If you run a small business corporation or are self-employed as a sole trader, it’s important to register as a taxpayer with the South African Revenue Service (SARS). This ensures that you or your business can pay any tax owed as well as receive business benefits.
The South Africa tax season and 2025 tax year starts on 1 March 2024.
Our guide to small business tax in South Africa covers the key steps you need to know as you approach tax season. In this guide, you will learn:
Here is the tax table for sole proprietors/individuals for the 2025 tax year:
| Taxable Income (R) | Rate of Tax |
| 1 - 237 000 | 18% of taxable income |
| 237 001 - 370 500 | 42 678 + 26% of taxable income above 237 100 |
| 370 501 - 512 800 | 77 362 + 31% of taxable income above 370 500 |
| 512 801 - 673 000 | 121 475 + 36% of taxable income above 512 800 |
| 673 001 - 857 900 | 179 147 + 39% of taxable income above 673 000 |
| 857 901 - 1 817 000 | 251 258 + 41% of taxable income above 857 900 |
| 1 817 001 and above | 644 489 + 45% of taxable income above 1 817 000 |
Here is the tax table for small businesses corporations for the 2025 tax year:
| Taxable Income (R) | Rate of Tax |
| 1 - 95 750 | 0% of taxable income |
| 95 751 - 365 000 | 7% of taxable income above 95 750 |
| 365 001 - 550 000 | 18 848 + 21% of taxable income above 365 000 |
| 550 001 and above | 57 698 + 27% of the amount above 550 000 |
All companies registered under the ordinary small business tax system are required to pay tax using the provisional tax method, which spreads out the tax liability over the assessment period.
This system requires at least two amounts to be paid in advance, and calculating what you owe is crucial to making sure you’re not left with a large bill at the end of the year.
Filing and paying taxes correctly and on time is essential for any business. However, many small business owners are unsure about when and how to file taxes. In South Africa, the type of tax a company is registered for will determine its tax filing requirements.
Different types of taxes have different requirements:
Income tax is paid annually. Individuals and sole traders complete an individual tax return (ITR12), while companies file a company tax return (ITR14). Income tax looks back at the previous tax year.
Provisional tax is paid in two instalments to help companies and sole traders manage their tax payments throughout the year. The first payment is made within six months of the start of the assessment year (31 August for years starting in March) and covers half of the estimated total tax for the year.
The second payment is due by the last working day of the assessment year (28/29 February) and covers the remaining estimated tax, minus the first payment. To avoid penalties and interest, ensure you pay between 80 to 90 percent of your income tax for the year. Any late payments incur a 10% penalty and interest.
Employees’ tax, or PAYE, is paid monthly by employers who deduct it from their employees' earnings and submit it to SARS using an EMP 101 form. Once registered, employers receive a monthly EMP 201 return to complete with the payment of employees' tax. Directors' remuneration in private companies is also subject to employees' tax.
Turnover tax is a simplified tax system for small businesses with a turnover of up to R1 million per annum. It is based on the turnover of a business and is available to sole proprietors (individuals), partnerships, close corporations, companies and cooperatives.
Turnover tax is a substitute for VAT, provisional tax, income tax, capital gains tax, and secondary tax on companies. So qualifying businesses pay a single tax instead of five other taxes. It’s elective – so you choose whether to participate.
There are three payment dates for turnover tax:
| Tax Event | Date |
| Mid-tax year deadline (last business day of August | Last business day of August |
| End of tax year deadline (last business day of February) | Last business day of February |
| Submission of annual TT03 and income tax returns (processed) | Between 1 July and 31 January of next year |
For VAT registration in South Africa, certain products and services are exempt. If your business trades only in these items, it's classified as VAT exempt. This means you can't reclaim VAT on costs like accountant's fees.
VAT-exempt areas include non-fee related financial services, educational services by approved institutions, residential rental, and public transport. Partial exemption occurs when your business sells both exempt and taxable products.
Zero-rated VAT differs from exemption. Zero-rated goods include farming inputs, government grants, and exports. Register for VAT if you supply zero-rated goods to reclaim VAT on costs. But if you're exempt, you can't reclaim VAT.
To file for VAT exemption, ensure it suits your business. If you're registered, you can reclaim VAT on sales costs. However, adding VAT to your sales might affect customer affordability. You can file for exemption through the SARS website.
Small businesses must meet specific tax requirements to ensure compliance. They should identify the applicable small business tax category and maintain accurate financial records annually, preferably using suitable accounting software.
To be classified as a Small Business Corporation (SBC) by the South African Revenue Service (SARS), a business must meet the following criteria:
For qualification for small business turnover tax, the following criteria apply:
Taxpayers have several options when completing their tax returns. Many small business owners choose to use SARS e-filing, an online filing portal, to complete their tax returns themselves.
It is also possible to receive telephonic assistance, or go to a branch and have an agent help you with your form. Larger businesses may use the services of a qualified accountant.
Follow our below tips on how to file your business tax return or read our step-by-step guide on how to file your own business tax here.
To make tax filing quicker and more accurate, you’ll want to gather all the supporting documents, including:
QuickBooks Online accounting software can help you track your business transactions in one place - simplifying record keeping for tax time. QuickBooks Expense Tracker and invoicing software help you stay on top of your tax-deductible business expenses and invoices.
There are plenty of upsides that come with running a business. When it comes to taxes, one of the biggest perks is being able to reduce your taxable income, and therefore your tax bill by deducting legitimate business expenses through SARS registration.
We’ve put together a list of possible tax-deductible business expenses for small business corporations and self-employed expenses for sole traders to help you capture all possible deductions when submitting tax in South Africa.
Online accounting software like QuickBooks Online makes it easier to keep track of your business and stay on top of tax obligations by automating many of the manual tasks small business owners have to do - like tracking and reconciling expenses, and managing cash flow.
QuickBooks Expense Tracker and invoicing software help you stay on top of your tax-deductible business expenses and invoices. This can help save you a ton of time - and possibly money that could be better spent on the important things. It also integrates with other apps you may already be using to run your business (like Shopify or Square) so you can see your business transactions all in one place.
As a small business owner you often have to do it all, leaving you with little time to find answers to questions. It can help to find a trusted accounting professional to guide you through tax time. Accountants are up to date on the current policies and requirements and can often help you uncover deductions you may not have thought about.
Find a QuickBooks certified professional accountant near you.
If you’re looking for “an easier way to do this” get started with QuickBooks today and set yourself up for the year to come. Join a free 30-day trial and see how QuickBooks can help your small business.
If you’ve prepared your books with a tool like QuickBooks, you’re already well positioned, and can share your financial info quickly and easily with your tax professional. Having everything ready to go can also help reduce your tax preparation bill.
More information for Small Businesses from SARS can be found on the SARS website.
Reviewed by Nadine Augustine
Call sales: +27 10 203 4300
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