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taxes

Provisional Tax in South Africa: A Guide for 2025 Tax Year

Navigating provisional tax in South Africa can be quite the puzzle, whether you're a small business or a freelancer. Understanding who needs to register, when to make payments, and what happens if you miss deadlines is key to staying on the right side of the taxman. 

In this article, we'll break down all you need to know about provisional tax in a simple, easy-to-understand way. So, whether you're just starting out or looking to brush up on your tax knowledge, we've got you covered!

We will discuss the following topics:

What is provisional tax?

Provisional tax is an advance payment of your estimated tax liability for the year. It's a method used by SARS to ensure a steady flow of income tax receivable, similar to how PAYE is collected monthly.

All companies are registered as provisional taxpayers. However, only the following natural persons are considered provisional taxpayers:

  • Individuals who earn income from an employer not registered in terms of paragraph 15 of the 4th Schedule.
  • Individuals who earn income that does not qualify as remuneration, allowance, or advance as specified in section 8(1) of the Income Tax Act.
  • Individuals notified by the commissioner that they are provisional taxpayers.

Who needs to register as a provisional taxpayer?

In simple terms, the following individuals need to register as provisional taxpayers:

  • Anyone running a business
  • Anyone earning income from interest, dividends, foreign dividends, rental from property, and any remuneration from an employer not registered in terms of paragraph 15 of the 4th Schedule, unless the total does not exceed R30,000 for the year.

Provisional tax payments are made in two compulsory instalments and one non-compulsory third payment.

  1. The first payment is due six months after the start of the financial year.
  2. The second before the end of the financial year, and the third non-compulsory payment is due six months after the year-end for companies and seven months after the year-end for individuals.
  3. The third payment aims to prevent interest from being calculated on tax due that was not paid during the first two provisional tax payments.

How do I register as a provisional taxpayer?

You can follow the next few step to register for provisional tax:

  1. Login to your eFiling profile.
  2. Click on Home on the top menu.
  3. Click on User on the left menu and then on Tax Types.
  4. Tick the box next to Provisional Tax (IRP6) and your income tax number next to it.
  5. Click on Register.
View SARS Tax Brackets & Tax Tables for 2023-2024

How should it be paid?

The current process includes:

  • Register for SARS eFiling. The eFiling facility allows you to request for an IRP6 return and make your submission and payments online. You can register once for all different tax types using the client information system.
  • If you are already an eFiler, simply add provisional tax to your profile so that you can access and file your IRP6 return online.

First provisional tax return (Par 19 of the 4th Schedule)

SARS will issue an IRP6 return with a basic amount of taxable income that is based on the latest assessment of previous tax returns. If the previous tax return is older than 18 months, SARS will increase the basic amount by 8% per annum.

Your provisional tax calculation may not be less than the basic amount calculated by SARS unless you can justify the lower amount. As your calculation can’t be lower than the basic amount of SARS no penalties exist for underpayment of provisional tax for the first period, however there will be a 10% penalty for the late submission and payment of the provisional tax if you have missed the deadline.

If SARS has issued an IRP6 with a basic amount based on an old assessment and the latest assessment of taxable income has been issued, it may be used by the taxpayer as the basic amount if that assessment was issued more than 14 days prior to the deadline of the provisional tax payment.

Second provisional tax return (Par 20 of the 4th Schedule)

The second provisional tax payment is a bit more complicated than the first. Two categories exist:

  • Where the actual taxable income is less than R1 Million, or
  • Where the actual taxable income is more than R1 Million.

Let’s start with the first category. If your actual taxable income is less than R1 million, your estimation of taxable income for the second period may not be less than the lower of:

  • 90% of the taxable income, or
  • The basic amount as calculated by SARS.

If your estimation is less than the lower of the above calculated amount, a 20% penalty will be levied on the difference between your estimation and the amount calculated above.

If your taxable income is more than R1 million, you don’t have the benefit of using the basic amount as calculated by SARS. Your estimation of the taxable income for the second provisional tax payment may not be less than 80% of the actual taxable income.

If your estimation is lower than 80% of the actual taxable income, a 20% penalty will be levied on the difference between your estimation and 80% of the actual taxable income. Again a 10% penalty will be levied on the late submission and payment if you have missed the deadline.

Provisional tax has more meat to the bone than what you thought and for this reason I strongly recommend all taxpayers to keep track of their actual income and expenses.

Third provisional tax return

  • The total estimated tax for the full year;
  • Less the employees tax paid for the full year;
  • Less any allowable foreign tax credits for the full year;
  • Less any applicable rebates or medical tax credits;
  • Less the amount paid for the 1st and 2nd provisional tax periods.

When to pay provisional tax?

Payment

Due Date

First Provisional Tax Payment

Within six months of the start of the year of assessment (e.g., 31 August for years starting in March, or the last business day before that date if it falls on a weekend or public holiday)

Second Provisional Tax Payment

No later than the last working day of the year of assessment (last business day of February)

Third Provisional Tax Payment

Voluntary, for companies with a year end of the last day of February and any other person (other than a company), the last business day of September; in any other case, within six months of the end of the year of assessment.

Here the exact dates:

Due Date

Tax Year 2025

1st Provisional tax return

2024/08/30

2nd Provisional tax return

2025/02/28

Top-up payment (Optional)

2025/09/30

Income tax return

2026/01/23

Stay organised for tax time with QuickBooks Online

Software such as QuickBooks Online is most useful in supplying an easy way to capture accounting data with the professionality that is needed to comply with all required regulations such as VAT, provisional tax and income tax submissions.

For all individual provisional taxpayers as well as companies with a February financial year end, the deadline for the first provisional tax submission is 31 August. Please consult your accountant for any need to adjust your provisional tax payments.

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