Every South African employee wants to know one thing on payday: how much actually lands in my account? The gap between gross salary and take-home pay can be surprisingly large, especially once SARS PAYE, UIF, retirement contributions, and medical scheme credits are factored in.
This guide is a planning estimate for the 2026/27 tax year, which runs from 1 March 2026 to 28 February 2027. It walks through the SARS individual tax table, then runs four salary examples so you can see the basic mechanics before using the South Africa PAYE Calculator for your exact inputs.
SARS 2026/27 Tax Brackets
South Africa uses a progressive income tax system with seven brackets. SARS applies these rates to your annual taxable income, which is your gross income minus allowable deductions like pension contributions.
| Taxable Income (Annual) | Rate |
|---|---|
| R1 – R245,100 | 18% of taxable income |
| R245,101 – R383,100 | R44,118 + 26% above R245,100 |
| R383,101 – R530,200 | R79,998 + 31% above R383,100 |
| R530,201 – R695,800 | R125,599 + 36% above R530,200 |
| R695,801 – R887,000 | R185,215 + 39% above R695,800 |
| R887,001 – R1,878,600 | R259,783 + 41% above R887,000 |
| R1,878,601 and above | R666,339 + 45% above R1,878,600 |
These brackets are cumulative. You do not pay 26% on your entire income just because you earn R300,000. You pay 18% on the first R245,100, then 26% only on the portion between R245,101 and R383,100, and so on up.
SARS also provides three age-based rebates that reduce the tax you owe for 2026/27:
| Rebate | Annual Amount | Who Qualifies |
|---|---|---|
| Primary rebate | R17,820 | All taxpayers |
| Secondary rebate | R9,765 | Age 65 and older |
| Tertiary rebate | R3,249 | Age 75 and older |
The primary rebate is why the 2026/27 tax-free threshold is R99,000 per year for people under 65. The threshold rises to R153,250 for ages 65 to 74 and R171,300 for ages 75 and older.
How SA PAYE Works
PAYE stands for Pay As You Earn. Your employer calculates your estimated annual tax, divides it by 12, and withholds that amount from each monthly payslip. The basic steps are:
- Start with gross annual salary (monthly × 12)
- Subtract allowable deductions: pension/retirement fund contributions (up to 27.5% of remuneration or taxable income, capped at R430,000/year) and any other approved deductions
- Apply the 7-bracket table to the resulting taxable income
- Subtract the primary rebate (R17,820 for under-65s) from the calculated tax
- Subtract medical tax credits if applicable
- Divide by 12 to get your monthly PAYE
- Deduct UIF (1% of monthly remuneration, max R177.12)
The result is your monthly take-home pay. Let's see this in action with real numbers.
Worked Example: R15,000 per Month
A gross monthly salary of R15,000 is R180,000 per year. Here is the basic PAYE estimate, assuming the taxpayer is under 65 with no retirement contribution deduction and no medical scheme credit.
| Item | Monthly | Annual |
|---|---|---|
| Gross salary | R15,000 | R180,000 |
| Taxable income | R15,000 | R180,000 |
| Tax before rebate | R2,700 | R32,400 |
| Primary rebate | −R1,485.00 | −R17,820 |
| PAYE (tax after rebate) | R1,215.00 | R14,580 |
| UIF (1%) | R150.00 | R1,800 |
| Take-home pay | R13,635.00 | R163,620 |
At R15,000 per month, the full taxable income sits inside the first 18% bracket. The tax before rebate is R180,000 × 18% = R32,400. After the 2026/27 primary rebate and UIF, the estimated take-home pay is R13,635 per month before any other deductions.
Worked Example: R30,000 per Month
At R30,000 monthly, you're earning R360,000 per year. This pushes you into the second bracket.
| Item | Monthly | Annual |
|---|---|---|
| Gross salary | R30,000 | R360,000 |
| Taxable income | R30,000 | R360,000 |
| Tax on first R245,100 @ 18% | R44,118 | |
| Tax on R114,900 @ 26% | R29,874 | |
| Tax before rebate | R6,166.00 | R73,992 |
| Primary rebate | −R1,485.00 | −R17,820 |
| PAYE | R4,681.00 | R56,172 |
| UIF (1%) | R177.12 | R2,125.44 |
| Take-home pay | R25,141.88 | R301,702.56 |
Notice that UIF hits its ceiling here. The maximum monthly employee UIF deduction is R177.12, so anyone earning above R17,712 per month pays the same employee amount. In this simple example, PAYE plus UIF is about 16.2% of gross salary.
Worked Example: R60,000 per Month
R60,000 per month is R720,000 per year. At this level, the income reaches the fifth band of the 2026/27 SARS table.
| Item | Monthly | Annual |
|---|---|---|
| Gross salary | R60,000 | R720,000 |
| Taxable income | R60,000 | R720,000 |
| Base tax up to R695,800 | R185,215 | |
| Tax on R24,200 @ 39% | R9,438 | |
| Tax before rebate | R16,221.08 | R194,653 |
| Primary rebate | −R1,485.00 | −R17,820 |
| PAYE | R14,736.08 | R176,833 |
| UIF | R177.12 | R2,125.44 |
| Take-home pay | R45,086.80 | R541,041.56 |
At R60,000 monthly, the PAYE and UIF estimate is about 24.9% of gross salary before other deductions or credits. Retirement contributions and medical scheme credits can materially change the final payslip, so model those separately before making budget decisions.
