How Is PAYE Calculated in South Africa? 2026/27 Guide
Short answer
PAYE (Pay As You Earn) is worked out by multiplying monthly pay by 12, subtracting retirement contributions, applying the SARS tax table, then deducting rebates and medical credits. Divide the result by 12. For 2026/27, someone under 65 earning R15 000 a month pays R1 215 PAYE plus R150 UIF.
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The 2026/27 tax year runs from 1 March 2026 to 28 February 2027, according to SARS.
What is the correct formula for calculating taxable income?
Monthly pay multiplied by 12, less retirement fund contributions within the limit, gives your taxable income. This is the annualised method behind SARS’s monthly tables. It has five steps:
- Multiply monthly pay by 12 to get annual pay.
- Subtract retirement fund contributions within the limit. The result is your taxable income.
- Work out the tax on that taxable income from the tax table.
- Subtract the rebates for your age band and any medical scheme fees tax credits.
- Divide the result by 12. That is the PAYE for the month.
According to the SARS Budget Tax Guide, retirement fund contributions are deductible up to 27.5% of remuneration, capped at R430 000 a year.
SARS’s monthly deduction tables round to the rand. A table lookup can therefore differ from this calculation by up to R1.
What are the tax deduction tables for 2026?
The 2026/27 tax year uses seven brackets, from 18% up to 45%. According to SARS, the rebates are:
- Primary rebate (all taxpayers): R17 820
- Secondary rebate (65 and older): R9 765
- Tertiary rebate (75 and older): R3 249
The tax thresholds, below which no tax is due, are R99 000 a year under 65, R153 250 for ages 65 to 74, and R171 300 for 75 and older.
You also get the medical scheme fees tax credit. SARS lists it as R376 a month for one person, R752 for two and R254 for each additional dependant. The full bracket table is further down this page.
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How much tax do I pay if I earn R15 000?
Under 65 on R15 000 a month, PAYE is R1 215 a month in 2026/27. Here is the working:
- Annual pay: R15 000 × 12 = R180 000
- Tax from the table: R32 400 (18% of R180 000)
- Less the primary rebate of R17 820: R14 580 tax for the year
- Divided by 12: R1 215 a month
R180 000 a year is well above the R99 000 threshold, so tax is due.
UIF is separate. According to SARS, it is 1% from the employee and 1% from the employer, on remuneration up to R17 712 a month. On R15 000 that is R150 from the employee. Take-home pay is R13 635.
2026/27 PAYE tax table and a checklist
Copy the table below. The figures come from SARS.
| Taxable income | Tax |
|---|---|
| R1 to R245 100 | 18% of taxable income |
| R245 101 to R383 100 | R44 118 + 26% of the amount above R245 100 |
| R383 101 to R530 200 | R79 998 + 31% of the amount above R383 100 |
| R530 201 to R695 800 | R125 599 + 36% of the amount above R530 200 |
| R695 801 to R887 000 | R185 215 + 39% of the amount above R695 800 |
| R887 001 to R1 878 600 | R259 783 + 41% of the amount above R887 000 |
| R1 878 601 and above | R666 339 + 45% of the amount above R1 878 600 |
Tick off each step and fill in the blank:
- Step 1: Monthly pay × 12 = R________ a year
- Step 2: Less retirement fund contributions (within the limit) = taxable income R________
- Step 3: Tax from the table = R________
- Step 4: Less rebates and medical credits = tax for the year R________
- Step 5: Divide by 12 = PAYE R________ a month
Check your result with the salary tax calculator.
Worked example: Thandi Nkosi’s PAYE in Johannesburg
For example, Thandi Nkosi is a bookkeeper in Johannesburg, under 65, earning R30 000 a month. She is illustrative, not a real customer.
- Annual pay: R360 000
- Tax from the table: R73 992 (R44 118 + 26% of R114 900)
- Less the primary rebate of R17 820: R56 172 tax for the year
- PAYE: R4 681 a month
- UIF: R177.12 (capped at R17 712 × 1%)
- Take-home: R25 141.88
Variation 1: medical scheme. If Thandi is on a medical scheme with two people, the credits are R9 024 for the year. PAYE drops to R3 929 a month.
Variation 2: aged 65 to 74. With the combined rebates of R27 585, tax for the year would be R46 407. PAYE would be R3 867.25 and take-home R25 955.63.
Variation 3: a bonus. A bonus is taxed at the extra annual tax it causes. A R30 000 bonus on top of her R30 000 monthly pay costs R8 145 in tax (under 65).
A comparison at R25 000. For example, Sipho Dlamini in Durban earns R25 000 a month and is under 65.
- Tax from the table: R58 392
- Less the rebate of R17 820: R40 572 a year
- PAYE: R3 381 a month
- UIF: R177.12
- Take-home: R21 441.88
These numbers come from the same engine as the salary tax calculator. They can differ from SARS’s rounded tables by up to R1.
FAQ
How much PAYE will be deducted?
It depends on your annual pay, age, retirement contributions and medical credits. For example, under 65 on R15 000 a month, PAYE is R1 215. On R30 000 it is R4 681 (2026/27). Use the salary tax calculator for your own figures.
At what salary do you start paying PAYE in South Africa?
Under 65, the tax threshold for 2026/27 is R99 000 a year. It is R153 250 for ages 65 to 74 and R171 300 for 75 and older, according to SARS.
Is UIF part of PAYE?
No. UIF is a separate deduction of 1% from the employee and 1% from the employer, on pay up to R17 712 a month. It does not change the PAYE amount.
How is PAYE on a bonus calculated?
A bonus is taxed at the extra annual tax it causes. For example, on R30 000 a month, a R30 000 bonus costs R8 145 in tax for someone under 65.
Do medical aid contributions lower my PAYE?
Yes, through the medical scheme fees tax credit, which is deducted from your annual tax. It is R376 a month for one person, R752 for two and R254 for each additional dependant.