South Africa is a country of incredible natural beauty, a diverse culture, and growing opportunities for international professionals. But before you settle in, it’s important to understand how the South African tax system works and especially if you’re moving there for work or investment.

This guide explains everything expats need to know about taxes in South Africa for 2026, including residency rules, income tax rates, key deductions, and how to file your return through the South African Revenue Service (SARS).

The Basics of the South African Tax System

South Africa operates on a residency-based tax system, which means residents are taxed on their worldwide income, while non-residents are taxed only on South African-sourced income.

The tax year runs from March 1, 2025, to February 28, 2026, and the filing deadline usually falls between July and October 2026, depending on how you file (online or manually).

The tax authority in South Africa is the South African Revenue Service (SARS), which handles income tax, VAT, and other tax types.

Who Has to Pay Taxes in South Africa

Your tax liability depends on whether you qualify as a tax resident or non-resident.

You are considered a tax resident if you meet either of these conditions:

• You are ordinarily resident in South Africa (it’s your main or permanent home), or

• You meet the physical presence test, which requires you to be in South Africa for:

  • More than 91 days in the current tax year, and

  • More than 91 days in each of the five preceding tax years, and

  • More than 915 days in total over those five years.

Residents pay tax on worldwide income, while non-residents are taxed only on income earned in South Africa.

Example:
If you move to Cape Town in mid-2025 for a long-term position, you’ll likely become a tax resident by 2026 and pay tax on all income, including overseas earnings. If you work on a six-month contract, you’ll only be taxed on the salary you earn locally.

Income Tax Rates in South Africa for 2026

South Africa has a progressive income tax system, meaning that higher earnings are taxed at higher rates.

Income tax brackets for the 2025/2026 tax year

There is also a tax rebate that reduces the total tax you owe, depending on your age:

• Primary rebate: ZAR 17,235 (for all taxpayers)

• Secondary rebate: ZAR 9,444 (for people aged 65–74)

• Tertiary rebate: ZAR 3,145 (for people aged 75 and older)

The tax threshold (the income below which you don’t pay any tax) for 2026 is:

• ZAR 95,750 for taxpayers under 65

• ZAR 148,217 for taxpayers aged 65–74

• ZAR 165,689 for taxpayers 75 and older

Additional Taxes and Contributions

Besides income tax, expats may also be subject to other contributions and taxes:

• Unemployment Insurance Fund (UIF): Employees contribute 1% of their salary, matched by the employer.

• Capital Gains Tax (CGT): Applies to profits from selling property or assets; up to 18% for individuals.

• Value-Added Tax (VAT): 15% on most goods and services.

• Dividend Withholding Tax: 20% on dividends paid to shareholders.

South Africa does not impose wealth or inheritance taxes, but estate duty applies to large estates.

Tax Exemptions for Foreign Income

If you are a South African tax resident working abroad for part of the year, you may qualify for the foreign employment income exemption.

To qualify, you must:

• Work outside South Africa for at least 183 days in any 12-month period, including a continuous period of at least 60 days abroad.

The first ZAR 1.25 million of foreign employment income may be exempt from South African tax. Income above this amount is taxable but may qualify for foreign tax credits under double taxation treaties.

Deductions and Tax Reliefs

South Africa allows several deductions and tax credits to reduce your taxable income.

Common deductions include:

• Pension fund, retirement annuity, or provident fund contributions (within limits).

• Medical scheme contributions and out-of-pocket medical expenses.

• Donations to registered public benefit organizations.

• Travel and business expenses (for eligible employees or self-employed individuals).

• Home office expenses, if you regularly work from home for your employer.

Example:
If you earn ZAR 900,000 annually and contribute ZAR 100,000 to a retirement annuity, that amount can be deducted from your taxable income, lowering your overall tax liability.

Double Taxation Agreements

South Africa has double taxation agreements (DTAs) with more than 70 countries, including the United States, the United Kingdom, Germany, Australia, and Canada.

These agreements prevent you from paying tax twice on the same income and define which country has the right to tax certain types of income, such as salaries, dividends, or pensions.

If you pay tax in another country, you may claim a foreign tax credit in South Africa to offset your liability, provided the income is reported correctly to SARS.

How to File Taxes in South Africa

Filing taxes in South Africa is simple, especially through SARS’s online system.

Step 1: Register for a tax number
If you work in South Africa, your employer or SARS will help you register for a tax number. You can also apply directly via the SARS website.

Step 2: Gather your documents
Collect your IRP5 certificate (issued by your employer), proof of deductions, and details of any additional income (such as rental or freelance income).

Step 3: File through eFiling
Use SARS’s online platform, https://www.sarsefiling.co.za, to complete and submit your tax return. Most expats can use this system to file quickly and securely.

Step 4: Pay or claim a refund
After submission, SARS will process your return and issue a tax assessment. If you owe tax, payment is due by the deadline. Refunds are typically issued within a few weeks.

Tax Tips for Expats in South Africa

• Keep detailed records of income, deductions, and foreign earnings.

• Check if your home country has a DTA with South Africa before you relocate.

• If you work abroad temporarily, ensure you qualify for the foreign income exemption.

• Remember that employer benefits (such as housing or company cars) may be taxable.

• Consider using a South African tax practitioner for your first year of filing.

South Africa’s system is transparent and efficient, especially with online filing. Once you understand your residency status and take advantage of exemptions and deductions, managing taxes becomes straightforward.