How to calculate PAYE in South Africa (2026/2027 tax tables)

PAYE (Pay-As-You-Earn) is the income tax the South African Revenue Service (SARS) collects from your salary every month, through your employer. The amount depends on what you earn, your age, and a few allowances. This guide shows exactly how the calculation works, with the 2026/2027 tax tables and three worked examples at different salary levels.

If you just want the answer for a specific salary, plug it into the free PAYE and UIF calculator. It uses the same numbers as below and shows your take-home pay in one click.

If you're an employer, Govchain runs your monthly payroll for you: PAYE, UIF, SDL, payslips, EMP201 returns and year-end IRP5s, fully managed.

The 2026/2027 SARS tax brackets

For the tax year that runs from 1 March 2026 to 28 February 2027, SARS taxes annual income on a sliding scale:

R0 to R245,100: 18% of annual income
R245,100 to R383,100: R44,118 plus 26% of the amount above R245,100
R383,100 to R530,200: R79,998 plus 31% of the amount above R383,100
R530,200 to R695,800: R125,599 plus 36% of the amount above R530,200
R695,800 to R887,000: R185,215 plus 39% of the amount above R695,800
R887,000 to R1,878,600: R259,783 plus 41% of the amount above R887,000
R1,878,600 and above: R666,339 plus 45% of the amount above R1,878,600

Each "slice" of your salary is taxed at the rate for that bracket. You don't pay the higher rate on your whole salary, only on the portion that falls in that bracket.

The rebates (everyone gets one)

A rebate is an amount SARS subtracts from your final tax bill, not from your income. There are three:

Primary rebate (everyone under 65): R17,820 a year
Secondary rebate (65 to 74): an extra R9,765, so R27,585 total
Tertiary rebate (75 and over): an extra R3,249, so R30,834 total

The rebate is also why you only start paying PAYE above a certain salary. Under 65, that threshold is R99,000 a year (around R8,250 a month). Earn less and your tax is fully cancelled out by the rebate.

The five-step calculation

For any monthly salary, the method is the same:

Multiply the monthly salary by 12 to get the annual figure
Apply the tax brackets to work out the annual tax
Subtract your age rebate
Subtract any medical scheme tax credits
Divide by 12 to get the monthly PAYE

Three worked examples follow.

Example 1: R20,000 a month (under 65)

Annual income: R20,000 × 12 = R240,000

Tax brackets: R240,000 is entirely in the first bracket (R0 to R245,100), so the whole amount is taxed at 18%.

Tax: R240,000 × 18% = R43,200

Less the primary rebate (R17,820): R43,200 − R17,820 = R25,380 annual PAYE

Monthly PAYE: R25,380 ÷ 12 = R2,115

Example 2: R40,000 a month (under 65)

Annual income: R40,000 × 12 = R480,000

Tax brackets: R480,000 sits in the third bracket (R383,100 to R530,200), so it's taxed in three slices:

First R245,100 at 18% = R44,118
Next R138,000 (R245,100 to R383,100) at 26% = R35,880
Final R96,900 (R383,100 to R480,000) at 31% = R30,039
Total tax: R110,037

Less the primary rebate (R17,820): R110,037 − R17,820 = R92,217 annual PAYE

Monthly PAYE: R92,217 ÷ 12 = R7,685

Example 3: R80,000 a month (under 65)

Annual income: R80,000 × 12 = R960,000

Tax brackets: R960,000 reaches into the sixth bracket (R887,000 to R1,878,600), so it's taxed in six slices:

First R245,100 at 18% = R44,118
Next R138,000 at 26% = R35,880
Next R147,100 at 31% = R45,601
Next R165,600 at 36% = R59,616
Next R191,200 at 39% = R74,568
Final R73,000 (R887,000 to R960,000) at 41% = R29,930
Total tax: R289,713

Less the primary rebate (R17,820): R289,713 − R17,820 = R271,893 annual PAYE

Monthly PAYE: R271,893 ÷ 12 = R22,658

For any other salary, the PAYE calculator does this maths in one click and adds UIF and net pay too.

