PAYE is tax collected as you earn
Your employer withholds employees’ tax from your remuneration and pays it to SARS. PAYE is a collection method for income tax. Your annual assessment brings together the income, deductions and tax already paid for the year.
If you have several income sources, the tax withheld by one employer might not cover your total liability. A single-salary estimate is only a starting point.
A higher bracket does not tax all your income at that rate
South Africa uses progressive personal income tax brackets. Each higher rate applies to the portion above that bracket’s starting point. The published table combines the tax on lower portions into a base amount.
For 2026/27, a taxable annual income of R360 000 falls in the 26% band. The calculation is R44 118 plus 26% of the portion over R245 100. Subtracting the R17 820 primary rebate leaves R56 172 before any medical credits.
What to check on your payslip
Check your taxable remuneration rather than assuming your cost-to-company package is cash salary. Look for retirement contributions, medical scheme deductions and fringe benefits separately.
Use the correct tax year. A South African individual tax year runs from March to February. Ask payroll about unexplained differences and keep your IRP5 and supporting certificates for your return.
Sources & further reading
Educational information, not personalised financial advice. This guide was prepared for this release. Read our editorial and corrections policy.