How PAYE works in South Africa (2026/2027)
PAYE — Pay-As-You-Earn — is the income tax your employer deducts from your salary each month and pays to SARS on your behalf. Here's exactly how the number on your payslip is calculated.
Updated By the ZACalc team
The five-step calculation
- Annualise your gross monthly salary (× 12).
- Deduct allowable retirement-fund contributions (capped at 27.5% of remuneration or R 350 000/year).
- Apply the SARS tax tables to the resulting taxable income.
- Subtract age-based rebates (primary, secondary, tertiary).
- Subtract medical-aid tax credits, then divide by 12 to get monthly PAYE.
2026/2027 tax brackets
| Taxable income | Rate |
|---|---|
| R 1 – R 245 100 | 18% |
| R 245 101 – R 383 100 | 26% |
| R 383 101 – R 530 200 | 31% |
| R 530 201 – R 695 800 | 36% |
| R 695 801 – R 887 000 | 39% |
| R 887 001 – R 1 878 600 | 41% |
| R 1 878 601 + | 45% |
Rebates & thresholds
Everyone gets the primary rebate of R 17 820. Add R 9 765 if you're 65–74, and another R 3 249 if you're 75+. Below the threshold, you owe no income tax:
- Under 65 — R 99 000/year
- 65 – 74 — R 153 250/year
- 75+ — R 171 300/year
Medical aid credits
For each of the first two members on a registered medical scheme you get R 364/month; each additional dependant adds R 246. The credits are subtracted directly from your tax — it's a credit, not a deduction.
UIF and retirement
UIF is a separate 1% deduction on remuneration, capped at R 17 712/month (max R 177.12). Retirement contributions are deducted before income tax is calculated, up to the cap.
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