If you earn taxable income in South Africa, paying tax to the government is mandatory. Understanding specific tax filing concepts is crucial to making informed decisions. For instance, you should know whether you are paying more taxes than required or not. Furthermore, against this background, this article explains different concepts you should know about filing tax returns
What Is the Difference Between Tax Rebate and Tax Threshold?
Individual taxpayers are liable to get deductions and exemptions on their taxable income when they file their tax returns to lower their tax burden. One way of reducing the tax you pay is through tax rebates.
Tax rebate is the relief one can claim to reduce the money they pay for taxes or tax burden. It refers to the money or tax liability you should not pay. You get a rebate before paying your tax, unlike a tax refund, which you get from the government for paying taxes that exceed the amount you should pay. Tax rebates are deducted from your tax payable and help establish tax thresholds.
The tax threshold is the income level that one must earn or generate in case of business to be liable to pay tax to the South African Revenue Service (SARS). When you earn below the tax threshold, you will not pay any income tax (pay-as-you-earn or PAYE) to SARS. The tax threshold is also determined by the taxpayer’s age. Even when your income amount falls below a threshold, you still need to file tax returns, although no money will be deducted.
The following rebates apply to different taxpayers in South Africa for this tax year.
- Primary rebate: All natural persons R17,235
- Secondary rebate: R9,444 if you are 65 years old or more
- Tertiary rebate: R3,145 for taxpayers above 75 years
The personal Income Tax threshold for taxpayers in South Africa is as follows:
- R95 750 per year for individuals younger than 65 years.
- R148 217 for people older than 65 years but younger than 75 years
- R165 689 for taxpayers above 75 years
Depending on your age, if you earn more than the amount shown above, you will be liable to pay income tax.
What Is the Interest Rebate for SARS?
Interest rebates that can be earned by someone under 65 years are about R23 800 per year and R34 500 per year for individuals aged 65 years or more. If you are out of the country for 182 consecutive days, you will also be exempt from tax.
What Is the Tax Threshold for 2025 in South Africa?
The 2025 tax threshold in South Africa is as follows:
- People under 65 years: R95 750
- Individuals aged 65 years but below 75: R148 217
- People who are 75 years or older: R165 689
The tax threshold is reviewed yearly, but it has not changed for the 2025-2026 tax year.
How Much Must You Earn to Submit a Tax Return in South Africa?
Filing your tax return and paying income tax are two things you should not overlook, especially when you earn money that is above the threshold. However, if you are a pensioner or employer earning above the stipulated threshold, you will be liable to pay tax but not a tax return.
For instance, if your income is below R500 000 per year or R41 666, the money comes from a single source from which your tax is deducted; you may not be required to file an income tax return. You will need to file a return even when you earn below R500 000 from a single source upon which tax is deducted but earn other money from business income, rental income, and others.
Once you accept auto-assessment for your income tax, your tax return will be submitted on your behalf. Remember, you may face persecution and penalties if you fail to file your return. Suppose you don’t understand anything related to tax filing. In that case, it is a good idea to consult a tax attorney to avoid consequences like penalties that can affect your financial situation in the future.
Does a Negative Balance Mean SARS Owe Me?
When you have a negative balance on your statement, it means SARS owes you money, and you should get a refund. If SARS owes you a refund, it will be processed electronically and will be reflected in your bank account in about two to three days.
If your refund is not released within 72 hours after receiving your ITA34, it might be due to any of the following reasons.
- Incorrect banking details
- Your tax account is undergoing tax audit or verification
- You have unpaid balances
- You have outstanding returns
Make sure you check your account regularly so that you don’t miss anything.
If you earn taxable income in South Africa, you are responsible for meeting your tax obligations to avoid issues like penalties for non-compliance. It is vital to understand different concepts related to tax filing to make a meaningful decision. For instance, you should know how the tax threshold affects your tax return.
