Free invoice generator and tax tools for South Africa

Almost every tax a South African small business pays goes to the South African Revenue Service (SARS). A sole proprietor's profit is added to any other income and taxed at the individual rates on the ITR12 return. A company pays 27% (28% for years ending before 31 March 2023). A company owned only by individuals, with gross income of no more than R20 million, may qualify as a small business corporation (SBC): for years ending 1 April 2026 to 31 March 2027 it pays nothing on the first R99 000 of taxable income, then 7%, 21% and 27% on higher slices.

Business owners pay provisional tax in two instalments, at the end of August and of February. Vendors charge 15% VAT. Employers send PAYE, UIF and the Skills Development Levy to SARS on one monthly EMP201.

The latest reform is the 2026 Budget of 25 February 2026: income tax brackets rose 3.4% for inflation, the first such relief since 2023/24, and turnover tax got its first update since 2009. The VAT increase announced in March 2025 was cancelled; section 13 of the Rates and Monetary Amounts and Amendment of Revenue Laws Act 3 of 2026 confirms it never takes effect.

Turnover tax is SARS's simplified regime for micro businesses (sole proprietors, partnerships, close corporations, companies and co-operatives) with qualifying annual turnover of R2.3 million or less, up from R1 million since 1 April 2026. It replaces income tax, provisional tax, capital gains tax and dividends tax, and also VAT unless the business chooses to stay VAT-registered. For years from 1 March 2026 to 28 February 2027, the first R600 000 of taxable turnover is tax-free. Turnover from R600 001 to R950 000 pays 1% of the amount above R600 000; from R950 001 to R1 400 000, R3 500 plus 2% above R950 000; above R1 400 000, R12 500 plus 3% of the excess. Register on the SARS Online Query System (SOQS) or with form TT01. Make two interim payments on the TT02 payment advice, by the last business day of August and of February, and file one TT03 return in the income tax season. Records are light: amounts received, dividends declared, and a year-end list of assets costing more than R10 000 and liabilities above R10 000.