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Tax Rates for the financial year ending 28 February 2017

Taxable Income (R) Rate of Tax (R)
0 – 188 000 18% of taxable income
188 001 – 293 600 33 840 + 26% of taxable income above 188 000
293 601 – 406 400 61 296 + 31% of taxable income above 293 600
406 401 – 550 100 96 264 + 36% of taxable income above 406 400
550 101 – 701 300 147 996 + 39% of taxable income above 550 100
701 301 and above 206 964 + 41% of taxable income above 701 300

Tax Rebates

Primary (Persons below age 65) R13 500
Secondary (Persons 65 and older) R7 407
Tertiary (Persons 75 and older) R2 466

Tax Thresholds

Age Tax Threshold
Below age 65 R75 000
Age 65 to below 75 R116 150
Age 75 and over R129 850

Interest Exemption

Below age 65 R23 800 per annum
Above age 65 R34 500 per annum

Dividends

Dividends received by individuals from a South African company is exempt from income tax. The company paying the dividend will pay dividends tax of 15%.

Dividends received by a South African resident from REIT’s are subject to income tax.

Foreign Dividends are taxed at a maximum effective rate of 15%.

Medical Deductions

Effective 1 March 2013 the medical scheme fees tax credit system will be as follows:

A medical scheme contribution tax credit will be available to taxpayers who belong to a medical scheme and are below the age of 65 (including persons with a disability), set at fixed amounts per month:

  • R 286 per month for contributions made by the taxpayer and for the first dependant; plus
  • R 192 per month in respect of each additional dependant.

In the case of:

  • an individual who is 65 and older, or if that person, his or her spouse or child is a person with a disability, 33,3% of qualifying medical expenses paid and borne by the individual and an amount by which medical scheme contributions paid by the individual exceed 3 times the medical scheme fees tax credits for the tax year;
  • any other individual: 25% of an amount equal to qualifying medical expenses paid and borne by the individual and an amount by which medical scheme contributions paid by the individual exceed 4 times the medical scheme fees tax credits for the tax year, limited to the amount which exceeds 7,5% of taxable income (excluding retirement fund lump sums and severance benefits).

Retirement Fund Contributions

Amounts contributed to pension, provident and retirement annuity funds during a tax year are deductible by members of those funds. Amounts contributed by employers and taxed as fringe benefits are treated as contributions by the individual employee. The deduction is limited to 27.5% of the greater of remuneration for PAYE purposes or taxable income (both excluding retirement fund lump sums and severance benefits). Furthermore, the deduction is limited to a maximum of R350 000. Any contributions exceeding the limitations are carried forward to the next tax year and are deemed to be contributed in that following year. The amounts carried forward are reduced by contributions set off when determining taxable retirement fund lump sums or retirement annuities.

Donations

The deduction is limited to 10% of an individual’s taxable income to a public benefit organisation. Such an organisation must be specifically approved by the South African Revenue Service and they must issue with their receipt confirming your contribution. The amount of donations exceeding 10% of the taxable income is treated as a donation to qualifying public benefit organisations in the following tax year.

Travel Allowance

Actual cost travel claim

Value of the Vehicle

(Incl VAT) (R)

Fixed Cost

(R p.a.)

Fuel Cost

(c/km)

Maintenance Cost

(c/km)

0 – 80 000 26 675 82.4 30.8
80 001 – 160 000 47 644 92.0 38.6
160 001 – 240 000 68 684 100.0 42.5
240 001 – 320 000 87 223 107.5 46.4
320 001 – 400 000 105 822 115.0 54.5
400 001 – 480 000 125 303 132.0 64.0
480 001 – 560 000 144 784 136.5 79.5
Exceeding 560 000 144 784 136.5 79.5

 

Where the distance travelled for business purposes does not exceed 8 000 kilometres per annum, no tax is payable on an allowance paid by an employer to an employee up to the rate of 329 cents per kilometre, regardless of the value of the vehicle. However, this alternative is not available if other compensation in the form of an allowance or reimbursement (other than for parking or toll fees) is received from the employer in respect of the vehicle.

Capital Gains Tax

Maximum effective rate of tax:
Individuals and special trusts 16.4%
Companies 22.4%
Other trusts 32.8%

Annual Exclusion of R40 000 capital gain or capital loss is granted to individuals and special trusts. This amount increases to R300 000 on the year of death.

R2 million gain exclusion on the disposal of a primary residence.

