A bonus uses the normal income-tax table

A cash employment bonus forms part of remuneration and taxable income. It is not subject to a separate statutory flat “bonus tax” rate. The final tax effect depends on total annual taxable income, progressive brackets, rebates, credits and other assessment items.

The calculator runs the 2026/27 normal-tax table once on income before the bonus and again after adding the bonus. The difference is the estimated incremental annual tax. This respects marginal bands: only the part crossing a threshold is charged at the next rate.

2026/27 brackets and rebates

The tax year runs from 1 March 2026 to 28 February 2027. Individual marginal rates range from 18% to 45% at the published thresholds. The model applies the primary rebate of R17 820 and adds the secondary and tertiary rebates for the selected age band.

Rebates and annual medical scheme fees tax credits are applied to both before and after liabilities. They often cancel in the incremental comparison, but they matter when base tax is near zero. Part-year medical membership and additional medical expenses are not modelled.

Worked R50 000 bonus example

At R480 000 taxable income, a R50 000 bonus takes combined income to R530 000, just below the next bracket threshold of R530 200. The whole bonus remains in the 31% marginal band in this scenario, so estimated incremental annual tax is R15 500 and the after-tax bonus is R34 500.

If the bonus were larger, the slice above R530 200 would be charged at 36%. The effective rate on the whole bonus would be a blend of 31% and 36%, not automatically either single rate. The displayed percentage shows that blended incremental result.

PAYE withholding versus final liability

PAYE on a payslip is withholding toward annual normal tax. Employers use SARS deduction tables and year-to-date payroll information for annual and irregular remuneration. The withheld amount can differ from the calculator’s final incremental estimate without either number being a separate bonus tax.

The variance output subtracts estimated tax from entered withholding. A positive amount means more was withheld from the bonus than this simplified annual comparison; a negative amount means less. It is not a promised refund or bill because the complete assessment includes all income, deductions and credits.

Entering taxable income before the bonus

Use a full-year estimate after established deductions and before the cash bonus. Include taxable salary and other taxable amounts that belong in the base scenario. Do not enter take-home pay. If retirement-fund deductions, travel allowances or fringe benefits are material, calculate the base with a fuller tax model first.

For multiple employers, combine the relevant taxable income. Each employer may withhold as if its payroll were the only source, creating an assessment shortfall. Commission, overtime and a second bonus can also move the final bracket.

Bonus type and timing

The page models an ordinary cash employment bonus. Severance benefits, retirement lump sums, employee share schemes, restraint payments, leave pay and non-cash fringe benefits can have different valuation, timing or tax treatment. Confirm how the employer has classified the payment.

The tax year of receipt or accrual and the payroll period matter. A February and March payment can fall into different years of assessment with different income totals and potentially different rates. Save the payment date and tax year with the estimate.

Salary sacrifice and retirement contributions

An employer or employee retirement contribution may reduce taxable income only within the retirement-fund deduction rules and caps. A bonus sacrificed or contributed under a valid arrangement is not automatically tax-free, and the payroll and fund documentation must reflect what occurred.

This calculator does not add a retirement field because the base taxable-income input should already include the chosen deduction scenario. Use the income-tax calculator to test the 27.5% and R430 000 planning caps, then carry the resulting taxable income here.

Planning the cash amount

Do not commit the gross bonus to spending. Start from the payslip net amount and retain a reserve when other annual income may raise the assessment. Compare debt reduction, emergency savings and long-term goals without assuming the calculator recommends any use.

Keep the payslip, bonus letter and IRP5. Reconcile gross bonus and PAYE to year-to-date totals. Raise an error with payroll promptly; a website estimate is evidence for a question, not authority to alter payroll records.

Why a percentage quoted by colleagues can mislead

Two employees receiving the same gross bonus can have different incremental tax because their annual taxable income, age rebates and credits differ. One person’s 36% experience is not a payroll rule for everyone. A rounded withholding percentage can also include a slice that crossed a bracket while the remainder stayed below it.

Compare rand liabilities before and after the bonus, not only the deduction divided by the bonus. If payroll included another adjustment on the same payslip, separate it before attributing the full difference to bonus PAYE.

Medical credits in the comparison

The member field applies a full twelve months of 2026/27 medical scheme fees tax credits. When the same credit is already fully used against base tax, it does not change incremental bonus tax. At low income, unused credit capacity can reduce part of the bonus effect. Membership for fewer months needs a period-specific amount.

Additional medical expenses credits are excluded because they require qualifying costs, age or disability status and taxable-income tests. Do not add those costs directly to the medical-member field.

Changing jobs during the year

A new employer may annualise its own remuneration without complete knowledge of earlier pay. A bonus from the first job plus salary from the second can produce a higher combined assessment than either payroll anticipated. Gather all IRP5 and year-to-date records and model the full year.

If an employee wants additional voluntary withholding, follow the employer and SARS process. Do not ask payroll to enter fictitious income or deductions merely to force a desired net bonus.

Zero and very small bonuses

A zero bonus produces zero incremental tax and a zero effective rate. At low taxable income, a small bonus can be partly or fully absorbed by rebates and credits, so the effective percentage can be below 18%. That does not create a universal tax-free bonus threshold; it reflects the complete annual liability in that scenario.