How do I calculate my taxable income for provisional tax?

# How to Calculate Your Taxable Income for Provisional Tax **Taxable income for provisional tax is your estimated total income from all sources for the tax year, minus allowable deductions.** This includes business income, rental income, investment returns, and capital gains that will be subject to normal tax rates. ## Income Components to Include Your provisional tax calculation must include these income sources: **Business and Professional Income** - Trading income from sole proprietorship or partnership - Professional fees and consulting income - Commission and freelance earnings - Gross profit from business operations **Investment and Property Income** - Rental income from property letting - Interest income exceeding the annual exemption (R23,800 for individuals under 65, R34,500 for those 65+) - Dividend income above the R23,800 annual exemption - Foreign dividend income **Capital Gains** - Taxable capital gains from asset disposals - Only the taxable portion (after applying the R40,000 annual exclusion and inclusion rate) **Other Taxable Income** - Income from trusts or estates - Royalties and intellectual property income - Annuity payments - Fringe benefits not covered by PAYE ## Allowable Deductions Subtract these business-related expenses: - Operating expenses directly related to income generation - Professional fees and subscriptions - Travel expenses for business purposes - Home office expenses (if applicable) - Depreciation on business assets - Bad debts written off ## Calculation Method **Step 1:** Add all gross income sources listed above **Step 2:** Subtract allowable business deductions **Step 3:** Add taxable capital gains (after exclusions) **Step 4:** The result is your estimated taxable income ## Practical Example If you earn R500,000 business income, R60,000 rental income, and R30,000 interest, minus R80,000 in allowable deductions: - Gross income: R590,000 - Less deductions: R80,000 - **Estimated taxable income: R510,000** ## Important Notes Your estimate must be **reasonable and based on available information**. SARS can impose penalties for deliberately understating income. Review and adjust estimates when circumstances change significantly during the tax year. For accounting practices managing multiple provisional taxpayers, **WeekdayApp automates provisional tax deadline tracking and client management**, helping ensure no payments are missed while streamlining the compliance process.