Who must pay provisional tax in South Africa?

# Who Must Pay Provisional Tax in South Africa? **All South African tax residents with taxable income above the tax threshold must pay provisional tax**, unless specifically exempted. The **tax threshold for 2024/2025 is R95,750** for individuals under 65, and **R148,217** for those 65 and older. ## Who Must Pay Provisional Tax ### Individuals (Natural Persons) You must pay provisional tax if you: - Carry on any business activity (including freelancing, consulting, or side businesses) - Have taxable income exceeding the annual tax threshold - Receive non-salary income like rental income, investment income, or business profits ### Companies and Close Corporations **All companies and close corporations** are provisional taxpayers, regardless of income level. This includes: - Private companies (Pty Ltd) - Close corporations (CC) - Foreign companies with South African income ### Trusts **All trusts** must pay provisional tax on their taxable income, with no minimum threshold exemption. ## Who is Exempt from Provisional Tax ### Natural Persons Exempted You don't need to pay provisional tax if you: - **Don't carry on any business**, AND your taxable income consists only of: - Salary or wages (PAYE income) - Interest up to **R23,800 per year** (under 65) or **R34,500** (65 and older) - Dividends from South African companies - Foreign dividends - Rental income up to the tax threshold ### Key Exemption Rule The critical factor is whether you "carry on business." Even if your main income is salary, **any business activity makes you a provisional taxpayer**. ## Important Thresholds for 2024/2025 - **Under 65:** R95,750 tax threshold - **65-75 years:** R148,217 tax threshold - **75+ years:** R165,689 tax threshold - **Interest exemption:** R23,800 (under 65), R34,500 (65+) ## Practical Examples **Must pay provisional tax:** - Freelance graphic designer earning R120,000 - Employee with rental property income of R50,000 - Consultant with business income above R95,750 - Any company, regardless of profit level **Exempt from provisional tax:** - Salaried employee with only bank interest under R23,800 - Pensioner with only pension and dividend income under threshold - Individual with only PAYE salary under R95,750 WeekdayApp's automated SARS deadline tracking helps accounting practices manage provisional tax compliance for all client types, with built-in reminders for the critical August and February payment dates. ## Next Steps If you qualify as a provisional taxpayer, you must: 1. Register with SARS as a provisional taxpayer 2. Submit IRP6 returns by **31 August** and **28 February** 3. Make payments with each return to avoid penalties