What is the tax threshold?

The tax threshold is the amount of income you can earn in any tax year without paying tax.

South Africa currently has three different thresholds that apply depending on your age.

For the tax year starting March 2026, the threshold is R99 000 for the year if you are under 65. That amounts to a monthly earning of around R8 250.

If you are between 65 and 75, you can earn R153 250 in the 2026/2027 tax year without paying tax. That amounts to around R12 770 a month.

If you were over the age of 75 in the 2026/2027 tax year, you can earn R171 300 a year before you will pay tax. That is about R14 275 a month. Check the thresholds for the current and previous tax year here.

Every individual taxpayer – regardless of their income – is able to receive this level of income without paying tax. If you earn more than the tax threshold, you will pay tax, but not on the first R99 000 – or the higher amount for those over the age of 65.

Is the tax threshold adjusted annually?

The tax thresholds should be adjusted each year for inflation. However, when the government is under pressure to collect revenue it may not adjust the threshold to collect more tax from income earners as their income increases to compensate for inflation. The threshold was not increased in 2025.

When this happens, some low-income earners who are not paying tax may find their increase makes them liable for tax.

And every higher earner will also be liable for tax on a little more of their income. This is commonly referred to as bracket creep because the increase to keep up with inflation pushes your income up the tax brackets. You may take home more money, but the buying power of that money is not the same as it was the year before - your real (after-inflation) income is reduced.

How is the tax threshold applied?

When the tax you are required to pay is calculated, the tax tables are applied with different tax rates applying to different bands of your income.

In order to take account of the tax threshold or the amount you are allowed to earn without paying tax, a tax rebate is applied. The rebate reduces the amount of tax calculated using the tax tables, and the effect is that not tax is applied on your income up to the threshold.

If you arey employed and your employer is deducting Pay as You Earn (PAYE) tax from your wages or salary before paying you, your employer will work out the tax and apply the threshold by deducting the rebate. Your employer will work out how much tax to deduct each month, assuming you will be employed for the full year.

If your employer has been deducting PAYE on this basis but you do not work the full year because you resign to take time off or you lose your job, you may be due a tax refund because the tax threshold applies to your income for the year, regardless of how many months you work. There may also be other factors that affect your tax liability.

The tax threshold for the self-employed

If you are self-employed – freelancing or working in the gig economy - and you earn more than the tax threshold, you need to pay tax. Make sure you register for tax and pay it as penalties can be applied if the South African Revenue Service finds out you are earning taxable income without declaring your income or paying that tax.

You need to file a return and pay this tax at the end of the tax year, unless you earn above the income tax threshold and your income from sources other than remuneration, rental from the letting of fixed property and remuneration from an unregistered employer - exceeds the provisional tax threshold.  In this case, you must register for provisional tax and pay it during the tax year – at the end of August and again at the end of February.

This article was written by Smart About Money editor, Laura du Preez. It was reviewed by Gert van Heerden, the head of technical practitioner relations and support at the South African Institute for Taxation.