What changes the answer

The calculation above is the basic case. Three things commonly change it:

Medical scheme tax credits. If you belong to a registered medical scheme, you get a fixed monthly credit. For 2026/2027 it's R376 a month for the main member, R376 for the first dependant, and R254 for each additional dependant. The credit comes off your annual PAYE before the monthly divide.

Retirement annuity contributions. Money you put into a retirement annuity is deductible up to 27.5% of your gross income, capped at R350,000 a year. It comes off your taxable income before the brackets are applied, which can drop you into a lower bracket.

Travel allowance. A travel allowance is treated as 80% taxable by default. If you can show that more than 80% of your driving is for business, only 20% is taxable. The taxable portion is added to your taxable income.

The calculator handles all three. For complex cases (split salary structures, share schemes, lump sums), check with a registered tax practitioner.

UIF on top

UIF (Unemployment Insurance Fund) is a separate deduction, not part of PAYE. It's 1% of your salary, capped on the first R17,712 a month. So even on a R80,000 salary, the UIF deduction is just R177.12.

If you're an employer, you also pay another 1% UIF on top, plus 1% SDL (Skills Development Levy) if your annual payroll is above R500,000.

What lands in the bank

Take-home pay is straightforward once you have the PAYE and UIF figures:

Net pay = Gross salary − PAYE − UIF − any other deductions (pension, medical aid, etc.)

For the R20,000 example: R20,000 − R2,115 − R177.12 = R17,707.88

For the R40,000 example: R40,000 − R7,685 − R177.12 = R32,137.88

For the R80,000 example: R80,000 − R22,658 − R177.12 = R57,164.88

Where the calculation goes wrong

Using last year's tax tables. SARS updates the brackets, rebates and credits every March. Old numbers under-deduct, and SARS reclaims the shortfall.

Forgetting the rebate. A surprising number of DIY spreadsheets compute the bracket tax and stop there, missing the R17,820 primary rebate. The result is over-deducted PAYE.

Applying the top-bracket rate to the whole salary. Brackets are slices, not flat rates. Earning R250,000 a year doesn't mean you pay 26% on all of it; you pay 18% on the first R245,100 and 26% only on the R4,900 above that.

Mixing up the UIF cap. UIF is 1% of salary up to R17,712 a month, not 1% of total salary. On a R30,000 salary the deduction is R177.12, not R300.

Confusing PAYE and provisional tax. PAYE is for salaried employees. Provisional tax is for sole proprietors, freelancers and rental-income earners. Different forms, different deadlines, same end destination at SARS.

FAQ

Are the 2026/2027 PAYE figures up to date? Yes. The brackets, rebates, medical credits and UIF cap above reflect the figures announced by Treasury in the February 2026 budget, which apply from 1 March 2026 to 28 February 2027.

What's the South African tax year? For individuals, it runs from 1 March to the end of February. The 2026/2027 tax year covers 1 March 2026 to 28 February 2027.

Is there an easier way than doing this by hand? Yes. The PAYE and UIF calculator takes a salary, your age, medical aid members, RA contributions and travel allowance and works out the answer instantly.

How is a bonus taxed? A bonus is added to your annual income and taxed at your normal bracket rate. There's no special "bonus tax". A R30,000 bonus on top of a R240,000 salary takes your annual income to R270,000, so part of the bonus is taxed at 18% and part at 26%.

What if I'm self-employed and pay myself a salary? If you draw a regular monthly salary from your own company, your company must register for PAYE and deduct it like any other employer. If you're a sole proprietor, you pay provisional tax instead.

How does this differ from what SARS publishes? Same numbers. SARS publishes the brackets and rebates; this guide just walks through how to apply them with worked examples. The calculator uses the SARS tables directly.

Hand the calculations to us

If you're an employer, you don't need to do any of this by hand each month. Govchain runs your monthly payroll: PAYE calculations using the current SARS tables, UIF and SDL contributions, compliant payslips, EMP201 returns by the 7th, and IRP5 tax certificates at year-end. One subscription, fully managed, in days, not weeks.

Use the PAYE and UIF calculator · Set up PAYE with Govchain · Register for UIF