is worth having an accountant prepare the estimate with you.
General information, correct as at the date above. It is not tax advice for your situation. Plumbline is a fictional firm on a CodeLab One concept website.