Provisional Tax

What is provisional tax?

Provisional tax is a way for individuals and companies in South Africa to pay their income tax in advance, instead of in one lump sum at the end of the tax year. It helps SARS (the South African Revenue Service) collect tax more evenly throughout the year and helps taxpayers avoid large year-end tax bills.

Provisional tax is not a separate tax – it’s simply a system of paying your normal income tax in two or more instalments based on estimated income.

Who must pay provisional tax?

You must pay provisional tax if you earn income that is not subject to PAYE (Pay As You Earn). This includes:

  • Self-employed individuals
  • Freelancers and consultants
  • Company directors receiving dividends or variable income
  • Companies and trusts

If you earn income only from a salary where PAYE is already deducted, you likely don’t need to register as a provisional taxpayer. SARS automatically notifies most businesses and individuals if they fall into the provisional category.

When are provisional tax payments due?

There are normally two compulsory provisional tax payments each year:

  • First payment: 6 months into the tax year (end of August for individuals)
  • Second payment: End of the tax year (end of February for individuals)

There’s also an optional third payment six months after year-end to settle any remaining balance (end of September for individuals).

Companies follow a similar schedule based on their specific financial year-end dates. Missing deadlines can result in penalties and interest, so it’s important to plan ahead or get professional help with your tax filings.

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