Should I be registered for and paying provisional tax?

Failing to work out whether you are a provisional taxpayer or not, could prove costly as the South African Revenue Service can penalise you for not paying tax in time.

Provisional tax is a system that ensures you pay tax during the tax year if you have sources of income that are not taxed by an employer, your pension provider or your investment company. Read more: What is provisional tax?

You should check if you are a provisional taxpayer if:

You earn income as a freelancer or independent contractor;

You are running a business in your own name;

You rent out property; or

You are earning interest or dividends from investments.

You should also register for provisional tax if the South African Revenue Service notifies you that you are a provisional taxpayer.

No need to register

You do not have to register for provisional tax if:

• Your taxable income is below the income threshold
  • R95 750 if you were under the age of 65 in the March 2023 to February 2024 tax year;
  • R148 217 if you were 65 or older but not over the age of 75 in the March 2023 to February 2024 tax year;
  • R165 689 if you were 75 years or older in the March 2023 to February 2024 tax year. See our Tax tables
    
    
• Your taxable income from any of these sources in any tax year does not exceed R30 000:
  • Income paid to you as a freelancer or independent contractor from which Pay As You Earn (PAYE) tax is not deducted;
  • Rental income;
  • Dividends or foreign dividends paid to you on an investment that is not a tax-free investment or in a retirement fund;
  • Interest paid to you that is not in a tax-free investment or a retirement fund, after you have deducted the annual interest exemptions of:
    • R23 800 if you are under the age of 65; or
    • R34 500 if you are 65 years or older.
      
      
• Your deceased estate is also not liable for provisional tax.
  
  

Taxable income

Remember that your taxable income is income on which you owe tax. To calculate it, you can deduct:

• Any retirement fund contributions that are within the annual limits;
• Any income on which you do not pay tax – the income threshold, for example.