Finance

Important tax deadline for South Africa next week – with 10% penalties if you miss it

Staff Writer

 ·28 Aug 2026

Provisional taxpayers have until close of business on Monday, 31 August, to make their first payment to the South African Revenue Service (SARS) for the 2027 tax year.

While taxpayers are in the midst of the 2026 tax return season, provisional taxpayers have already begun making payments for next year.

Provisional tax is not a separate tax from normal income tax; it is a method of paying income tax liability in advance to ensure that an atypical taxpayer doesn’t have a large tax debt when they are assessed.

While most taxpayers earn income from an employer, which is subject to Pay as you Earn (PAYE), provisional taxpayers earn income from sources other than remuneration.

According to SARS, some remuneration earners may qualify as provisional taxpayers, but only in specific circumstances, where an employer may not be registered for employees’ tax.

Broadly, provisional taxpayers are:

• Any natural person who derives income other than remuneration (freelancers, self-employed, etc)
• Any company
• Any person notified by the Commissioner that they are a provisional taxpayer
• Anyone earning remuneration from an employer not registered for PAYE

Typical taxpayers are taxed on their income, and then submit their tax return for the preceding year when tax season opens.

Provisional taxpayers pay their taxes in advance. This allows them to spread their tax liability over the year.

These taxpayers are required to pay two amounts in advance, based on estimated income. A third payment is optional before the end of the tax year.

The first of these payments is due on 31 August 2026. The second will be due 28 February 2027, and the optional final deadline is 30 September 2027—before next year’s tax window closes.

SARS warned provisional taxpayers to accurately estimate their taxable income based on expected profits, adding that understatement penalties await those who miss the mark.

Tax Deadlines

20% penalties – and more if you’re late

According to Morne Janse van Rensburg, Managing Director at Hobbs Sinclair Advisory, taxpayers must take heed of the warning and ensure their estimates are correct.

When submitting a provisional return, taxpayers may use either the SARS “basic amount”—based on the latest assessed income tax return—or a calculated estimate, prepared using current financial information and reasonable assumptions.

“SARS expects a defensible estimate,” he said. “If income has increased materially and that increase is not reflected, the taxpayer risks a penalty.”

SARS may request supporting calculations where it believes the estimate is not appropriate, he added.

After the annual return is assessed, SARS determines whether the second provisional estimate was reasonable. If provisional payments fall short, a 20% penalty may apply.

Where actual taxable income is R1 million or less, the total provisional payments must equal or exceed the tax payable on the smaller of the SARS basic amount or 90% of actual taxable income

Where taxable income is more than R1 million, the total provisional payments must equal or exceed the tax payable on 80% of the actual taxable income.

If these thresholds are not met, SARS levies a 20% penalty on the shortfall.

“SARS may waive the penalty if the estimate was properly calculated and not negligently or deliberately understated. This decision is subject to objection and appeal,” Janse van Rensburg said.

The advisor also warned taxpayers to heed the taxman’s deadline, with those still waiting to make the first payment cutting it really fine.

If the first provisional payment is not received by SARS by 31 August 2026, a late payment will incur penalties.

This includes a 10% penalty on the outstanding amount, plus interest at 10.5% per annum on the unpaid balance.

“The cost of missing the first provisional deadline can add up quickly,” says Janse van Rensburg.

“Taxpayers with fluctuating or additional income streams should review their position well before 31 August to ensure they are registered as provisional taxpayers, have estimated their taxable income correctly and submit their return on time.”