Tax Directive

What is a tax directive?

A tax directive is an official instruction from SARS (the South African Revenue Service) that tells an employer, fund, or institution how much tax to deduct from a specific payment to an individual. It’s used when the standard PAYE (Pay As You Earn) rate doesn’t apply – for example, for lump sum payments, retirement withdrawals, retrenchment packages, or commission-based income.

The goal of a tax directive is to ensure that tax is deducted correctly for once-off or irregular income, avoiding either overpayment or underpayment.

Who needs a tax directive?

You’ll need a tax directive if you’re receiving a payment that doesn’t follow the usual monthly salary structure. Common examples include:

  • Pension, provident, or retirement annuity withdrawals
  • Retrenchment or severance packages
  • Notice pay or leave pay
  • Commission-based or freelance income (where a consistent PAYE rate isn’t easy to apply)
  • Share scheme payments or once-off bonuses

In most cases, the employer, retirement fund, or administrator applies for the directive on your behalf, but you can also apply yourself via eFiling if needed.

How do I apply for or check a tax directive?

You can apply for a tax directive through your SARS eFiling profile or ask your HR department, payroll provider, or fund administrator to do it for you.

To apply or check your status:

  • Log in to your SARS eFiling account
  • Go to the "Tax Directives" section
  • Submit a new application or check the status of a submitted directive
  • If approved, SARS will issue a directive number and instructions, usually within 2–5 working days

You can also use the SARS tax directive calculator to estimate how much tax may be withheld based on the lump sum amount.

Do I need a tax directive for pension or notice pay?

Yes – SARS requires a tax directive for any lump sum from a pension or retirement fund, as well as for retrenchment and certain severance or notice payments. Without a directive, SARS may instruct your employer to deduct tax at the maximum rate, which could result in you paying more tax than necessary upfront.

Need a tax directive or proof of good standing with SARS?

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