Tax year and rate table used

This calculator uses the individual income-tax rates for the year of assessment from 1 March 2026 to 28 February 2027. Taxable income up to R245 100 is taxed at 18%. Higher brackets apply a fixed amount accumulated from lower bands plus the marginal rate on income above the band threshold. The top marginal rate remains 45% above R1 878 600.

A marginal bracket does not tax every rand at the highest rate reached. If taxable income enters the 31% band, only the portion above R383 100 is charged at 31%; the lower portions retain their lower-band calculation. The output is annual tax after the selected rebates and basic medical scheme fees tax credits, then divided by 12 for a level monthly estimate.

From remuneration to taxable income

The gross input is annual remuneration before the retirement contribution entered here. The page subtracts the lesser of the entered contribution, 27.5% of gross remuneration and R430 000. The 2026 Budget increased the annual monetary cap to R430 000 for 2026/27. In an actual return, the deduction basis is the greater of remuneration or taxable income before the deduction, and carry-forwards and employer contributions can affect the result.

This simplified employment model does not add allowances, fringe benefits, investment income, rental profit or capital gains. It does not deduct business expenses, assessed losses, donations or prior excess retirement contributions. If gross pay is not the complete tax base, use the output only as a payroll planning scenario.

Primary, secondary and tertiary rebates

Every qualifying individual receives the primary rebate of R17 820. A person aged 65 to 74 at the end of the tax year can also receive the secondary rebate of R9 765. A person aged 75 or older can additionally receive the tertiary rebate of R3 249. The selector adds these amounts in sequence.

A rebate reduces calculated tax; it is not subtracted from taxable income and cannot create a negative normal-tax refund by itself. Age at the end of the year of assessment controls the age-based rebate. If the taxpayer dies or has an unusual assessment period, obtain case-specific guidance rather than relying on a level twelve-month model.

Medical scheme fees tax credits

For 2026/27, the monthly medical scheme fees tax credit is R376 for the taxpayer, R376 for the first dependant and R254 for each additional dependant. The calculator multiplies the relevant monthly amount by 12 and subtracts it after rebates. Enter the number of members for whom the taxpayer can claim the credit under the tax rules, not merely everyone in a household.

Additional medical expenses tax credits use age, disability status, qualifying out-of-pocket costs, contributions and taxable income in more complex formulas. They are not included. Payroll may also allocate credits according to months of membership, so a full-year entry overstates the credit when cover starts late or ends early.

PAYE is withholding, not a separate tax

PAYE is the employer’s withholding mechanism for employees’ tax. Annual normal tax depends on the complete year’s taxable income and credits. Payroll annualises regular remuneration and uses SARS deduction tables, while bonuses, commissions, back pay and changes between employers can create differences from an annual amount divided evenly by twelve.

A final SARS assessment reconciles information from employers and the taxpayer’s return. A PAYE refund does not mean the income was untaxed; it can mean withholding exceeded assessed liability. An amount due can arise when combined income or insufficient withholding pushes the assessment higher.

Employee UIF in the cash result

The monthly cash line subtracts employee UIF at 1% of remuneration up to the current monthly remuneration ceiling of R17 712, giving a maximum employee contribution of R177.12 per month. UIF is shown as a payroll deduction but is not deducted in calculating taxable income in this model. The employer’s separate 1% contribution does not reduce the employee’s cash pay.

The net line excludes pension cash deductions beyond their tax effect, medical scheme premiums, skills development, garnishees, loans and other payroll items. It is therefore not a payslip forecast. Use the dedicated UIF calculator to inspect employee and employer contributions over a selected number of months.

Worked annual example

At gross remuneration of R480 000 with no retirement deduction, taxable income remains R480 000. Tax before rebates is R79 998 plus 31% of R96 900, or R110 037. Subtracting the under-65 primary rebate of R17 820 and one member’s annual medical credit of R4 512 gives R87 705.

Dividing by twelve gives R7 308.75 monthly PAYE in the level-pay scenario. Monthly gross is R40 000 and employee UIF is capped at R177.12, leaving about R32 514.13 before all other deductions. Checking each layer makes the result easier to reconcile with a payroll system.

Cases that need a fuller calculation

Directors, independent contractors, multiple employers, provisional taxpayers and people with foreign or investment income can need additional rules. Travel allowances, company vehicles, employer-provided housing and share incentives may be taxable benefits. Severance and retirement lump sums use separate tables, while two-pot savings withdrawals are included in taxable income but normally require a SARS directive for withholding.

Use current SARS guidance and a registered tax practitioner where the facts are material or uncertain. Save the tax year and assumptions with any estimate because rates and monetary thresholds can change in a later budget.

Monthly versus annual inputs

Convert a stable monthly salary to an annual amount by multiplying by twelve, then add taxable annual bonuses or other remuneration only when they belong in the scenario. Do not enter one month in an annual field. If employment covers part of the tax year, a simple twelve-month annualisation can misstate rebates, credits and payroll timing. Use actual year-to-date records or the employer’s calculation for a part-year estimate.