Tax Rates for the financial year ending 28 February 2017

Taxable Income (R) Rate of Tax (R)
0 – 188 000 18% of taxable income
188 001 – 293 600 33 840 + 26% of taxable income above 188 000
293 601 – 406 400 61 296 + 31% of taxable income above 293 600
406 401 – 550 100 96 264 + 36% of taxable income above 406 400
550 101 – 701 300 147 996 + 39% of taxable income above 550 100
701 301 and above 206 964 + 41% of taxable income above 701 300

 Tax Rebates

Primary (Persons below age 65) R13 500
Secondary (Persons 65 and older) R7 407
Tertiary (Persons 75 and older) R2 466

 Tax Thresholds

Age Tax Threshold
Below age 65 R75 000
Age 65 to below 75 R116 150
Age 75 and over R129 850

 Interest Exemption

Below age 65 R23 800 per annum
Above age 65 R34 500 per annum

Dividends

Dividends received by individuals from a South African company is exempt from income tax. The company paying the dividend will pay dividends tax of 15%.

Dividends received by a South African resident from REIT’s are subject to income tax.

Foreign Dividends are taxed at a maximum effective rate of 15%.

Medical Deductions

Effective 1 March 2013 the medical scheme fees tax credit system will be as follows:

A medical scheme contribution tax credit will be available to taxpayers who belong to a medical scheme and are below the age of 65 (including persons with a disability), set at fixed amounts per month:

  • R 286 per month for contributions made by the taxpayer and for the first dependant; plus
  • R 192 per month in respect of each additional dependant.

In the case of:

  • an individual who is 65 and older, or if that person, his or her spouse or child is a person with a disability, 33,3% of qualifying medical expenses paid and borne by the individual and an amount by which medical scheme contributions paid by the individual exceed 3 times the medical scheme fees tax credits for the tax year;
  • any other individual: 25% of an amount equal to qualifying medical expenses paid and borne by the individual and an amount by which medical scheme contributions paid by the individual exceed 4 times the medical scheme fees tax credits for the tax year, limited to the amount which exceeds 7,5% of taxable income (excluding retirement fund lump sums and severance benefits).

Retirement Fund Contributions

Amounts contributed to pension, provident and retirement annuity funds during a tax year are deductible by members of those funds. Amounts contributed by employers and taxed as fringe benefits are treated as contributions by the individual employee. The deduction is limited to 27.5% of the greater of remuneration for PAYE purposes or taxable income (both excluding retirement fund lump sums and severance benefits). Furthermore, the deduction is limited to a maximum of R350 000. Any contributions exceeding the limitations are carried forward to the next tax year and are deemed to be contributed in that following year. The amounts carried forward are reduced by contributions set off when determining taxable retirement fund lump sums or retirement annuities.

Donations

The deduction is limited to 10% of an individual’s taxable income to a public benefit organisation. Such an organisation must be specifically approved by the South African Revenue Service and they must issue with their receipt confirming your contribution. The amount of donations exceeding 10% of the taxable income is treated as a donation to qualifying public benefit organisations in the following tax year.

Travel Allowance

Actual cost travel claim

Value of the Vehicle

(Incl VAT) (R)

Fixed Cost

(R p.a.)

Fuel Cost

(c/km)

Maintenance Cost

(c/km)

0 – 80 000 26 675 82.4 30.8
80 001 – 160 000 47 644 92.0 38.6
160 001 – 240 000 68 684 100.0 42.5
240 001 – 320 000 87 223 107.5 46.4
320 001 – 400 000 105 822 115.0 54.5
400 001 – 480 000 125 303 132.0 64.0
480 001 – 560 000 144 784 136.5 79.5
Exceeding 560 000 144 784 136.5 79.5

 Where the distance travelled for business purposes does not exceed 8 000 kilometres per annum, no tax is payable on an allowance paid by an employer to an employee up to the rate of 329 cents per kilometre, regardless of the value of the vehicle. However, this alternative is not available if other compensation in the form of an allowance or reimbursement (other than for parking or toll fees) is received from the employer in respect of the vehicle.

Capital Gains Tax

 Maximum effective rate of tax:

Individuals and special trusts 16.4%
Companies 22.4%
Other trusts 32.8%

Annual Exclusion of R40 000 capital gain or capital loss is granted to individuals and special trusts. This amount increases to R300 000 on the year of death.

R2 million gain exclusion on the disposal of a primary residence.