Worked Example: R100,000 per Month
Earning R100,000 per month puts annual taxable income at R1,200,000, which reaches the 41% marginal band in the 2026/27 table.
| Item | Monthly | Annual |
|---|---|---|
| Gross salary | R100,000 | R1,200,000 |
| Taxable income | R100,000 | R1,200,000 |
| Base tax up to R887,000 | R259,783 | |
| Tax on R313,000 @ 41% | R128,330 | |
| Tax before rebate | R32,342.75 | R388,113 |
| Primary rebate | −R1,485.00 | −R17,820 |
| PAYE | R30,857.75 | R370,293 |
| UIF | R177.12 | R2,125.44 |
| Take-home pay | R68,965.13 | R827,581.56 |
At R100,000 a month, PAYE and UIF are about 31.0% of gross salary in this simplified estimate. The marginal rate is 41%, so an extra rand of taxable income in this band is taxed at 41 cents before any other payroll effects.
UIF and Medical Aid Credits
UIF (Unemployment Insurance Fund)
Every employee in South Africa contributes 1% of their monthly salary to UIF, and the employer matches it with another 1%. But there's a ceiling. The maximum insurable earnings are R17,712 per month, which caps your contribution at R177.12 per month regardless of how much you earn.
UIF is not tax-deductible. It comes straight off your gross pay after PAYE has been calculated. The fund covers you for up to 238 days of unemployment benefits if you lose your job, as well as maternity, adoption, and illness benefits.
Medical Aid Tax Credits
If you belong to a registered medical scheme, you may qualify for medical scheme fees tax credits. These do not reduce taxable income. Instead, they reduce the calculated tax liability directly.
| Member | Monthly Credit |
|---|---|
| First person covered | R376 |
| Second person covered | R376 |
| Each additional dependant | R254 |
So an employee covering a spouse and two children on a medical scheme could receive R376 + R376 + R254 + R254 = R1,260 per month against the calculated tax bill. That is R15,120 per year in tax credits, subject to the normal SARS rules.
Medical scheme fees credits are flat amounts, so they change the effective rate more at lower salary levels than at higher ones. If your employer applies medical scheme information through payroll, the credit normally appears in the PAYE calculation.
Pension and Retirement Deductions
Retirement fund contributions are one of the most important tax deductions available to South African employees. For 2026/27, contributions to pension funds, provident funds, or retirement annuity funds are deductible up to 27.5% of the greater of remuneration or taxable income, subject to an annual cap of R430,000.
Let's put numbers to this. Say you earn R60,000 per month and contribute 10% (R6,000/month) to your employer's pension fund. Your taxable income drops from R720,000 to R648,000 per year. That moves you down the bracket scale and saves you thousands in PAYE.
At a marginal rate of 39%, every extra R1,000 of deductible retirement contribution reduces current income tax by up to R390. The money still goes into the retirement fund, but retirement withdrawals or pension income can be taxed later under the rules that apply at that time.
Most employers automatically deduct pension contributions before calculating PAYE. If you have a retirement annuity (RA) that you fund privately, you'll need to claim that deduction when you file your annual tax return with SARS.
One thing to watch: the 27.5% limit is combined across retirement fund types. If your employer already contributes 15% of your salary, you need to account for that before adding a private retirement annuity claim. The R430,000 annual cap also means very high earners cannot shelter unlimited amounts.
Sources Checked on June 17, 2026
This article uses official SARS and National Treasury source material available on June 17, 2026. It is a planning guide, not tax advice or an official SARS assessment.
- SARS rates of tax for individuals for the 2027 tax year, covering 1 March 2026 to 28 February 2027.
- SARS medical tax credit rates for 2026/27 medical scheme fees tax credits.
- SARS Budget 2026 FAQ for 2026/27 rebates, thresholds, medical credits, and the retirement contribution cap.
- SARS UIF guidance for the 1% contribution rate, R17,712 monthly ceiling, and R177.12 maximum employee deduction.
- National Treasury Budget 2026 Tax Guide for retirement contribution and medical credit detail.
Calculate Your Exact Take-Home Pay
Plug in your salary, pension contributions, medical aid details, and age to estimate monthly and annual take-home pay for 2026/27.
Open SA PAYE Calculator →Frequently Asked Questions
For the 2026/27 tax year, the tax-free threshold is R99,000 per year for individuals under 65. For those aged 65 to 74, the threshold is R153,250. Taxpayers aged 75 and older have a threshold of R171,300.
UIF is 1% of your monthly remuneration, with a ceiling of R17,712 per month. This means the maximum you'll ever pay is R177.12 per month. Your employer pays an additional 1% on top, but that doesn't come out of your salary. UIF is not tax-deductible and is calculated separately from PAYE.
No, approved pension, provident, and retirement annuity contributions are tax-deductible up to 27.5% of the greater of remuneration or taxable income, capped at R430,000 per year for 2026/27. The contributions reduce taxable income before PAYE is calculated. You may still pay tax later when receiving retirement benefits under the rules that apply then.
Medical scheme fees tax credits are fixed monthly amounts that reduce PAYE tax directly. For 2026/27, the credit is R376 per month for each of the first two people covered and R254 for each additional dependant. These credits are subtracted from calculated tax liability, not from taxable income.
SARS typically opens the tax filing season in July each year. Non-provisional taxpayers filing online usually have until late October or early November. Provisional taxpayers (those with additional income like rental or freelance income) get an extension until late January of the following year. SARS announces exact dates annually, so check the SARS website or eFiling portal for the current year's deadlines.